Ripple CEO Recounts How XRP Was Created

An influential figure in the cryptocurrency field, Xaif, recently shared a post highlighting a detailed article by Ripple's Chief Technology Officer, David Schwartz, about the origins of the XRP Ledger (XRPL). The post quotes Schwartz, stating that he, along with Jed McCaleb and Arthur Britto, identified the main flaws in Bitcoin and sought to design a blockchain system to address those limitations. According to a tweet from Xaif, Schwartz emphasized that the team aims to create something "faster, more efficient, and truly decentralized," in contrast to Bitcoin's proof-of-work design. Attached to the tweet is a video of Schwartz recounting the timeline and technical basis leading to the development of XRPL, starting from 2011.

Initial Motivation and Design Philosophy In the video, Schwartz clarifies that the original concept originated from Jed McCaleb in 2011, at a time when proof of work (PoW) was considered an essential factor for the success of Bitcoin. Schwartz noted that despite the general sentiment, there are signs that PoW may not be a sustainable or fair blockchain consensus model. He stated that one of the initial assumptions was that mining would remain an open process, accessible to anyone with computational capability. However, over time, it has become clear that this model has naturally evolved into a centralized structure that benefits the most efficient operators, thereby creating systemic inequality and inherent stakeholders. Schwartz explained that McCaleb proposed the idea of replacing PoW with a distributed consensus algorithm—a method that has long existed in computer science but has largely gone unexplored in blockchain systems. Schwartz began researching the implementation of this concept in November 2011 to verify whether a blockchain that does not use PoW could operate effectively and what unique properties it could offer. Breakthroughs and Technical Differences The Chief Technology Officer (CTO) of Ripple stated that they quickly discovered this model operates efficiently and provides special features not available in Bitcoin. Notably, the consensus algorithm used in XRPL is "leaderless", eliminating the need for a single block producer. Schwartz explained that in systems like Bitcoin or Ethereum, a chosen entity creates each block, which poses a risk of transaction manipulation, especially in use cases like asset exchanges. In contrast, the XRP Ledger does not rely on a designated head, making it particularly suitable for fair and transparent financial activities.

He emphasized that this architectural decision has led to the realization that XRPL could serve as a platform for a decentralized asset exchange. Arthur Britto soon realized that the absence of a block producer has minimized risks such as front-running, transaction reordering, or selective censorship. As a result, the team designed an exchange where participants can place buy orders and execute trades with lower systemic risk. Multi-Asset Ledger and Liquidity Group Inspired by Ryan Fugger's previous work in 2004, the team expanded XRPL to support issued assets, which Schwartz described as the first version of a stablecoin. This design incorporates a decentralized exchange (DEX) and an account-based model, instead of Bitcoin's UTXO model. These changes enable multi-asset trading and enhance interoperability. Schwartz pointed out that even those who believe that Bitcoin will dominate global finance must acknowledge the transitional nature of value between different assets. In this context, a multi-asset ledger is necessary. He stated that XRPL was introduced in mid-2012 as a fully-featured platform where users can access public liquidity pools. The system allows users to hold one asset and pay with another asset through automatic routing and efficient order routing features. He noted that this flexibility has addressed the reality that a large portion of global value is not priced in Bitcoin or any cryptocurrency. Completion and Heritage According to Schwartz, by early to mid-2012, XRPL was essentially complete with core features similar to today, including the account model, issued assets, XRP as a native currency, and an integrated decentralized exchange. This technology is built on efficient transaction execution, decentralized liquidity, and real-world interoperability across multiple assets. Schwartz concluded that these factors position XRPL as a uniquely capable blockchain platform, particularly for financial applications that require fairness, speed, and decentralization.