The XRP Ledger is a decentralised cryptographic ledger powered by a network of peer-to-peer servers.
Blockchain technology has been initially created to enable trust in an untrustworthy system. When the consensus is reached, trust is established.
Blockchains are trivial to create. The complicated part is the consensus mechanism that allows the blockchain to progress. Keeping in mind that the consensus is the most important property of any decentralized payment system.
The XRP Ledger (XRPL) leverages a distributed ledger technology, which is slightly different from common blockchain in terms of the way the consensus is gained across the system. Blockchains such as Bitcoin or Ethereum 1.0 are reaching consensus with a proof of work algorithm, which is only one example of consensus algorithms. Proof of stake, proof of capacity, proof of spacetime, etc are other examples.
The XRPL defines a set of rules all participants follow. It is called the consensus protocol, which is quite unique as it was never implemented before. The primary role of the consensus protocol is to resolve the double-spend problem and to do so the protocol has been designed to have the following important properties, in order of priority: Correctness, Agreement, Forward Progress.
This protocol is still evolving, as is our knowledge of its limits and possible failure cases. For academic research on the protocol itself, see Consensus Research.
Distributed ledger technology is a hybrid form of the strict definition of blockchain technology as it chains ledgers, not blocks.
Roughly every 4-6 seconds the ledger closes and the next starts based on the last closing ledger totals. The full ledger history is kept on node servers, while validator servers work to reach consensus to validate transactions. For the XRPL, the consensus algorithm and Unique Node Lists (UNL) are important as they are the custodians of the cryptographic ‘truth’.
UNL are the lists of trusted validator servers a given participant believes will no conspire to defraud them. The UNL on validator servers can be modified at any time. Currently, Ripple provides a default, and recommended list which is evolving with the network expansion. Eventually, Ripple intends to remove its validator servers from the UNL with the goal to make a fully decentralised system.