Ripple Investment Guide

Version 1.4
by Andrew White
Welcome to the Ripple Investment Guide. This ebook is designed as
an overview of the ways investors can participate in the Ripple
ecosystem. This book is only for educational purposes, and is not
intended to provide investment advice. Before investing, I encourage
my readers to discuss with their financial advisor any potential risks
and rewards of an investment.
My goal for this book is to be largely non-technical and, as the author,
I feel a certain responsibility to make sure everyone who reads this
book learns something of value. If there is a passage in this guide that
does not seem to make sense or is too complicated, my apologies and
a request: please do not give up learning more about Ripple and the
opportunities it presents to investors. Take your time with each section
and supplement your learning with Google to help with your own
research on terms or ideas of interest to you. Don’t be surprised if
after reading this guide you become the “go to” expert about Ripple in
your social network.
The Ripple payment system is one of the most exciting technologies
to be developed in recent years. For the first time, payments can be
sent to anyone in the world in any currency within a few seconds. I
describe Ripple as “like email for money.” Activities that were once the
sole purview of the banking industry, such as lending or making
payments, have become democratized in the Ripple system. The
myriad opportunities and challenges these new options bring to the
masses open a whole new set of possibilities and questions for the
discerning investor to consider. This ebook presents a brief overview
of business opportunities in the RIpple ecosystem and what roles you
can play in this exciting new area of finance. I want to cover all the
major components of Ripple as it exists today and dive deeper into
each topic as space allows. With any new technology there are
tradeoffs between sophistication and ease of use, new features and
complications, new capabilities and new risks, and Ripple is no
different. In this ebook’s dozen pages, my intent is make you
conversant in the main areas of Ripple and invite you to specialize in
your own area of research.
Table of Contents
Ripple Labs
Currency IOUs
Market Makers Enterprises
Due Diligence Questions In the Future
About the Author
Ripple Labs
Ripple is spearheaded by the company named Ripple Labs, Inc. in
San Francisco. Formed in 2013 by Jed McCaleb, Chris Larsen, and a
few others, Ripple Labs owns the intellectual property of the Ripple
protocol. The code and programs that make up Ripple are available
for free for anyone to download, use and modify. Ripple Labs is
supported by a community of Ripple enthusiasts around the world who
are passionate about making the technology more useful. These
people provide essential feedback to product teams, engineers,
techies, and C-level executives leading the overall implementation of
Ripple’s development. The known investors in Ripple Labs include
Google Ventures, Andresson and Horowitz, Lightspeed Ventures,
Bryan Bradford, and others. As of March 2014, Ripple Labs has a staff
of 40 people led by CEO Chris Larsen. Mr. Larsen is the former CEO
of ELoan and later, both of which were pioneering
companies in peer to peer lending.
As an outsider, I can’t say anything definitive about Ripple Labs’
business strategies. But their plan appears committed to increasing
the value of the Ripple network. They do this through a variety of
strategies to show the public and world of business that Ripple
provides a better system for payments, better than the alternatives.
One of the ways of accomplishing this is by making useful software
and giving it away for free. The source code of the software from
Ripple Labs can be read and used by programmers at no charge,
which is an open invitation for curious engineers and programmers to
make contributions to the code and expedite the development of the
core functionality. This also provides a valuable safety mechanism.
Since more eyes can look at the underlying code, potential issues can
be identified and fixed early, before becoming a serious issue. Ripple
Labs can give away the software for free because the core value
proposition of Ripple is that an open payment network that anyone
can use and improve is more valuable than a closed alternative. So far
the plan seems to be working well and Ripple is starting to make big
To use a digital currency system, people start by creating a digital
version of a wallet. A Ripple wallet is identified by its Ripple address
that begins with the lower case ‘r’ and looks like this:
r3CxMDQFX1Atq1vQN5sqVsjm3rawGSwd32 (note: donations to the
author are welcome!).
The wallet is always available on a web page with the main
functionality displayed: wallet transaction history, an address book, a
section to send and receive payments, and a section of the wallet for
you to make currency trades. It is important to note that Ripple wallets
are not insured by the Federal Deposit Insurance Corporation (FDIC),
which was created by the U.S. government to protect consumers from
bank failures.
For most consumers, the “magic” of Ripple payments happens when
payments are sent across the network within a few seconds. To
anyone accustomed to the slow and cumbersome process of
traditional payment networks, this is an incredible advance in
payments technology. No longer do people need to wait for days for a
bank wire transfer to be completed, or weeks for a credit card
payment to be processed; with Ripple, having to wait for payment
processing is a thing of the past. Even in areas with modern banking
systems (like Europe and China) with same day bank transfers, the
existing payment system is still a relatively slow and costly process
that creates an unnecessary drag on the economy. Just imagine what
kind of lowcost new services will become available with Ripple to
merchants, consumers, and investors across the entire global
As far as most investors are concerned, the Ripple wallet is also
where “magic” happens in its role in redefining the payment
experience around the world. To be honest, in my opinion, wallets are
not all that interesting visually, or conceptually, nor should they be
particularly interesting. They are designed to be as simple as possible
hence there isn’t much to see or do in a Ripple wallet (with the
exception of trading).
Advanced concept warning! I like to describe Ripple wallets using the
following example but it is not a precise analogy. I just mentioned that
Ripple wallets are not FDIC insured because they are not issued by a
U.S. chartered bank. Allow me artistic license with the following
analogy: a Ripple wallet is kind of like a bank account but you as the
wallet owner (account owner) are empowered to control how much
money you trust to be held by your various bank like entities
(gateways, more about them later).
Ripple Wallets are great because when they can store or make
payments in any currency. The author can’t think of any other wallet
ever created that is able to accept any currency ever created,
including government issued currencies and private currencies! For
the first time in history, digital wallet users can hold any currency ever
issued. This is a Big Idea that may take years to be widely
understood, appreciated, and accepted by the market.
Ripples are the native currency of the Ripple protocol. The protocol
consists of the rules of how Ripple works and these rules are
translated by professional programmers into software to perform all
the functions that Ripple delivers. More generally, people make
protocols to solve a problem in a consistent and entirely reliable
manner. Well designed protocols tend to have many people using
them and the best protocols have a long service life. For example,
think of the protocol of shaking hands when greeting someone. This
protocol has become instantly recognizable worldwide. It’s notable
traits are that it is simple, easily reproducible, and cooperative in
nature. The best computer protocols and monetary systems aim for
similar results.
To be compliant with international naming conventions, Ripples are
known by a three letter acronym, comparable to how US dollars are
represented as USD. The three letter code is XRP. Ripple was
released with only 100 billion units of XRP to ever exist. The logic is
that average consumers might only need to use a relatively few
Ripples across their entire lifetime. The 100 billion number was judged
to be large enough to be useful for the Ripple network for hundreds of
years, and quantifiable enough to provide a business model for Ripple
Ripples are distributed in a variety of ways. Ripple Labs sells bulk
quantities for large orders and gives away smaller amounts for free. It
is critical to the Ripple Labs business strategy that XRP be distributed
to a wide number of market participants who intend to use Ripple as a
system for payments, currency trading, or asset issuance. A cool
feature of XRP is that as the native currency (I also like the term “meta
currency” but it is not as obvious what that means), XRP can be spent
to send (or receive) any other currency offered for sale inside the
Ripple network.
There are different investment strategies involving Ripples. Before
getting into the various choices available, I would suggest would be
investors ask themselves a few questions such as: “am I technically
proficient enough to handle digital currencies?” “Do I always follow
best practices for computer security?” “Should I rely on a reputable
consultant, broker, or hedge fund to manage my investment?” “Am I
well versed in the nature of online scams, wallet security issues, and
legal issues before buying?” “Should I use XRP as a hedge against
my other investments?” Your answers to these basic questions should
help point you in the direction that’s right for you. It doesn’t help to be
less than entirely honest with yourself, so be candid and assess your
strengths and weaknesses before making any investment.
Investors must be aware that there are inherent risks associated with
digital assets. Thefts and scams are an unfortunate but inevitable
aspect of online offerings and the investor must always perform due
diligence before trusting others with their money. Even if an
investment is not fraudulent, there is no guarantee that the value of
the investment will yield profits. You are completely on your own on
this one. Please do not ask Ripple Labs for support or answers to
these issues. Ripple Labs cannot and will not comment on the
investment fitness of Ripple, XRP, or the value and safety of claims
made by non-Ripple Labs staff. Due diligence is the process of
investigating a proposed investment, and the responsibility for due
diligence is entirely up to you. Be appropriately skeptical and cautious
in all your dealings.
Ripple was released to the public around the beginning of 2013. At
first they were worth nothing at market rates, but XRP has steadily
increased in value through a steadily increasing number of services
built for it.
Gateways are service providers that let Ripple users deposit, transfer,
and withdraw money by means of their gateway accounts, including
transfers between a consumer’s wallet and the consumer’s gateway
account. To attract and retain users of their service, gateways have
every incentive to innovate and offer beneficial services. As gateways
compete for market share, I fully expect that more gateways will be
launched that they will increasingly offer innovative rewards programs
like airline miles, coupons, and premium service discounts.
There are a number of services available to people who want to create
and operate a gateway. If they have a strong technical background,
they can usually set one up themselves. If they don’t have the
technical skills, they can use a hosted wallet (more on that in a
moment). If they are serious about getting into the gateway business,
they can pay a qualified consultant to make a custom service for them;
for example, Ripple Labs offers a gateway customization service to
enterprises. In the future, cloud-based options will be available such
as OMG’s One Million Gateways hosted service.
Because of Ripple’s design, anyone with a Ripple wallet can
technically become a gateway. However, that is neither likely or
necessary in almost all consumer or investor cases. A Ripple Wallet
can become a gateway when people add “trust” to a wallet you
control. “Trust” in the context of Ripple means “how much of my
money do I trust this gateway to hold?” Long established gateways
with a good reputation for customer service tend to be more trusted by
users than new gateways that are less known and have a limited
history of operation.
Gateways as a business have a few different business models
available to guide them. One example is a gateway primarily used for
money transmission, another example is remittance. As a gateway
operator, you might be interested in enabling people to send payments
to another country. A consumer opens an account on your gateway
and sends you money to go in that account. The gateway operator
issues IOUs (more about those in the next section) to the account
holder and those IOUs appear in the holder’s Ripple wallet. The
account holder can than trade these IOUs for another currency. In the
other country, a person can withdraw these IOUs from the gateway
and receive the real currency. The gateway makes money by charging
a transaction fee. If the original gateway’s website or service becomes
unavailable, the IOUs do not disappear from Ripple wallets. In the
event of bankruptcy or other serious disruption, the IOUs may lose
some of their market value for the IOUs of currency they represent,
but they could be redeemed when the gateway business returns. The
unique circumstances of the gateways issue will decide what recourse
is available to the IOU holders.
The charts on contain the major currency markets
on RIpple. These are typically written in the form of “Bitstamp USD/
XRP” to indicate that these IOU’s are issued by the Bitstamp gateway
in the USD currency and is trading against XRP. Another example is
the Chinese gateway RippleCN. Their IOUs for the Chinese Yuan look
like this: RippleCN CNY/XRP. Back over at Bitstamp, you will see that
Bitstamp USD is also able to be traded for Bitstamp BTC. Gateways
can set rules on the fees of trades or policies as to what is allowed to
be traded but in general all the IOU’s will be tradable for all the
equivalent IOU’s on a given gateway.
A quick word about adding trust to a gateway. Since anyone can
create a gateway it is critical that you only trust a properly established
gateway. This means it is at the very least incorporated and is run by
publicly known corporate officers. If the gateway is operated in an
anonymous manner, that means there is no accountability if the
service disappears. This is important: in your Ripple Wallet, you
should only give “trust” to gateway companies that you trust to be
reliable and responsible with your tokens of value, e.g. money. Since a
gateway is not usually a bank (at least at the time of this writing), there
is no FDIC style insurance for deposits made to a gateway entity. A
gateway that makes an effort to be legitimate has publicly known staff,
a business address, customer support details, and/or a phone number
with people who answer the phone during established hours of
business operation. If a Ripple gateway website disappears, your
IOUs do not disappear from your Ripple Wallet. The problem is that
redeeming those IOUs for their cash value is impossible unless a
third-party gateway accepts them for their cash equivalents. I can sum
this up in a very easy to understand manner, when it comes to
anonymous gateways: don’t trust them.
A standards group for gateways has been formed called the
International Ripple Business Association (IRBA), which operates
independently of Ripple Labs. IRBA has a set of requirements to make
sure that the gateways listed on IRBA’s website at are
legitimate organizations, operate using best practices for businesses,
etc. There are roughly 170 members of the IRBA at the present time,
including people who have expressed their interest in forming a
gateway for certain markets or areas in the world.
Consensus is where we start to get into the technical details of how
Ripple works. Understanding how everything works is not a
requirement to invest in a Ripple based asset. There are a lot of
complex things in life that do not required a deep understanding of
how it works. A couple of tech examples include are exactly how
computers work or exactly how a web browser works. We assume that
the professionals that make these tools know what they are doing and
they can spare us the gory details and let us move on to do what we
want to do with the tool. Understanding Ripple to the low level code
and protocol is likewise not a requirement to understand the ideas of
Ripple. If the technical details do not interest you feel free to skip over
this section. If you are familiar with Bitcoin like currencies you may
have heard that Bitcoin works through a scheme called “proof of
work.” Proof of work is a process in which computers co-operate on
solving a hard math problem that initially none of them know the
answer to. When the answer is found, the computer that solves the
problem is awarded a “block,” an award of Bitcoin (25 at the time of
this writing) and the block is distributed along to all the other
computers with a copy of all the transactions that took place in the
prior block. This is what allows transactions to take place. In technical
terms, this solves an important problem of how to solve the “double
spending problem.” A double spend is someone spending the same
units of currency twice. If everyone thought they could just use
spreadsheets to create a cryptocurrency, they would soon find that
someone would cheat by manually changing how many payments
were sent. This problem has existed for a long time and one way of
solving it was released to the public in 2008 by Satoshi Nakomoto, the
anonymous creator of Bitcoin. In 2011 Jed McCaleb was thinking of
ways to solve some of the problems with the “proof of work” system. In
particular, Jed wanted to solve the slow transaction time of Bitcoin.
Waiting for computers to solve the proof of work problem on Bitcoin
can take ten minutes or hours in time and that wait time is not good for
merchants or consumers using the system. What he came up was a
new approach called Consensus. If the majority of computers on a
digital currency network could agree that a transaction happened
there would be no reason to doubt that a transaction transpired. The
proof of work system relies on several computers agreeing that a
transaction occurred, which is called “confirmations.” After enough
confirmations occur it can be reasonably be assumed that a
transaction did in fact take place. With a consensus based approach,
transactions could take place in seconds rather than minutes. There
can also be a lot more transactions since the computational cost of
this system is low. This brings us to another problem that has long
been an academic puzzle, the Byzantine Generals' Problem. This problem
asks, “how do two generals come to an unanimous agreement when
they are separated by distances that create obstacles to
One answer to this problem is done with the Ripple software, the
network is setup to validate a transaction if 80% of validator nodes
agree a transaction took place.
Ripple Labs Engineer David Schwartz has this to say: “The number
was determined by simulation. If you set the threshold too low, the
consensus process completes very quickly but more frequently
doesn't actually reach consensus. If you set the threshold too high, the
consensus process takes much longer, but only very rarely fails to
actually reach consensus. (When you say, "I believe there's a
consensus", you can't actually be 100% sure there is in fact a
consensus or nobody can declare a consensus first.)”
On the Ripple forum recently, a mathematically minded member asked
David the following question “How does Ripple solve Byzantine
Generals' Problem such as no solution unless n ! 3t + 1, n = number
of processes in the system and t = number of traitors?”
“How Ripple solves the Byzantine Generals problem is simple. The
consensus process is permitted to fail because it does so harmlessly.
If the consensus process forms a ledger on which there actually is no
consensus, then there will be insufficient validations and the
consensus process will repeat. To put it in Byzantine Generals terms
if you get to the battle and the other armies aren't there, you just start
over, nothing catastrophic happens.”
And with that we can wrap our review of how Consensus works. For
more information please check out the Ripple wiki pages at https:// or
For completeness I just to mention Validator nodes and what they do.
The Ripple wiki has this to say about validators “The Ripple protocol
depends on a collection of validators who participate in the consensus
process and produce signed ledgers which get broadcast into the peer
to peer network. Clients and peers collect and depend on these signed
ledgers to determine what is the consensus ledger, or the "true" state
of the ledger. Crucial to the security of the network is that each Ripple
server choose to pay attention to a sufficiently large diverse set of
validators who are not colluding to defraud.” When 80% of validator
nodes agree that a edger is valid it gets signed and confirmed across
the entire Ripple network. This is an alternative solution to the
“Byzantine Generals problem” first solved by Bitcoin with mining.
Currency IOUs
IOU’s (pronounced how it is spelled, “eye oh u”) are the heart of how
most people will use and trade on Ripple. IOUs stand for “I owe you
(something).” We are most familiar with IOUs from our banking or
investor statement that is mailed monthly by financial service
providers. An IOU is a promise that a certain amount of funds that the
IOU issuer controls are funds in your account. The reality is that the
IOU holder has a total amount of funds that it controls and, from this
total, they use a database to organize what they owe their customers
and the number displayed to you is the IOU. IOUs on Ripple network
operate on the same principle, but instead of a banking or investment
entity creating and displaying the IOU to you, an IOU on the Ripple
network is an asset created by a Ripple gateway indicating “I promise
to redeem you a specific amount of this currency asset.” If you
received a payment for US dollars, you would see the deposit of the
USD IOUs in your Ripple Wallet.
IOUs are what make Ripple “the email of currencies.” The email
protocol does not care who you are sending a message to, or the
content of your email, and Ripple works the same way. The sender
and recipient of an email is like the sender and receiver of Ripple
wallets, the message in an email is similar to “what currency” and
“how much” is sent in the transaction (the message, in our email
analogy). The final lesson you should take away from this is that
an IOU has no value when it is not backed by an asset.
Pathfinding is pretty self-explanatory. This is how Ripple finds ways to
make the best available payment. Pathfinding is of most interest to
market markers and technical types to be able to serve market activity.
It is important to note that although Ripple is fast it is slow enough as
to make high frequency trading impossible and a part of the reason
why that is is because of how Pathfinding works.
Anyone with a Ripple wallet can trade the digital currency assets on
Ripple. Sending a payment of any sort using the Ripple network is
equivalent to making a trade on the foreign exchange (also known as
forex and FX) currency markets. Each currency has a three letter
abbreviation, and each currency trade is expressed as a pair that
includes the base currency and a counter currency. Each currency
pair (USD/XRP or EUR/JPY or CNY/BTC, etc.) is supported by a
gateway that has an order book of buyers and sellers of a particular
currency pair. The daily trading volume on the Ripple market is
growing rapidly. At the time of this writing (March 2014), the most
popular currencies traded are Chinese Yuan (CNY), USD, and BTC.
Automated trading is a popular choice for investors with the technical
know how to work with programming scripts to make a “trading bot.”
These bots connect to the Ripple network and look
at the bids and asks in certain currencies and trade according to user
defined parameters. Most of these bots require a fair amount of
technical knowledge and skill to setup and use. Although there are no
algorithmic trading services available to investors at the moment,
these are known to be in development. “Trade and forget” bots can be
extremely valuable as they work for you around the clock without tiring
or miscalculating.
Off market trading can also be very lucrative. Finding a market that
wants XRP but does not have the know-how how to get it is an
excellent way to build a business and increase Ripple adoption. If you
want to engage in off market trading, please get informed of local laws
before beginning. In the United States, to cite one example,
transactions greater than $10,000 need to be reported to the Federal
Financial Crimes Network (Fincen).
Market Makers
Market makers are people who provide liquidity (i.e., money) between
gateways to allow payments through a “pathway” of currencies to be
made. Much like how a road provides a path for a car to reach its
destination, a pathway is the route a transaction takes to complete a
payment.Although there are a few ways to become a market maker,
the easiest is with a simple order in the Ripple wallet for the same
currency between the two or more gateways you want to market make
The Ripple ecosystem is likely to see powerful waves (ha!) of new
services developed to take advantage of the new found possibilities
that Ripple provides. The most obvious area at the time of writing is
gateway services. Merchant services, remittance options, charities,
experimental hobbies, and commodities also are all promising areas
for innovators to place their stake.
A number of interesting companies have formed based entirely on the
Ripple protocol. Companies such as Fortune Harbor, Coinst,
RippleWise, SnapSwap, and others are leading the way in terms of
innovation and proving that the Ripple system is a viable business
model. Companies older than Ripple have also signed on to use the
service, most notable to date is Bitcoin exchange Bitstamp.
Creating or investing in a new company in the Ripple ecosystem is an
attractive option to the investor familiar with managing equity assets.
Ripple is so new and the opportunities it offers so largely untapped,
that the door is wide open for enterprising individuals and startups to
make a substantial impact with little startup costs.
Due Diligence Questions
Investors should be asking themselves some hard questions and have
honest answers before beginning to invest in Ripple. Here are some
basics for you to consider:
" How well do I understand Ripple?
" What do I not understand about Ripple?
" What are the risks involved?
" What are the legal and regulatory issues impacting Ripple in my
country of residence?
" What do I know about the principals in the enterprise in which I
might invest?
" Do I understand all the counterparty risks?
" What happens if the Ripple software becomes fundamentally broken
and can’t be fixed?
" Who are the major customers and the applications related to
investment opportunities?
" What are historical and projected growth rates?
" What is the expected market timing of new products, services, or
Along with these specific investor questions, I wanted to share this list
of best practices from the Ripple wiki:
You must protect yourself:
# Ripple Labs Inc. does not endorse, qualify, or guarantee the
performance of any merchant or gateway.
# Do not trust services operated anonymously, you have no
# Do not enter your Ripple username and password on any site
you do not trust with your funds.
# Do not enter your Ripple username and password on any site
that does not use https.
# Do not use a client provided by an entity you do not fully trust.
You must trust your client provider to be honest, secure,
competent, up to date, and perhaps more.
# For long term storage of XRP or IOU’s in a “cold wallet” consider
using the Desktop Client.
In the Future
The future will certainly bring many exciting and interesting areas for
Ripple investors to consider. In particular, I’m excited for the time
when options trading becomes more widely available (which will
likely be easier with the advent of “smart contracts” later in
2014). Smart Contracts could become the killer app for math-
based currencies. For example, by using math it is possible to
issue shares for a company or raise funds. To learn more on the
subject, I suggest a thorough reading of “Great Chains of
Numbers” by Tim Swanson. Ripple, like any active protocol,
faces intense scrutiny to identify and correct any inefficiencies as
well as for ways the protocol can be improved. Ripple is such a
new technology that its full impact on business and society will
not be known for many years. The day will come when people
will be so accustomed to a multicurrency wallet that they will ask
“why didn’t I think of that?” We’re witnessing the dawn of a
transformational technology without precedent.
How is Ripple different from Bitcoin?
The two are completely different. The most basic answer is that Ripple
is not designed to be used as a currency. Instead it is a payments
protocol. Bitcoin uses the “proof of work” mechanism commonly
known as “mining” to verify the validity of transactions. Instead, Ripple
uses a system called “consensus.” This fundamental difference with
Bitcoin means that they work differently and that they are designed for
different purposes.
I heard that mining digital currencies requires an incredible amount of
electricity, is Ripple similar?
Thankfully, no. Ripple requires no more electricity to run securely than
a normal highend computer server. The megatons of CO2 and
megawatts of electricity used by other alternatives won’t be an issue
with Ripple.
I heard that Ripple is a premined currency, is that true?
The answer is both “yes” and “no.” Ripple was not created or released
as a currency platform that used mining to verify transactions. The
team that created Ripple successfully solved some of the inherent and
fundamental problems that mining brings to a digital currency: the
slowness of transactions, the 51% attack problem, block chain splits,
etc. In defining the utility of cross currency payments, a fundamental
design principle is that long delays for payments is not acceptable.
Let’s face it, nobody wants the uncertainty of waiting for a payment to
What are validators? Ripple relies on dedicated computers called
validators to confirm that transactions are valid, why is this?
Validators are the “lightweight” way to verify that transactions are
valid. By design, Ripple Labs created the Ripple network to rely on
validators that they run and they know can be trusted to make sure
that transactions are valid. The majority of the validators that a
gateway trusts must be trustworthy. If the majority of them become
malicious or conspire against the gateway, they can make fraudulent
payments against the gateway. The way to mitigate this threat is by
using community accepted trusted nodes such as those run by Ripple
I heard someone forgot their password or had their coins stolen, are
those coins or wallets inaccessible forever?
Yes, unfortunately they are. Neither Ripple Labs nor anyone else can
restore your password or recover stolen coins. Payments in Ripple are
irreversible due to how some of the low level math functions work (for
more information on the underlying technologies, you can research
“public key cryptography” and “message signing”).
I want to know more about how to setup a gateway, where do I start?
What is a Secret Key?
Your wallet’s Secret Key is your secret entrance into your wallet if you
ever forget your password. On a technical level, your Secret Key can
also be used as part of a program to do things for you such as running
a trading bot. Secret Keys are named “secret” because they must be
absolutely unavailable to anyone but those trusted to access the
account. If someone gets your Secret Key, they can do whatever they
want with your assets. If you are have reason to believe someone has
gained unauthorized knowledge of your Secret Key, you should create
a new wallet and send your assets over to the new wallet as soon as
What kind of venture capital or incubators are available to Ripple
The recently launched Crosscoin Ventures is a good starting point for
Ripple developers seeking funding. Headed by entrepreneurial startup
and VC veterans, Crosscoin has the enviable position of being located
in the same office building in San Francisco as Ripple Labs. Look for a
number of high quality and innovative services to emerge from the
Crosscoin accelerator.
What is the best technical resource for Ripple?
The Ripple documentation resource is located at
wiki/ For further information, I suggest connecting with the developers
on the IRC channel on the Freenode network #ripple.
I don’t like how Ripple Labs does X Y or Z, what do you have to say
about that?
Ripple Labs is a very young startup. Expectations for this service are
high, perhaps too high. It takes time to build worldclass teams, and
staffing resources are always limited. Give your issue some time and I
am certain that you will eventually see improvements to the issue you
are concerned with.
What are good community resources for getting answers to my
additional questions?
My favorite resource is the forum at but
alternatives exist including
I have something I want to discuss with Ripple Labs, what is the best
way for me to do so?
Talk to the business development team at or the
developer relations team at
Gateways are service providers that enable users to deposit money
into and withdraw money out of their gateway accounts on the Ripple
Ripple Labs, Inc. owns the intellectual property of the Ripple protocol,
and promotes Ripple’s wider use and greater usefulness.
Wallet is the digital device where individuals hold, access, and use
their digital currencies in Ripple.
Ripples are the Ripple network’s native currency, represented by the
letters XRP.
IOU is a promise that a certain amount of funds that the IOU issuer
controls are funds in your account. An IOU on the Ripple network is an
asset created by a Ripple gateway indicating “I promise to redeem you
a specific amount of this currency asset.”
Traders are people who use their Ripple Wallets to exchange
currencies (govt.issued currencies like USD, CNY, etc. and digital
currencies like XRP, BTC, etc.), functionally similar to trades made on
the Foreign Exchange (FX) currency markets.
Market Makers provide liquidity (i.e., money) that allows payments to
follow a “pathway” between gateways.
Enterprises include business startups in the Ripple ecosystem, such
as new gateway services, merchant services, remittance options,
charities, experimental hobbies, and commodities – all are promising
areas for business innovators and early stage investors.
Due Diligence is the process of thorough research before making
Validators are dedicated computer nodes that confirm a transaction is
valid through the
Consensus process.
About the Author
Andrew White serves as Assistant Director of the International Ripple
Business Association, which is the premier organization of merchants
and businesses that accept ripple XRP as payment for goods and
services. Andrew has been active for years in the Bitcoin communities
in San Francisco and the Bay Area, and began buying and selling
ripple XRP soon after its introduction. Copyright 2014 Andrew White