Ripple is one of the largest cryptocurrencies in the market and has been piquing the interest of a growing number of cryptocurrency supporters in the recent years. Read on to understand what Ripple is, when and why it was formed, and to learn how to buy, sell and trade Ripple step-by-step.
What is Ripple?
Ripple was launched in 2012 and runs on a distributed open-source protocol. One of the biggest differences between Ripple and other cryptocurrencies is the fact that it does not run on blockchain technology.
Started by the company Ripple Labs, which continues to develop and update the system to date, Ripple promises to deliver secure, instant and nearly free global financial transactions of any size with no chargebacks.
While Bitcoin is aimed at easing the payment of goods and services, Ripple focuses on settling payments, exchanging currency and money remittance for banks and other payment networks. Although the technology can be used for peer-to-peer transactions, it is built for enterprise, with the aim of moving large amounts of money around the world as quickly as possible.
The difference between Ripple and XRP
The token used to facilitate transactions on the Ripple network is called XRP.
Traditionally, settlement systems use US dollars as the common currency when converting between other currencies. This process takes a lot of time and is costly in terms of incurred fees. By contrast, the Ripple network converts currencies to XRP, hence eliminating any transaction fees and reducing the time it takes for a transaction from days to mere seconds.
Objectives of Ripple
Unlike most other cryptocurrencies that mainly focus on peer-to-peer transactions, Ripple is designed to make transactions faster and more convenient for banks and other large financial institutions.
The idea is to provide a system that allows direct transfer of assets such as gold and money almost in real-time, while remaining cheap and more transparent than today’s SWIFT payment system.
Advantages of Ripple
Clear business case - Ripple allows financial institutions to embrace and make use of cryptocurrencies, enabling a better way of doing business
Speed – Ripple is able to handle more than 10,000 transactions per second
Disadvantages of Ripple
Ripple targets large financial institutions exclusively, which is a big turn-off for individual enthusiasts who would like to adopt the coin early enough. One of Ripple’s founder, Jed McCaleb left Ripple to fork another cryptocurrency – Stellar, which targets individuals.
Lack of decentralization – Ripple Labs owns 60% of the total 100 billion XRPs on the network and network nodes are run by just a few banks.
XRP not required for transactions - Ripple customers can make use of the Ripple network and make financial transactions without the network token XRP
How to Buy Ripple
Nowadays, there are many marketplaces that offer the purchase of Ripple for US dollars, euros or pounds. Just follow these four steps to buy Ripple in no time:
- Find a cryptocurrency exchange
- Sign up for a cryptocurrency exchange
- Buy XRP using US dollars, euros or pounds
- Store XRP securely
1. Find a XRP exchange
You shouldn't just choose any cryptocurrency exchange. The below list outlines key factors which should influence your decision for a marketplace that suits your needs:
- User experience: the user interface and functionalities of many exchanges may be confusing at first. Nevertheless, an intuitive user interface helps you make better informed investment decisions and reduces the risk of unnecessary mistakes.
- Fee structure and rates: Trading fees as well as payment fees can range from as little as 0.1% per transaction to 10% per transaction and more. Hence, always look for a good trade-off between pricing and user-experience.
- Payment methods: make sure that your preferred cryptocurrency exchange offers payment methods that suit your wants and needs.
- Security & trust: make sure to choose a platform that follows security best practices. Read reviews by real users to learn more about the trustworthiness and support provided by the different marketplaces.
How to use Cryptoradar to find a cryptocurrency exchange
Cryptoradar helps you find a suitable cryptocurrency marketplace, providing you a comprehensive yet compact overview Ripple marketplaces.
Currently, Cryptoradar lists:
- 13 marketplaces that offer users XRP in exchange for US dollars
- 16 marketplaces that offers XRP in exchange for euros
- 5 marketplace that offers XRP in exchange for pounds
Make sure to use the filters on the left side of the website to narrow down your list based on your wants and needs.
2. Sign up for an exchange
Signing up to an exchange is actually one of the easiest parts of the process. Simply enter your personal details to get started.
After registration, however, you need to verify your identity. To do so, you will either be asked to upload identification documents to the marketplace (e.g. a copy of your passport and a recent utility bill as proof of residence), or you will be asked to jump on a short video chat with a support agent who will verify your details remotely.
3. Buy XRP using US dollars, euros or pounds
Finally, you're on the brink of making your first Ripple purchase! Yet, before you can actually buy cryptocurrency, you need to deposit money on the marketplace. This can either be done through bank transfer or instant payment methods like credit cards or Skrill.
Once your payment is received by the cryptocurrency exchange, you can go ahead and buy Ripple. This is actually the easiest part of the whole process. On most marketplaces it’s as easy as selecting the purchase amount (in US dollars, euros or pounds) and clicking the buy button.
4. Store XRP securely
Optionally, you can withdraw XRP after your purchase to a secure wallet that you manage. Keep in mind that you should not leave large amounts of cryptocurrencies on marketplaces as they are popular targets of hackers.