For new investors and, many holders of XRP, there has always been the confusion between Ripple and XRP. Even though Ripple and XRP have been around for many years now, there has always been a misconception on what XRP investors have put their money on and what these investors actually ownership. In this section, you will get to understand the difference between Ripple the company and XRP.
What is Ripple?
Ripple is a San Francisco based software company that provides better solutions for cross-border payments with the use of tools such as XRapid and RippleNet. These tools are being run on the blockchain technology of the XRP ledger.
Ripple is a highly centralized institution where the decisions are being made by the board, founders and employees. Some people argue that Ripple is not centralized but as per our first point above, you can see Ripple is a Centralized institution using decentralized tools to offer its solutions and Ripple is not XRP.
Also, Ripple is being used by financial institutions and can be owned by founders, investors, and employees who buy and own stock in the company. Some Ripple investors include Accenture, Santander, SBI Group, Standard Chartered, Google Ventures and a host of other big institutions.
What is XRP?
XRP is a cryptocurrency just like Bitcoin or Ethereum in that it is a digital asset that runs on the blockchain technology. It is currently the 3rd cryptocurrency in terms of market capitalization with 60 billion of XRP tokens believed to be owned by Ripple the company. However, about 55 billion of these tokens are said to be locked up in escrow.
Decisions on XRP are decentralized as XRP runs on the blockchain and its success or failure is determined by the community. XRP can also be used by anyone as a means of payment or transfer of monetary ownership. This, therefore, means XRP can be owned by anyone.
What is the Difference between Ripple and XRP?
Ripple is different from XRP as can be seen above. To further clarify in this, we will further explain the differences between Ripple’s XRP ownership and XRP token. We will dwell on some of the misconceptions that many (especially investors in XRP) have.
Firstly, we often hear that Ripple has signed new partnerships with Banks and other financial institutions. In fact, Ripple has partnered with more than 100 banks. To the surprise of many, this partnership is sole with Ripple the company and has no direct relationship with XRP.
Secondly, Ripple the software company is very successful revenue wise as oppose to XRP. Ripple the company has been making the news for its recent donation of $50M to universities via Ellen Wildlife. This donation can easily be made possible given the very huge success that Ripple is currently experiencing. XRP, on the other hand, has seen more than 80% wipe out from its ATH price.
Also, owners and investors in Ripple can make claim on owning XRP hence you sometimes hear people talk of Ripple XRP. In fact, Ripple holds a huge position of XRP as indicated above. However, holders of XRP cannot make claim on Ripple ownership. To own part of Ripple, XRP investors would need to buy and own Ripple stocks.
Miss conceptions on the XRP
Many think Ripple created XRP. This is however not the case as XRP was created by Jed McCaleb, Arthur Britto, and Chris Larsen. Ripple only owns XRP tokens like any other investor
The success or failure of Ripple has no direct effect on the success or failure of XRP and vice versa. This doesn’t mean Ripple the company doesn’t wish well for XRP as they own 60 billion tokens.
Therefore, if you invested in XRP thinking you invested in Ripple, hopefully, you now know what you put your money into. This is not to say the success of Ripple doesn’t have any effect on XRP. The fact that Ripple uses XRP as part of the solution it offers to banks, the success of Ripple can be seen to have an indirect relationship on the price of XRP.