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October 4, 2022
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– Bitcoin, cryptocurrencies and blockchain technology.

This time we will look at the history of one of the most popular cryptocurrency items on the market – Ripple. We will present events that took place between partners and all companies involved in the development of this project. XRP as an asset concentrated around a centralized network management model is not as technologically phenomenal as Bitcoin or Ethereum. The project still attracts millions to itself. Let’s see how it happened.

The story of Ripple

The current ATH Ripple is $ 3.31 and was established on January 4, 2018. Since the beginning of 2017, XRP has gained a whopping 51,709% in value, thus establishing its capitalization at $ 331 billion. In this way, it stood on a par with such giants as Facebook, Apple, Google and Alibaba. Forbes reports that Chris Larsen (Ripple’s board member) fortune is worth around 5.19 billion XRP. That’s about $ 50 billion at that point. Larsen was then one of the richest people in the world. Despite such a spectacular success, it seems that few people are aware of what is really behind this project. Let’s take a look at the next chapters in the history of XRP – the coin that dominated the cryptocurrency market.

Ripple Pay: 2004 to 2012

In 2004, Ryan Fugger founded a company he called RipplePay. The idea behind the project was to create a peer-to-peer network to support financial services without the intermediation of banks. The basic assumptions of Ripple’s theory can be summarized in several points:

All banks do is take and make loans. Customer deposits are actually loans to the bank.
A payment from person A to B in the traditional banking system is actually a change in the value of the loans A and B have made to their banks.
RipplePay was supposed to replace the bank by creating a p2p network based on trust. In this network, participants could borrow with each other directly, and changes in the value of these loans enable payments to be made among themselves.

Early Ripple logo

The architecture of the Ripple network is similar to how the Lightning Network works. The difference lies in the possible counterparty risk that LN in its system avoids. In this case, it would be hard to talk about real trust on the web. If the functioning of the payment system depends on one of the counterparties, then it does not differ much from the current financial system. The current Ripple, however, differs from the original vision.

In early 2011, Bitcoin began to gain popularity and slowly take over the interest of the Ripple group. In a way, BTC managed to deliver on its promises, but with the short Ripple it failed. Satoshi Nakamoto’s creation created a p2p payment network that was superior to Ripple in many ways. In May 2011, Jed McCaleb, a pioneer of the early Bitcoin, joined Ripple – most likely to address the challenges facing the project. McCaleb founded the famous Mt.Gox in 2010, which he sold to Mark Karpeles in 2011. From the analysis of the subsequent collapse of the stock exchange, we know that Mt.Gox was most likely insolvent at the level of 80,000 BTC when the platform was sold to Karpeles. Shortly thereafter, Ryan Fugger handed over the reins to Ripple McCaleb.

The video below explains the technological assumptions behind Ripple from the time of McCaleb’s joining.

OpenCoin: 2012 to 2014

The story of Ripple is a story divided into several chapters. The second stage that we will go through is the story of OpenCoin. In 2012, McCaleb hired Chris Larsen, who continues to hold management positions today. The modern Ripple website calls him one of the founders of the project. This is when the OpenCoin era began. The first change of the name of the project between 2012 and 2015. Larsen is the former CEO of E-Loan, a company he co-founded in 1996 and went public in 1999. in the measures of a technological bubble. The E-Loan was sold in 2005.

To address Bitcoin’s success, Ripple planned to allow BTC payments through its network – potentially, BTC was going to even become the network’s primary currency. The Ripple Gateway structure was also established during this period. The community noticed that the p2p framework was not doing the job. A large proportion of users did not want to use intermediaries to make payments. This is why Ripple decided to use the gateway mechanism – large businesses that could be trusted by hundreds of users. The structure was to function as a compromise between a centralized banking structure and a p2p network.

The history of ripple

In late 2012, OpenCoin opposed the use of the Ripple Card name by Ripple Communications, a telecommunications company seeking to launch a new payment product. This is a symbolic first time that the management of OpenCoin has decided to protect the Ripple brand in a more resolute way through the legal process.

In October 2012, Jesse Powell, the founder and CEO of the Kraken stock exchange and a close friend of McCaleb, participated in the first round of Ripple seed funding with an investment of around $ 200,000. Roger Ver.

Start of XRP – January 2013

Ripple launched its XRP coin in January 2013. Like Bitcoin, XRP relies on a public chain of cryptographic signatures. As a result, Ripple does not need a trust network or the aforementioned gates. XRP can be sent directly between users without any risks associated with intermediaries. Previously, this challenge involved transferring all currencies to Ripple, including USD.

In April 2013, OpenCoin received $ 1.5 million in funding from Google Ventues, Andreessen Horowitz, IDG Capital Partners, FF Angel, Lightspeed Venture Partners, Bitcoin Opportunity Funf, and VAst Ventures. It was the first of many rounds of venture investments in which some of the most recognizable VC companies in the world took part.

Somewhere between 2013 and 2014, McCaleb said goodbye to the project. The departure was deeply discussed in May 2014 by the project community. McCaleb, however, did not become involved in the project in June 2013, when Stefan Thomas replaced him as CTO.

McCaleb most likely disagreed with Larsen on the strategy. Therefore, he was forced to leave the project due to the support Larsen received from supporting venture funds. After leaving Ripple, McCaleb was one of the founders of Stellar in 2014. This famous design also builds on some idelogic Ripple foundations.

Ripple Story – End of Part One

Ripple’s history is a bumpy road where the project met many interesting people from the world of cryptocurrencies. It’s also a lot of modifications to what Ripple is really meant to be. In the second part, we’ll look at the period 2013-2015 when OpenCoin was renamed Ripple Labs. We will review the contemporary history of a project that has been engulfed in great controversy in recent weeks, in which the SEC is involved. Nevertheless, Ripple is still a huge cryptocurrency machine and an extremely interesting story worth telling.

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