Ripple CEO Recounts How XRP Was Created

Crypto influencer Xaif recently shared a post highlighting Ripple CTO David Schwartz’s detailed account of the origins of the XRP Ledger (XRPL). The tweet quoted Schwartz stating that he, along with Jed McCaleb and Arthur Britto, identified key flaws in Bitcoin and sought to design a blockchain system that addressed those limitations.

According to Xaif’s tweet, Schwartz emphasized that the team aimed to create something “faster, more efficient, and truly decentralized,” diverging from Bitcoin’s proof-of-work design. Attached to the tweet was a video of Schwartz recounting the timeline and technical rationale that led to the development of XRPL, beginning in 2011.

Early Motivation and Design Philosophy

In the video, Schwartz clarified that the initial concept came from Jed McCaleb in 2011, at a time when proof-of-work (PoW) was considered essential to the success of Bitcoin.

Schwartz noted that despite the prevailing sentiment, signs were already emerging that PoW might not be a sustainable or fair model for blockchain consensus. He stated that one of the early assumptions was that mining would remain an open process accessible to anyone with computing power.

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However, over time, it became clear that this model naturally evolved into a centralized structure favoring the most efficient operators, thereby creating systemic inequities and entrenched stakeholders.

Schwartz explained that McCaleb introduced the idea of replacing PoW with a distributed agreement algorithm—an approach long established in computer science but largely unexplored in blockchain systems.

Schwartz began working on the implementation of this concept in November 2011 to validate whether a PoW-free blockchain could function effectively and what unique properties it might offer.

Technical Breakthroughs and Differentiation

The Ripple CTO stated that they quickly discovered the model worked and offered distinctive features not present in Bitcoin. Notably, the consensus algorithm employed in XRPL was “leaderless,” eliminating the need for a single block producer.

Schwartz explained that in systems like Bitcoin or Ethereum, a selected entity produces each block, which introduces the potential for transaction manipulation, especially in use cases such as asset exchanges. The XRP Ledger, by contrast, did not rely on a designated leader, which made it particularly suitable for fair and transparent financial operations.

He emphasized that this architectural decision led to the realization that XRPL could serve as the foundation for a decentralized asset exchange.

Arthur Britto recognized early on that the absence of a block producer mitigated risks such as front-running, reordering of transactions, or selective censorship. As a result, the team designed an exchange where participants could place offers and conduct trades with reduced systemic risk.

Multi-Asset Ledger and Liquidity Pools

Drawing inspiration from Ryan Fugger’s earlier work in 2004, the team extended XRPL to support issued assets, which Schwartz described as the earliest version of stablecoins. The design incorporated a decentralized exchange (DEX) and an account-based model, instead of Bitcoin’s UTXO model. These changes enabled multi-asset transactions and improved interoperability.

Schwartz pointed out that even those who believed Bitcoin would dominate global finance had to acknowledge the transitional nature of value across different assets. In that context, a multi-asset ledger was necessary. He stated that the XRPL was pitched in mid-2012 as a feature-complete platform where users could access public liquidity pools.

The system allowed users to hold one asset and make payments in another through automated pathfinding and efficient order routing. This flexibility, he said, addressed the reality that the vast majority of global value was not denominated in Bitcoin or any single cryptocurrency.

Completion and Legacy

According to Schwartz, by early to mid-2012, the XRPL was essentially complete with the same core features it maintains today, including account models, issued assets, XRP as a native currency, and a built-in decentralized exchange.

The technology was structured around efficient transaction execution, decentralized liquidity, and practical interoperability across multiple assets. Schwartz concluded that these elements positioned the XRPL as a uniquely capable blockchain platform, especially for financial applications that required fairness, speed, and decentralization.