I’ve been trading crypto for a while and have seen many hype cycles come and go. Some coins skyrocket on rumors, while others disappear once the truth is revealed. One common misunderstanding I often see, especially in forums and beginner groups, is thinking XRP and Ripple are the same thing.
People talk about the two as if they’re identical, but they’re not. Mixing them up can cost you money if you’re trading or investing. In this post, I want to explain the difference simply and clearly, just like I wish someone had done for me years ago.
Let’s start with the basics.
Ripple Is a Company. XRP Is a Cryptocurrency. Simple as That
Ripple, also known as Ripple Labs, is a private financial technology company that started in 2012. It aims to make international money transfers faster, cheaper, and more efficient than the old systems, which can take days and cost a lot.
Ripple created XRP, a digital currency that was around before the company itself. It was developed by engineers Jed McCaleb, David Schwartz, and Arthur Britto, and later Chris Larsen joined them. Together, they came up with a plan to enable real-time global payments.
Many people think Ripple controls XRP, but that’s not entirely true. Ripple owns a lot of XRP, but the digital currency and the company are separate entities.
XRP vs Ripple – Tabular Comparison
Ripple is a company that makes payment tech, while XRP is a digital currency on the XRP Ledger. Ripple can succeed without XRP, and XRP can exist without Ripple.
| Category | XRP | Ripple (Ripple Labs) |
| What It Is | A cryptocurrency and digital asset | A private fintech and software company |
| Launch Year | 2012 (XRP Ledger created first) | 2012 (as Opencoin, later renamed) |
| Main Purpose | Fast, low-cost global payments and liquidity | Build payment solutions for banks and institutions |
| Technology | Runs on the decentralized XRP Ledger (XRPL) | Builds software like RippleNet, xCurrent, ODL |
| Control | No single owner; open-source ledger | Controlled and managed by Ripple Labs |
| Supply | Fixed 100 billion, pre-mined | No native token supply; only uses software |
| Use by Banks | Used only in ODL for liquidity | Used widely for messaging and settlement tools |
| Energy Use | Very low; no mining needed | Not a blockchain software infrastructure only |
| Transaction Speed | 3–5 seconds | Depends on the product used by banks |
| Dependence | Can operate without Ripple | Ripple can operate without XRP |
| Investment Type | Tradable cryptocurrency | Private company |
|| Also Read: Quantfury vs Binance – Honest Comparison From Real Trader
Why Ripple Matters in the XRP vs Ripple Conversation
Ripple creates software that helps banks and payment companies transfer money quickly and efficiently. They have several products, including RippleNet, xCurrent, xRapid (which is now called ODL—On-Demand Liquidity), xVia, and Ripple Connect, all using the Interledger Protocol (ILP). RippleNet connects banks worldwide and allows payments to settle in seconds, instead of days.
Many people think all Ripple products require XRP, the cryptocurrency. But that’s not true. Most banks use Ripple’s software without touching XRP at all. They just send data, messages, and confirmations.
Only the xRapid/ODL product uses XRP directly to provide liquidity.
This causes confusion among investors. They assume RippleNet always drives demand for XRP, but it doesn’t. XRP demand only increases if banks choose to use the ODL option.
However, Ripple Connect and ILP make it easy to use XRP as a settlement currency. Ripple hopes that in the future, XRP will become the main currency for settling global payments.
XRP: Fast, Cheap, and Built for Moving Money
Compared to Bitcoin, XRP is quite different. XRP wasn’t mined; all 100 billion coins were created at the beginning. It doesn’t need mining because it uses a special way of reaching agreements called a consensus algorithm, which is more energy-efficient, faster, and predictable.
Key points:
- Transactions are done in 3 to 5 seconds.
- Fees are less than a cent.
- The system can handle about 1,500 transactions every second.
- A tiny bit of XRP gets destroyed with each transaction, which could slightly reduce the total supply over time.
- To activate a wallet, you need about 20 XRP, which stays locked.
- When you send XRP, it takes about 3.5 seconds for the transaction to be confirmed.
Trusted validators, like universities and institutions, agree on the new transaction record with roughly 80% agreement.
In my experience trading, I’ve rarely seen a network work as smoothly as the XRP Ledger.
How XRP Works for Banks and Cross-Border Payments
Ripple realized early on that transferring money across borders can be complicated and slow. Banks usually keep extra money in foreign accounts so they can send funds quickly, but this ties up a lot of money that could be used elsewhere.
XRP offers a solution by acting as a bridge currency. Here’s how it works:
A bank converts US dollars into XRP.
XRP moves quickly across the network.
Then, it converts back into the local currency, such as Japanese Yen or Mexican Peso.
This process doesn’t require banks to keep extra money in foreign accounts, making transfers faster, cheaper, and safer. It also reduces risks and improves liquidity.
Some people wonder why more banks don’t use XRP. The reason is that banks tend to be cautious. They worry about changes in prices, rules, and compliance. Many prefer to use Ripple’s other tools without XRP because they feel safer.
But as rules become clearer and prices become more stable, more banks might start using XRP’s services.
Ripple’s Influence: Big Partners, Big Markets
Ripple has been expanding its technology to more than 70 countries worldwide. It has worked with various groups, including banks, money transfer companies, large multinational companies, and central banks, testing digital currencies called CBDCs. It has also collaborated with international organizations like the IMF and BIS.
Ripple isn’t just making software; it aims to build a system where money can move as easily as information, calling it the ‘internet of value.’ The company even applied for a license to operate as a bank in the U.S., which would allow it to hold digital assets and connect with systems like FedNow. This is a big step for any cryptocurrency company.
Additionally, Ripple owns a large amount of XRP, over 60 billion at one point. Most of these tokens are kept in escrow and released gradually to prevent flooding the market. Ripple’s value increases when XRP’s price goes up, so the company has a strong reason to keep the asset’s price stable.
Market Reality: Why XRP Still Matters
Right now, XRP is trading between $2.50 and $3, which is more than 47,000% higher than in its early days. Despite many debates and legal issues, it has stayed strong.
There are about 55 billion XRP coins in circulation.
XRP was created to help with fast and cheap payments, and traders still hope its value will rise. Some talk about very high numbers like $1,000, while others estimate it could be worth $9 to $1,8 depending on demand.
As a trader, I don’t rely on wild guesses. I think that if global payment systems improve and banks start using XRP for liquidity, its demand could increase a lot. XRP is helpful in ways many other assets aren’t.
You might not like the idea of a big company being linked to a cryptocurrency, but Ripple’s partnerships give XRP real-world use and exposure that Bitcoin and Ethereum don’t have to the same extent.
The Long-Term Ripple Vision
Ripple isn’t just about sending money quickly. They are working on many other things, including transferring money across borders, building digital money systems for governments, safeguarding digital assets for institutions, linking different financial systems so they can work together, finding ways to improve liquidity in emerging markets, and integrating crypto technology for businesses.
Their goal is to create a simple, global financial system that anyone can use and customize. If they succeed, XRP could become a smooth, reliable way to settle transactions within that system.
I’ve followed Ripple’s plans for over ten years. Whether you like them or not, it’s clear they are thinking long term. They focus on working with big institutions, following rules, and staying compliant, things many crypto companies overlook.
That’s why I believe XRP isn’t going away anytime soon. It could stay important for many decades, maybe even longer.
Why XRP vs Ripple Still Confuses People
Most of the confusion comes from branding. Ripple used to promote XRP more directly, even calling it “Ripple” on older websites. That stuck in people’s minds.
Another reason is that banks using RippleNet are using crypto. But most of them aren’t. They’re just using Ripple’s messaging system, not XRP.
Plus, Ripple, as a big company with news releases and partnerships, is easier for people to understand. XRP, however, is a decentralized digital asset tied to a separate open-source ledger, which can be complicated.
Once you understand the difference, everything makes more sense.
Final Thoughts: The Real XRP vs Ripple Answer
In short, Ripple develops the technology while XRP is part of that technology. When you buy XRP, you’re investing in the network, not the company Ripple.
Ripple works to get more people to use it, forms partnerships, and influences the rules on how it operates. XRP helps make transactions fast and easy. They’re connected but operate independently.
If you’re thinking of buying XRP, do so because you believe in a future where money can be transferred instantly worldwide, not because someone promises big profits.
That’s the future Ripple is working to create, and XRP could be the asset that helps make it happen.
Frequently Asked Questions
Q1. Can Ripple run without XRP?
Yes, Ripple can operate without XRP. Most of Ripple’s products, such as RippleNet, xCurrent, and ILP, do not need XRP. Only ODL (formerly xRapid) uses XRP for liquidity. Ripple’s business does not rely on XRP.
Q2. Why is Ripple called XRP?
People often confuse Ripple with XRP because in the beginning, their names were mixed up, and some exchanges listed the coin as “Ripple.” But actually, Ripple is the name of the company, while XRP is the digital currency that existed before the company was created. They are related, but they are two different things.
Q3. Is Ripple XRP a good investment?
XRP can be a good investment for some traders because it allows quick and cheap transactions and has strong backing from big institutions. However, it also carries risks, including unclear regulations, competition from central bank-issued digital currencies, and slow adoption by banks. Its value depends on its use in real-world payments.
Q4. Are banks using XRP or Ripple?
Most banks use Ripple’s software to send messages and settle payments quickly without using XRP tokens. Only a few institutions use XRP through ODL for liquidity. While some big banks are starting to adopt XRP, their use is still limited but gradually increasing.
