Ripple is a payment protocol, a part of which are the crypto tokens known as XRP.
Understandably, investors may find this confusing, especially as you often see XRP, the platform’s native currency, described as ‘Ripple coins’. Technically, you cannot buy Ripple, but you can buy XRP via a cryptocurrency exchange.
RippleNet is the brand name of the payment system used by multiple global banking institutions, which is capable of transferring funds, sent and received in local currency, within five seconds, processing at a rate of around 4000 transactions per second.
Ripple started life as OpenCoin in 2004. A product intended to provide a much faster alternative to the SWIFT system favoured by financial corporations at that time, but also to provide a secure payment option for members of its global community network.
There were several driving factor in its development – the ability to use it on a peer-to-peer level, achieving true IoV (Internet of Value) status and enabling the movement of any currency to any part of the world at the speed of the Internet.
Alongside RippleNet, Ripple also developed its native cryptocurrency, XRP. The total coin release was a fixed amount totalling 100 billion units. You can only buy Ripple tokens via a crypto exchange, but XRP trading quickly placed the cryptocurrency amongst the top five, where it has remained.
The RippleNet, as we know it today, was first launched in 2012 and since 2013, the protocol has been adopted by an estimated 38% of the world’s top 100 banks. Following a steady increase in the number of banks using RippleNet, at the end of 2017 there was a rush to buy XRP and it reached a market value of $73 million, only overshadowed by Bitcoin.
A large percentage of the banking system still uses and costly systems to transfer money around the world. These systems require third-party intervention and incur heavy currency exchange costs.
Conversely, RippleNet was developed as a peer-to-peer system, enabling the transfer of any currency, anywhere in the world. The time it takes to complete is equivalent to sending an instant message, just to give you an idea.
Banks do not buy Ripple or use XRP as a cryptocurrency in its own right, but it does have a big part to play in the RippleNet ‘ecosystem’. In that context, it was developed as a digital token, or messenger, which carries the representative value of the transaction between parties. More RippleNet usage also inspires more investors to buy Ripple tokens.
Ripple trading experts describe the protocol as a true ‘Internet of Value’ (IoV) enabling the global movement of money as information transmits across the Internet; one that does not require you to buy Ripple, or be involved in any form of XRP trading.
Ripple is a privately-owned company. As much as you might like to, you cannot buy Ripple shares through a stock exchange as it has never been publicly-traded. According to Forbes, it is worth over $800 billion. The XRP currency accounts for a substantial chunk of that, with a $20 billion market cap.
The only other route into Ripple trading is to approach private investors via a secondary market, if you enjoy ‘accredited investor’ status. To qualify, you need $1 million of liquid assets and proven investment income of $200,000+ over three years. Luckily, you don’t have to be so wealthy to buy Ripple coins, or invest in other forms of XRP trading!
The original XRP stock released by Ripple was 100,000 billion coins/tokens, with each further divided into 1,000,000 drops. Every transmission of currency effectively ‘destroys’ a portion of the total stack of XRP, but the loss is of little concern, even to someone who buys Ripple as an investment.
Putting that into perspective, the cost of a transaction using Ripple’s protocol is 0.00001 XRP. To buy Ripple tokens, you need just $0.30 per coin, which really makes the cost a ‘drop’ in the ocean.
There are two separate factors to consider here; the Ripple payment protocol itself, which is commonly known as the RippleNet and Ripple’s native cryptocurrency, XRP. Whilst the two are interlinked, they are not reliant on each other.
In early 2020, RippleNet was awarded SOC 2 provider certification, the highest available level, indicating that it provides “excellence” in terms of both security and privacy. To achieve SOC 2, a business must undergo a lengthy investigation and auditing process, which is carried out by an Independent CPA.
Alongside SOC 2 certification, speed, flexibility and low cost are all reasons that a number of global banks are now adopting RippleNet to make financial transfers, rather than the more cumbersome and expensive SWIFT system. However, you don’t need to be a big corporation to benefit, RippleNet was created for everyone to use, providing an almost-instant way to transmit and receive money, anywhere in the world; there is no obligation to buy Ripple currency, or to use it as your transmission currency.
Looking deeper into XRP trading, you will find that, it is not ‘mined’ in the same way as other cryptos. Instead, all transactions are scrutinised by trusted UNL validators, which form a part of the XRP Ledger. The process as a whole is known as the ‘XRP Ledger Consensus Protocol’ but has no bearing on the way you buy XRP.
There are many good reasons for Ripple to select this protocol over the standard blockchain approach applied by other cryptocurrencies; mainly speed of processing and cost. The XRP Ledger is updated every 3-5 seconds, so it is as close to being in real time as Internet speeds permit. In terms of cost, for each transaction, 0.00001 XRP is destroyed, making it literally, a small price to pay.
The first thing you will find is that you don’t buy Ripple, you buy XRP. However, because of the confusion you will see many websites quoting the Ripple price or offering Ripple trading. To clarify, when you buy XRP, you buy Ripple tokens, which are the company’s native cryptocurrency.
Because it is difficult to buy XRP with fiat currency; the easiest way around that is to first buy Bitcoin, which is the most readily-available currency. Residents of Canada are permitted to use a debit card on most exchange platforms for this purpose.
When you buy crypto online, expect to pay a transaction fee of around 4%. Once you have received it, the Bitcoin can be used to buy XRP, which may require using an altcoin exchange like Bittrex or Binance. Tip: Searching the ‘best trading sites’ or ‘Ripple trading’ will give you similar options to ‘buy XRP’ or ‘buy Ripple’.
As we have described, the only way you can buy crypto currency online is to use an exchange service. Crypto exchanges fall into two categories, centralised and decentralised. It is important for you to understand the differences in order to make an informed choice.
A centralised exchange acts as the ‘middle man’ and will require you to register as a client in a similar process to that employed by a brokerage service. You must conform to its KYC and provide various forms of identification. This type of exchange provides a platform for acquisition and is generally made user-friendly. One example is Binance, where you can buy Ethereum for a standard fee, or buy Binance Coin at a lower commission.
The downside is that your cryptocurrency is held by the exchange. If you buy Ripple, for example, it is held in their custodial wallet. Although centralised exchanges carry insurance, this is only valid for a loss which occurs due to a failing on the part of the exchange, not the device you use to access it; you are ultimately responsible for your online security. If you buy Ripple, but later your device is compromised, you will lose your investment.
A decentralised exchange consists of a bank of servers, each made up of multiple computers. The server is therefore not local and is not controlled by an individual person or machine. In this scenario, when you buy XRP, you will hold it in a wallet and own the keys to it. This type of exchange is more in keeping with the philosophy of Ripple trading, in that it is not licensed or regulated and all transactions are entirely anonymous. As well as some of the best XRP trading opportunities, some less-prevalent cryptos are available, so you could buy Bitcoin Cash, or even buy Litecoin at a good price.
Decentralised exchanges offer no comeback if something goes wrong. You are entirely responsible for protecting your wallet and for the private keys and passwords to unlock it. Also, if an error is made when you buy XRP, there is no way to revoke or edit transactions.
One other opportunity you may encounter is cryptocurrency derivatives, often described as Ripple trading or XRP trading. In that scenario, you do not buy XRP or buy Ripple outright, you are speculating on the fall or rise of the market price.
Although there concerns that XRP will be adopted by banks and become a centralised currency, there is no evidence to suggest that this will happen; despite some XRP trading reviews suggesting otherwise.
XRP has shown itself to be a fairly stable cryptocurrency compared to Bitcoin or Ethereum and you can certainly buy XRP with a much smaller investment. It has only exhibited volatility following a major disruption, an example being the Spark airdrop towards the end of 2020, which targeted XRP wallets, causing a sharp decline in the XRP price and a rise in Ripple trading.
At the time of writing, there are still mixed opinions about the future of XRP trading. Some financial experts believe that Ripple’s price prediction for its currency is accurate and it will continue to rise. Others remain firm in their XRP price prediction that the total opposite will happen.
The main concern within the Ripple trading community is that XRP will become centralised due to RippleNet being widely-used by major banks. However, Ripple predictions are rarely wrong and the company states XRP trading will remain decentralised.
There is also speculation as to the authenticity of XRP. Ripple owns 63% of its own cryptocurrency, raising questions about inappropriate Ripple trading (or XRP trading), as a result. If you have already chosen to buy Ripple, this is unlikely to have worried you.
SEC action taken against two Ripple CEOs in December 2020, accused them of raising over $1.3B “through the sale of digital assets known as XRP in an unregistered securities offering to investors in the U.S. and worldwide.” However, we have found no complaints to support that from those who buy XRP.
The announcement resulted in a price drop, with some investors believing there was potential for an XRP trading scam and opting to sell, whilst others took the opportunity to buy XRP at a low price. The case is not concluded and our XRP prediction is that it will ultimately be dismissed.
With few exceptions, XRP has shown far less volatility than some other highly-traded cryptocurrencies like Bitcoin or Ethereum. Any notable XRP trading price fluctuations are directly relatable to specific events, rather than to market volatility.
Not only does it add to the IoV (Internet of Value), RippleNet is accessible to everyone, not just major corporations and it provides a highly-secure and anonymous way to perform financial transactions. You do not have to buy Ripple or engage in XRP trading to use this facility.
There is still a considerable amount of Ripple tokens available, as it is less-popular with big investors than Bitcoin and Ethereum. It is ideal for low-level investors who can buy XRP at a realistic price, or speculate on its price movements in a Ripple trading environment.
In this review, we have set out to provide you with the sufficient facts for you to proceed with investing in a product. However, we are not financial advisers and the information contained here is not intended to influence you to buy Ripple, buy XRP or enter into derivative XRP trading.
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