What is XRP?
XRP is the native digital asset of the XRP Ledger (XRPL) — a decentralised blockchain optimised for fast, low-cost transfers of value. It settles transactions in 3 to 5 seconds, costs a fraction of a penny per transaction, and has been operating continuously since 2012. This guide explains what XRP actually is, how the ledger works, and what makes it different from Bitcoin, Ethereum and other large-cap digital assets.
The XRP Ledger in one paragraph
The XRP Ledger is a public, decentralised blockchain that uses a federated consensus protocol rather than proof-of-work or proof-of-stake. A network of independent validators — currently around 150, run by exchanges, universities, businesses and individuals — agrees on the order and outcome of transactions every few seconds. XRP is the token used to pay (very small) fees on the ledger and to act as a bridge currency between other assets traded on it. The ledger has handled over 2.7 billion transactions in its lifetime with zero downtime.
What XRP is used for
XRP has four practical uses. First, as a settlement asset for cross-border value transfer — the original motivation for the project. Second, as the unit used to pay fees on the XRPL (every transaction destroys a tiny amount of XRP, around 0.00001 XRP). Third, as a bridge currency between other assets on the ledger's built-in decentralised exchange — you can trade tokenised dollars, euros or other assets, and XRP often sits in the middle to provide liquidity. Fourth, since 2024, as a participant in automated market maker pools via the XLS-30 amendment.
Supply and distribution
XRP has a fixed maximum supply of 100 billion tokens. All 100 billion were created at the genesis of the ledger in 2012 — there is no mining and no ongoing issuance. Approximately 56 billion XRP is in circulation; the remainder is held in a cryptographically-enforced escrow by Ripple Labs, with up to 1 billion XRP released monthly. Most released XRP that Ripple does not sell or use is returned to escrow. The supply also slowly decreases over time because of the small amount of XRP burned with every transaction fee.
Who runs the network?
Validators are independent entities that run XRPL software. They are not paid by the protocol — they validate transactions because they have a business reason to ensure the ledger keeps running (exchanges need it for deposits and withdrawals; payment companies need it for settlement; researchers and individuals run validators for transparency and decentralisation). Anyone can run a validator. Trust between validators is established through a Unique Node List (UNL) maintained by the XRPL Foundation and major exchanges, which is similar to how the wider internet relies on a small set of root certificate authorities.
Ripple vs the XRP Ledger vs XRP — the three things commonly conflated
Ripple Labs is a privately-held company in San Francisco that builds enterprise software for cross-border payments. The XRP Ledger is an open, decentralised blockchain — Ripple contributes code to it but does not own or control it. XRP is the native token of the ledger. Ripple holds a large amount of XRP in escrow and uses XRP in some of its products, but the ledger and the token would continue to function if Ripple ceased to exist. Conflating these three is the single most common source of confusion in XRP discussions.
How XRP differs from Bitcoin and Ethereum
Bitcoin is designed as digital gold — a scarce store of value with a deliberately slow, high-fee settlement layer and a fixed monetary policy. Ethereum is designed as a programmable settlement layer for smart contracts, with a flexible fee market and a transition to proof-of-stake completed in 2022. XRP is designed for payments — fast, cheap and predictable, with consensus instead of mining or staking. The three solve different problems and a serious crypto holder will typically understand all three rather than picking sides.
Token economics in plain English
XRP has no protocol-level inflation — no new tokens are created. There is a small deflationary pressure from transaction fees being burned. Demand for XRP comes from three places: speculation, use as a bridge currency for cross-border transactions, and (increasingly) use in DeFi-style products on the XRPL. None of these demand sources is guaranteed to persist, and the relationship between protocol usage and token price is loose for any crypto asset, including XRP.
Where to learn more
If you've never bought any crypto before, start with our XRP for beginners guide. If you want to buy in the UK, the how to buy XRP in the UK walkthrough covers FCA-registered exchanges, KYC and self-custody. To understand why XRP exists, read XRP vs SWIFT. For supply and history, see the XRP history timeline.