What is a destination tag and why does Ripple (XRP) use them

What is a destination tag?

If you send Ripple (XRP), you need to use something called a destination tag. This is a unique number, which is created when your wallet was created. If you do not include the destination tag, your coins may be lost.

The need for a destination tag varies, depending on where the wallet is held.

The Ripple wallet is on an exchange

Each user on an exchange is given a destination tag - all transactions using the tag are sent to their account. Without this destination tag, the funds sent go into a centralised exchange wallet, making it a challenge to recover your coins.

You created and own the wallet personally

The destination tag has less of an impact - if you send coins to the wallet address, you should always receive the coins.

You cannot find a destination tag anywhere

In some cases when sending coins you will be forced to give a destination tag, but you may not have one. If you are absolutely sure you were not given one when you created the wallet, put in the tag 12345678. If you do this, you must be sure you are not sending the coins to an exchange, and that you are the real owner of the wallet.