Your Questions About XRPL, Answered
Is XRPL a private blockchain, owned by Ripple?
No, the XRP Ledger is a decentralized, public blockchain. Any changes that would impact transaction processing or consensus need to be approved by at least 80%% of the network. Ripple is a contributor to the network, but its rights are the same as those of other contributors. In terms of validation, there are 150+ validators on the network with 35+ on the default Unique Node List (see “What are Unique Node Lists (UNLs)?” below) — Ripple runs 6 of these nodes.
Isn’t Proof of Work the best validation mechanism?
Proof of Work (PoW) was the first mechanism to solve the double spend problem without requiring a trusted 3rd party. The XRP Ledger’s consensus mechanism solves the same problem in a far faster, cheaper and more energy efficient way.
How can a blockchain be sustainable?
It’s been widely reported that Bitcoin’s energy consumption, as of 2021, is equivalent to that used by Argentina, with much of the electricity Bitcoin miners use coming from polluting sources. The XRP Ledger confirms transactions through a “consensus” mechanism - which does not waste energy like proof of work does - and leverages carbon offsets to be one of the first truly carbon neutral blockchains . Explore the energy consumption of XRP compared to cash, credit cards and other popular cryptocurrencies with the Green Currency Calculator.
Can currencies other than XRP be traded through XRPL?
Yes, the XRP Ledger was built specifically to be able to tokenize arbitrary assets, such as USD, EUR, Oil, Gold, reward points, and more. Any currency can be issued on the XRP Ledger. This is illustrated by XRPL’s growing community that backs a variety of fiat and crypto tokens.
Isn’t XRPL only for payments?
Although XRPL was initially developed for payment use cases, both the ledger and its native digital asset XRP are increasingly popular for a range of innovative blockchain use cases. New standards proposals for issuing NFTs, XRPL Labs’ hooks amendment for smart contract functionality, and federated sidechains are all currently works in progress.
Validators and Unique Node Lists
What service do transaction validators provide?
All nodes ensure that transactions meet protocol requirements, and are therefore “valid.” The service that validators uniquely provide is administratively grouping transactions into ordered units, agreeing on one such ordering specifically to prevent double spending.
How much does it cost to run a validator?
Running a validator does not require any fees or XRP. It is comparable in cost to running an email server in terms of its electricity use.
What are Unique Node Lists (UNLs)?
UNLs are the lists of validators a given participant believes will not conspire to defraud them. Each server operator can choose their own UNL, usually based on a default set provided by a trusted publisher. (A default set from a publisher is sometimes called a default UNL, or dUNL.)
Which UNL should I select?
Since anybody can run a validator, the burden is on the network participants to choose a reliable set. Currently, three publishers (Ripple, the XRP Ledger Foundation, and Coil) are known to publish recommended default lists of high quality validators, based on past performance, proven identities, and responsible IT policies. However, every network participant can choose which validators it chooses as reliable and need not follow one of the three publishers noted above.
If Ripple recommends adoption of its UNL, doesn't that create a centralized system?
No. The XRP Ledger network is opt-in. Each participant directly or indirectly chooses its UNL. If Ripple stops operating or acts maliciously, participants can change their UNLs to use a list from a different publisher.
What is the incentive structure for validators?
The primary incentive to run a validator is to preserve and protect the stable operation and sensible evolution of the network. It is the validators who decide the evolution of the XRP Ledger, so any business that uses or depends on the XRP Ledger has an inherent incentive to ensure the reliability, and stability of the network. Validators also earn the respect and goodwill of the community by contributing this way.
If you run an XRP Ledger server to participate in the network, the additional cost and effort to run a validator is minimal. This means that additional incentives, such as the mining rewards in Bitcoin, are not necessary. Ripple avoids paying XRP as a reward for operating a validator so that such incentives do not warp the behavior of validators.
For examples of how incentives can warp validation behavior, read about miner extractable value (MEV) .
Can financial institutions set up transaction validators to help them meet specific institutional standards and requirements?
No, institutions cannot set up customized validator policies for choosing to allow some transactions and reject others. Validators either follow the protocol, or they do not. If software does not follow protocol rules, it does not function. Thus, it is not recommended that institutions seek out custom implementations without in-house expertise.
What happens if more than 20% of nodes within the network do not agree with the majority? How is the final version of the ledger chosen?
Normally, if there is a dispute about the validity of one transaction, that transaction gets pushed back until the majority can come to an agreement. But if more than 20% of the network did not follow the same protocol rules as the majority, the network would temporarily halt. It could resume when participants reconfigure their UNLs based on those who want to reach consensus with each other. This temporary processing delay is desired rather than double spending.
In the process of determining the authoritative version of a ledger, there may be multiple temporary internal versions. Such internal versions naturally happen in distributed systems because not all nodes receive transactions in the same order. The analogous behavior in Bitcoin is where two servers each see a different longest chain because two blocks were mined at about the same time.
However, there can be only one latest validated ledger version at any given time; other versions are irrelevant and harmless.
For more information about how the XRP Ledger's consensus mechanism behaves in adverse situations, see Consensus Protections Against Attacks and Failure Modes.
Does the XRP Ledger have a formal process for adding validators?
No, a formal process for adding validators is not compatible with the XRP Ledger, because it is a system with no central authority.
Publishers of individual default UNLs set their own policies for when to add or remove validators from their lists of recommendations.
For recommendations and best practices, see Run
rippled as a Validator.
Role of XRP
What purpose does XRP serve?
XRP was created as the XRP Ledger's native asset to empower a new generation of digital payments—faster, greener, and cheaper than any previous digital asset. It also serves to protect the ledger from spam, and to bridge currencies in the XRP Ledger's decentralized exchange, when doing so is beneficial to users. Over time, the XRP Ledger community has pioneered new use cases for XRP as well was the XRP Ledger itself.
How does the XRP Ledger respond to transaction floods?
The XRP Ledger is designed to set the transaction cost dynamically based on demand as an anti-spam measure. The impact of any potential XRP manipulation is minimized by increases in network size as the market cap and transaction volume increase.
What about money laundering and suspicious economic activity?
The XRP Ledger network is an open network, and all transactions are publicly visible.
Ripple is committed to monitoring and reporting any AML flags across the XRP Ledger network, as well as reporting suspicious activity to FinCEN as applicable.
XRP Forensics / xrplorer maintains an advisory list to track and minimize money laundering, scams, fraud, and illicit use of the XRP Ledger. Exchanges and other service providers can use this service to prevent and react to financial crimes.
What is the process for reviewing third-party code contributions?
The code contribution process starts with a developer opening a pull request to a source code repository such as the
rippled repository , which contains Ripple's reference implementation of the core XRP Ledger server and protocol.
This pull request triggers automated unit and integration tests, as well as code reviews by several developers who, typically, have significant expertise in the area of code that the pull request affects.
Once the pull request passes automated tests and receives approvals from reviewers, a trusted maintainer of the repo can stage it for inclusion in the next beta.
Does Ripple own or control the XRP Ledger or XRP Ledger network?
No, Ripple does not own or control the XRP Ledger or XRP Ledger network.
Ripple does publish a reference implementation of the core XRP Ledger server (
rippled ) and employs a team of engineers who contribute to the open-source codebase. Ripple also periodically publishes pre-compiled binary packages of the software as a convenience. Anyone is free to download and compile the software from source, if they prefer.
You don't need to use Ripple’s version of the XRP Ledger software to interact with the XRP Ledger.
rippled is open-source software and Ripple grants anyone the ability to use, extend, and modify it as long as they follow the terms of the ISC license . The ISC License is very permissive compared to some other open-source licenses that strictly limit how you can extend and adapt the software.
Ripple is also one of several entities who publish recommended UNL settings and runs validators on the network. As of mid-2021, Ripple runs 6 of the 35+ validators in the default UNL.
Does Ripple offer a secure method to download their software?
rippled source code is available at https://github.com/ripple/rippled , where the tip of the
develop branches always contains a version-setting commit signed by a
rippled developer. Ripple also publishes pre-built binary packages for CentOS, RedHat Enterprise Linux, Fedora, Ubuntu, and Debian Linux. Those packages are digitally signed so that they are tamper-evident and their authenticity can be verified. Lastly, release bulletins are made available over a secure website, and include the commit ID of the repository, as well as the cryptographic hash values of the packages that are published.