Ripple (company)

Ripple
Industry Computer software
Founded 2012[1]
Founder Chris Larsen, Jed McCaleb
Headquarters San Francisco, California
Area served
 Worldwide
Key people
 Ryan Fugger (Concept Originator)
Alan Safahi (Advisory Board)
David Schwartz (Chief Cryptographer)
Products Ripple Payment and Exchange Network
Number of employees
 105 (2015)[2]
Website Ripple.com

The company Ripple is the creator and a developer of the Ripple payment protocol and exchange network. Originally named Opencoin and renamed Ripple Labs until 2015, the company was founded in 2012 and is based in San Francisco, California.[1]

History

Ryan Fugger conceived Ripple in 2004 after working on a local exchange trading system in Vancouver. The intent was to create a monetary system that was decentralized and could effectively empower individuals and communities to create their own money. Fugger later built the first iteration of this system, RipplePay.com. Concurrently, in May 2011, Jed McCaleb began developing a digital currency system in which transactions were verified by consensus among members of the network, rather than by the mining process used by Bitcoin. In August 2012, Jed McCaleb hired Chris Larsen and they approached Ryan Fugger with their digital currency idea. After discussions with McCaleb and long-standing members of the Ripple community, Fugger handed over the reins. In September 2012, Chris Larsen and Jed McCaleb co-founded the corporation OpenCoin.[3]

OpenCoin began development of the ripple protocol (RTXP) and the Ripple payment and exchange network. On 11 April 2013, OpenCoin announced it had closed an angel round of funding with several venture capital firms. That same month, Open Coin acquired SimpleHoney to help it popularize virtual currencies and make them easier for average users.[4] On 14 May 2013, OpenCoin announced that it had closed a second round of angel funding.[5] In July 2013, Jed McCaleb separated from active employment with Ripple.[6]

On 26 September 2013, OpenCoin officially changed its name to Ripple Labs, Inc.[1] Their CTO, Stefan Thomas, further announced that the source code for the peer-to-peer node behind the Ripple payment network was officially open source. Parts of Ripple, particularly a JavaScript-based web client, had been open source months before, but the release of the peer-to-peer "full node" Rippled meant that the community now had the required tools needed to maintain the Ripple network on its own.[7]

On 5 May 2015, Ripple received a US$700,000 civil money penalty from FinCEN.[8] On 6 October 2015, the company was rebranded from Ripple Labs to Ripple.[9]

Business model

Ripple is a privately funded company. It has closed four rounds of venture capital funding, which included two rounds of angel funding, one round of seed funding and one Series A round.[10][11][12][13][4]

Date Funding type Investor Amount
April 2013 Angel Andreessen Horowitz, FF Angel LLC, Lightspeed Venture Partners, Pantera Capital, Vast Ventures, Bitcoin Opportunity Fund US$2.5 million
May 2013 Angel Google Ventures, IDG Capital Partners US$3.0 million
November 2013 Seed Core Innovation Capital, Venture51, Camp One Ventures, IDG Capital Partners US$3.5 million
May 2015 Series A IDG Capital Partners, Seagate, AME Cloud Ventures, ChinaRock Capital Management, China Growth Capital, Wicklow Capital, Bitcoin Opportunity Corp, Core Innovation Capital, Route 66 Ventures, RRE Ventures, Vast Ventures, Venture 51 US$28 million
October 2015 Series A Santander InnoVentures US$4 million

Revenue

Ripple's revenue sources include professional services provided to financial network operators being integrated with Ripple, software built to integrate legacy financial systems with Ripple and the native currency (XRP). Ripple is also backed by several established investors that provide an additional layer of financial stability.[14]

Programs and projects

Charitable contributions

Of the XRP80 billion that Ripple Labs was gifted, Ripple follows a distribution strategy that encompasses payments to business partners such as gateways, market makers and charitable organizations.[15]

Ripple Labs began working with the World Community Grid in November 2013. The World Community Grid pools surplus processing power from volunteers’ computers and electronic devices to support humanitarian causes such as fighting AIDS, improving solar energy and defeating cancer. Individuals who join the Ripple Labs team and donate their spare processing power are rewarded with XRP. As of 18 March 2014, Ripple Labs has given away XRP134,528,800 through the World Community Grid at a rate of XRP1,250,000 per day.[16][17][18]

Software development

Ripple Labs launched a developer portal designed to bring together tools and resources for the developer community. These include an API for its payment network, based on the popular REST API standard. The firm also developed a bounty program for third-party developers, to encourage them to create services for its combined protocol and payment network.The first one was claimed by developer Mathijs Koenraadt who developed a Ripple extension to e-commerce platform Magento. The extension enables Magento to read the Ripple public ledger and create an invoice. European luxury jewelry outlet Rita Zachari has adopted it, and is one of the first merchants to offer a Ripple Wallet payment option at checkout.[2]

Ripple Labs developed and released an iOS client app for the iPhone, available in Apple’s App Store, that allows iPhone users to send and receive any currency via their phone.[2] With Apple’s removal of the Blockchain wallet app on 6 February 2014,[19] the Ripple client app is the only iOS app that allows for the transmission and reception of Bitcoin.

On 2 July 2013, Ripple Labs announced its linking of the Bitcoin and Ripple protocols via the Bitcoin bridge. The Bitcoin Bridge allows Ripple users to send a payment in any currency to a Bitcoin address.[20][21]

Partnerships and initiatives

In March 2014, CrossCoin Ventures launched an accelerator which funds companies that work to advance the Ripple ecosystem. The firm funds accepted startups with up to US$50,000 (equivalent to $49,979 in 2015) in XRP, Ripple's native currency, in exchange for a 3% to 6% stake in diluted common stock. Mentorship and support is provided by CrossCoin and Ripple Labs, Inc.[22]

In October 2013, Ripple Labs Inc. expanded the distribution of its digital currency and money-transfer software through an agreement with cash-transaction network ZipZap Inc. Under the agreement, Ripple will let consumers link their Ripple wallets to ZipZap accounts. The agreement allows individuals the ability to transform cash into an electronic payment, which can be sent anywhere in the world instantly.[23][24]

In cooperation with other industry leaders, Ripple Labs became a co-founding member of the Digital Asset Transfer Authority (DATA) in July 2013. DATA provides best practices and technical standards, including anti-money laundering compliance guidance for companies that work with digital currency and other emerging payments systems. The committee works as a liaison among public officials, businesses and consumers and create common rules to protect consumers. The initiative attempts to create a cohesive voice of Bitcoin community members when interacting with regulators.[25][26]

Awards and recognitions

For its creation and development of the ripple protocol (RTXP) and the Ripple payment/exchange network, the magazine MIT Technology Review recognized Ripple Labs as one of 2014's 50 Smartest Companies in its February 2014 issue. The criteria for the recognition revolved around "whether a company had made strides in the past year that will define its field."[27]

On 9 February 2014, Ripple Labs was named as a finalist for a 2014 PYMNTS Innovator Award in two separate categories: Best New Technology as well as Most Disruptive Company. The recognition pertains to Ripple Labs work in creating Ripple, an open-source, distributed payment protocol powering a new global value web.[28]

FINCEN enforcement action for federal law violations

On 5 May 2015, FINCEN, the U.S. Federal regulatory body that protects the U.S. financial system from being exploited by illicit activity, fined Ripple Labs US$700,000. The FINCEN announced stated that Ripple Labs "willfully violated several requirements of the Bank Secrecy Act (BSA) by acting as a money services business (MSB) and selling its virtual currency, known as XRP, without registering with FinCEN, and by failing to implement and maintain an adequate anti-money laundering (AML) program designed to protect its products from use by money launderers or terrorist financiers."[8]

References

  1. 1 2 3 "Company Overview of Ripple Labs Inc.". BusinessWeek. Retrieved 18 March 2014.
  2. 1 2 3 Bradbury, Danny. "Ripple Courts Developers, Entrepreneurs With New Initiatives". CoinDesk. Retrieved 18 March 2014.
  3. ↑ Reutzel, Bailey. "Disruptor Chris Larsen Returns with a Bitcoin-Like Payments System". PaymentSource. Retrieved 18 March 2014.
  4. 1 2 Rip, Empson (11 April 2013). "Now Backed By Andreessen & More, OpenCoin Looks To Build A Better Bitcoin — And A Universal Payment Ecosystem". TechCrunch. Retrieved 17 March 2014.
  5. ↑ Shirley, Siluk. "Google Ventures invests in Bitcoin competitor OpenCoin". CoinDesk. Retrieved 18 March 2014.
  6. ↑ Southurst, John. "Ripple Creator Donates $500,000 XRP to Artificial Intelligence Research Charity". CoinDesk. Retrieved 19 March 2014.
  7. ↑ Vitalik, Buterin (26 September 2013). "Ripple is Officially Open Source". Bitcoin Magazine. Retrieved 18 March 2014.
  8. 1 2 "FinCEN Fines Ripple Labs Inc. in First Civil Enforcement Action Against a Virtual Currency Exchanger" (PDF) (Press release). FinCEN. 5 May 2015. Retrieved 6 May 2015.
  9. ↑ Liu, Alec (6 October 2015). "A New Chapter for Ripple". Ripple. Retrieved 2015-10-22.
  10. ↑ "Ripple Adds Santander InnoVentures Fund as Series A Investor" (Press release). Ripple. 6 October 2015. Retrieved 13 April 2016.
  11. ↑ "Ripple Labs Raises $28 Million From IDG Capital Partners, CME Group, Seagate, and Others" (Press release). Ripple Labs. 18 May 2015. Retrieved 13 April 2016.
  12. ↑ "Ripple Labs Announces $3.5 Million Investment Round" (Press release). Ripple Labs. 12 November 2013. Retrieved 17 March 2014.
  13. ↑ Spaven, Emily (12 November 2013). "Online payment network Ripple Labs receives $3.5m in new funding". CoinDesk. Retrieved 17 March 2014.
  14. ↑ "Ripple Protocol for Financial Transactions" (PDF).
  15. ↑ Brian, Jackson. "Beyond Bitcoin". itbusiness.ca. Retrieved 19 March 2014.
  16. ↑ Danny, Vega. "Ripple’s Big Move: Mining Cryptocurrency with a Purpose". Heavy. Retrieved 18 March 2014.
  17. ↑ "Computing For Good". Ripple Labs. Retrieved 18 March 2014.
  18. ↑ "World Community Grid". IBM. Retrieved 18 March 2014.
  19. ↑ Kirk, Jeremy. "Apple removes Blockchain, last Bitcoin wallet app, from iOS App Store". PCWorld. Retrieved 18 March 2014.
  20. ↑ "OpenCoin Extends Ripple Network to Include All Bitcoin Merchants and Users". Yahoo Finance. Retrieved 18 March 2014.
  21. ↑ Gilson, David (3 July 2013). "OpenCoin: Ripple Users Can Send Payments To Bitcoin Addresses". CoinDesk. Retrieved 18 March 2014.
  22. ↑ Alice, Truong (5 March 2014). "Move Over, Bitcoin. CrossCoin Bets On Ripple". Fast Company. Retrieved 18 March 2014.
  23. ↑ Olga, Kharif. "Ripple Takes on Western Union With Deal to Grow Payments". Bloomberg. Retrieved 18 March 2014.
  24. ↑ Reutzel, Bailey. "With ZipZap and SnapSwap, Ripple Adds More Ways to Load Money". PaymentsSource. Retrieved 18 March 2014.
  25. ↑ Reutzel, Bailey. "Innovators Create Self-Regulating Body for Virtual Currency". PaymentsSource. Retrieved 18 March 2014.
  26. ↑ Bradbury, Danny. "Bitcoin industry leaders launch DATA, a self-regulatory body for digital currencies". CoinDesk. Retrieved 18 March 2014.
  27. ↑ Bergstein, Brian. "50 Smartest Companies". MIT Technology Review. Retrieved 12 March 2014.
  28. ↑ "Ripple Labs Named a Finalist for a PYMNTS 2014 Innovator Award for Ripple Payments Protocol". Yahoo Finance. Retrieved 18 March 2014.

External links

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