XRP Ledger or simply XRP (formerly called Ripple) is a free software project and a payment protocol that pursues the development of a credit system based on the peer-to-peer paradigm. Each node of the network functions as a local exchange system, so that the entire system forms a decentralized mutual bank. Some consider that implemented to its last consequences this network would constitute a decentralized social network service based on honor and trust among its participants at a global level (in this way, its financial capital is based on social capital). A reduced version of the network would consist of an extension of the traditional banking system in which there are alternative payment routes that do not depend on central banks.
The XRP Ledger project (at that time known as "Ripple" 1 is launched by the Ripple Labs company, founded by Chris Larsen and Jed McCaleb in the United States in 2012. At that time the chips of the system were known as "wave credits" or "waves".
According to the XRP developer help portal, in May 2018 the community chose the name "XRP" for the cryptocurrency to differentiate it from the company that created it. On June 13, a new logo for the active product of two rounds of voting was announced. 1 On May 31, 2018, the news portal News.Bitcoin.com published an article describing the efforts of the XRP community for people to correctly differentiate between the "Ripple" brand and the cryptocurrency. On July 9, 2018 Ripple Labs published an infographic on its web portal clarifying the difference, characteristics and relationship between the company and the cryptocurrency.
Modern monetary systems are based on obligations between participants. Coins and notes are obligations issued by the government, while loans are personal obligations of the borrower and bank accounts are obligations of the bank, based on what is permitted by laws and government obligations. An obligation has value if the owner is confident that he can receive the value of it. Thus, we can see the banking network as a network based on trust.
The main method of making a payment to another participant in the system is by transferring ownership of the bank obligations electronically through the banking network, from the payer to the collector.
The banking network is a hierarchical network in which banks are mere intermediaries between their customers, and in turn, central banks serve as intermediaries between banks. This structure implies that it is very easy to establish a payment route between any participant, but it is full of points of failure, which could also be considered as single points of control.
The XRP system generates revenue primarily through its system, allowing banks to transact with each other without the need for central banks.