The XRP Ledger supports XRP payments without mining or energy-heavy transaction processing. The public blockchain confirms transfers within three to five seconds and charges a small fee. Its design also includes account reserves, destination tags, a built-in exchange and a voting system for network upgrades.
The XRP Ledger, or XRPL, serves as the blockchain where XRP transactions take place. XRP acts as the network’s native cryptocurrency. Users pay transaction fees in XRP, while the ledger records account balances, payments and other activity.
Ripple operates as a private financial technology company. It develops payment products and owns a large amount of XRP, but it does not own the ledger. Independent developers maintain the open-source software, while universities, exchanges and other organizations operate servers.
David Schwartz, Jed McCaleb and Arthur Britto began developing the network in 2011. They wanted to create a payment system that did not rely on mining. The XRP Ledger launched in June 2012 with a fixed supply of 100 billion XRP.
The founders later gave 80 billion XRP to the company that became Ripple. Ripple placed much of its supply in escrow accounts which release XRP according to a fixed schedule. However, critics continue to question the concentration of tokens under one company.
The XRP Ledger uses the XRP Ledger Consensus Protocol instead of proof-of-work mining. Validators review proposed transactions and vote on the next ledger version. Each validation round normally takes between three and five seconds.
A transaction becomes final after validators approve the updated ledger. Therefore, users do not need to wait for several block confirmations. The network favors safety and can stop processing transactions when validators cannot reach the required agreement.
Each server follows a Unique Node List, commonly called a UNL. This list identifies the validators that a server trusts when checking transaction proposals. Operators can create their own lists, although many use a recommended default list.
The system continues to operate when fewer than 20% of trusted validators act incorrectly. If the share rises above that level, the network may stop reaching consensus. More than 80% would need to coordinate to approve an invalid transaction.
The XRP Ledger requires each active account to hold a base reserve. The cited network figures place the reserve at 1 XRP, with an additional 0.2 XRP required for certain ledger objects. These objects can include trust lines and open trading offers.
This rule limits the creation of unused accounts and reduces unnecessary ledger data. Users cannot spend the reserved amount while the account remains active. As a result, anyone moving XRP into self-custody should include the reserve in the planned balance.
Destination tags also play an important role when sending XRP to an exchange. Many exchanges use one XRP address for several customers. The destination tag tells the exchange which customer should receive the deposit.
A missing or incorrect tag may prevent the exchange from crediting the payment automatically. The XRP may remain under the exchange’s control until its support team identifies the sender. Users should check both the address and tag before approving a transfer.
A standard XRP Ledger transaction carries a minimum fee of 0.00001 XRP, although the charge can rise during heavy network activity. The network destroys the fee instead of paying it to validators. This process discourages spam and gradually reduces the total XRP supply.
The ledger also includes a decentralized exchange. Users can trade XRP and issued tokens through offers recorded directly on the network. However, non-XRP tokens require trust lines because another party issues and backs them.
Users who keep XRP on an exchange do not control the private keys. Self-custody gives them direct control but it also makes them responsible for protecting the recovery seed. A personal XRP wallet normally does not require a destination tag.
In Germany, selling XRP within one year of purchase may create a taxable private disposal gain. Crypto-to-crypto swaps can also count as sales. Investors should retain complete transaction records and seek qualified tax advice because individual circumstances and future legal changes can affect the final treatment.
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