What is Ripple and How To Buy It
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Ripple remains one of the most popular cryptocurrencies worldwide, and it’s one that many people have invested in as well. Although investing doesn’t always guarantee profits and can be risky, investing in crypto can also be very rewarding- especially if you know what you’re doing.
That’s why in this guide we’ll explain to you all you need to know about Ripple including what it is and how it works.
We’ll then take a look at how you can invest in Ripple and ways of doing it. By the end of this guide, you’ll know exactly how to invest in Ripple and why it’s earned its place as a leading digital currency.
Let’s get started!
What is Ripple
Ripple was launched back in 2012, and Ripple is the company behind the creation of their XRP crypto-coin. Although the coin is called XRP, many people refer to it as Ripple and the name is interchangeable – even if this is really the company name. (For this guide we will be using both names for the crypto.)
Currently in terms of market capitalization, XRP is the 3rd largest cryptocurrency. Ahead of it is Ethereum in second place and Bitcoin in position number one. However 3rd position is still impressive and goes to show how well XRP has done, especially when there is a lot of rival coins out there.
Besides the cryptocurrency though, Ripple is also a platform that provides software ‘inspired’ by blockchain technology. With its software the company is aiming to completely change how people transfer money. They want to make it possible to send money to anywhere round the world instantly, and also for near zero fees.
That’s why they’ve now partnered with many major banks, like American Express and Santander for example, so that banks can try out Ripple’s technology and improve transaction processes.
This the main reason why the company launched XRP, (because besides it being a crypto), Ripple uses it as a ‘connecting’ currency for when transferring money abroad. For example imagine you live in the USA and you want to send money to your friend in Germany, normally it would take 3-5 business days for the money to arrive plus a high fee.
Ripple intends to make the process easier by connecting and converting $ USD to XRP, which is then converted to € EUR. This all happens instantly too, so like that you’d be able to transfer money without any exchange fees and immediately.
This is why Ripple created and continues to develop XRP as it’s so important for the whole project.
How Does Ripple Work
Now that you know a bit what XRP/Ripple is all about, let’s take a look at how the coin actually operates and what makes it different from the others.
First let’s take a look at the similarities between Ripple and the other cryptos. Essentially when it comes to the network structure and technology, XRP is very similar to Litecoin and Bitcoin, as it is based on the same configuration.
Besides this similarity though, Ripple has many differences, especially it’s speed rate.Speed is a key feature that makes XRP stand out from its rivals. When compared to Bitcoin and Ethereum, Ripple is much faster at transactions than both of them. Besides the speed element, all transactions are made whilst keeping a high level of security.
On average a XRP transactions takes just 3.5 seconds to complete, whereas a Bitcoin transaction can take hours or even longer depending on trade volume!
As we’ve already mentioned briefly, its this transaction speed feature which has caught the attention of banks and other important institutions. Mainly because this could really change the future of money transactions both for business and personal use.
Another difference is how XRP was created. Most crypto coins are ‘mined’ or created by miners, like in the case for Bitcoin. However, for XRP all the ‘coins’ were created at the same time which is all known as pre-mining. This means that there is no need to have miners or to waste energy to operate the mining hardware.
One other point which makes XRP quite unique from other cryptocurrencies is that it was developed by a private company – (Ripple), for profit reasons. Which is very different to the other cryptos which are generally open-sourced.
The fact that the company also owns about 60% of the supply of XRP coins has also raised questions of whether the crypto can be considered decentralized. It’s a very different setup to Bitcoin which is not company owned and it based on a very open, decentralized concept, where anyone can mine Bitcoin and own it.
Before making any kind of investment it’s worth knowing the price history of the asset that you’re interested in first.
Since the coins launch the growth has been fairly steady and the price low, until it reached its peak price of $3,32 in January 2018. Then due to the general crypto market volatility of 2018, the price fell sharply from $1 down to 26 cents by July 2018.
Towards the end of 2018, prices did appear to recover a bit and again reached 52 cent in September. Since then and especially from March 2019 onward, XRP has been around 30 cents and has experienced many price changes.
When looking the at the charts from CoinMarketCap you can see that the price was affected by the Bitcoin price increase in June, when prices went up to 46 cent around the time the BTC price spike happened. It then dipped again and at the time of writing this guide (August 2019) one XRP coin is worth about 27 cent. Quite a decrease from previous months.
However, certain analysts still believe that Ripple’s price will move in a better direction for the future. This is down to the fact that the XRP system has had recent upgrades made to its system, also the fact that Ripple continues to develop partnerships with banks might help to push the coin value up more.
Of course, it’s always hard to guess the future price of cryptocurrencies due to the market being so volatile. Hopefully with the business developments on Ripples side plus the system upgrades, the XRP price will recover.
It’s possible the XRP can reach again a price of between $0,75 to $1 for the end of 2019. We’ll just have to wait for the latest news announcements from the company and see how the market reacts.
Why Invest in Ripple
There are few reasons why it might be worth investing in XRP. Firstly it’s true that the coin can’t be considered a ‘traditional’ digital currency, because both the coin and the company offers a lot more besides that. As we’ve already looked at the fact that Ripple is a private company looking to revolutionise the world of transactions with its network.
It’s likely that it will soon change the way we send and receive payments, as well as change how business is conducted round the world. It’s also likely that Ripple’s developers will create something more than just transferring money in the future. Imagine Ripple’s technology could be used to exchange or send anything. This could be done by simply creating a secured pathway with which things could be exchanged.
All this technology and investment from banks shows that it’s likely that Ripple will continue to develop well into the future, whether the banks will also adopt the XRP coin is another question. However, it seems likely that the value of both the company and XRP will increase whilst the technology is adopted by more major financial customers.
Another reason why it might be worth investing in Ripple is because the coin price is one of the lowest on the market. It’s not often that a coin’s value is less than a $1, which is the case of XRP at the moment. This could be a good investment as it could be worth investing in XRP whilst it’s cheap and then wait for the price to increase. This might suit you especially if you’re looking for a long term investment.
Of course the low value of XRP doesn’t guarantee that the value of the currency will increase, but that’s the risk you take when investing, However with so much outside investment in Ripple and a strong team behind the project the future of Ripple looks positive.
How to Buy Ripple
In order to invest in Ripple, there are 2 ways you can do it – you can either buy or trade.
Both options are very different but both are good ways for investing. Let’s take a look at buying first. When you purchase any digital currency such as XRP or BTC, you fully own it. You can do what ever you like with it – for instance sell it, convert it or store it in a ‘wallet’.
Buying also means that if the price of XRP goes up, you make a profit from your investment. On the other side though if the coins value drops below what you paid for it, then you’ve made a loss.
Trading is the other investing option where you can decide to do. It’s important to remember though that with trading, you do not own the crypto. Instead you are simply trading on XRP’s price movement. To get started you’ll need a trading account with an online broker, from there you can manage and view your trades. All brokers will offer crypto trading as a CFD (Contract for Difference). CFDs mimic the real life price behaviour of a financial instrument such as cryptocurrencies or commodities like oil and gold.
To get started trading you need to analyse Ripple’s price and recent market behaviour. Based on that you can decide whether you want to base your trade on ‘buy’ or ‘sell’. Selecting buy means that you think the XRP value will go up and to sell means that you believe the value will go down. If your trading decision matches the actual market performance of XRP then you make a profit on your trade.
This is why sometimes trading can be considered better than just buying. Because it’s possible to make a profit even if the value of XRP drops.
It’s very much a personal choice of what option suits you better. Let’s take a look now at where you can buy and trade Ripple from.
Where to Buy Ripple
There are many options to choose from when it comes to investing in Ripple. You just have to decide whether you want to buy XRP coins, or if you want to trade instead. This is up to you and which option suits you better. But let’s take a quick look at buying XRP.
To buy Ripple, the options include using a crypto-exchange such as Coinbase, or with an online crypto wallet like eToro X. Because XRP is such a large digital currency most crypto-exchanges offer it for sale, however with Coinbase it’s possible to make the purchase with your debit card or bank account. It’s also possible to buy in small amounts with them, the current minimum purchase is just $25.
Another option for buying is the eToro X wallet. eToro is already a leading online broker, but last year they launched a standalone crypto wallet app – eToro X. The app is available for Android and iOS devices, and of course you can access the wallet online via the official website.
One bonus of using the eToro wallet is that besides it being secure and regulated, you can also send and receive XRP from the app. It’s also possible to store many types of coins in the wallet and convert them to different digital currencies. Like Coinbase, you can also make your purchase with a credit card.
Currently a provider called Simplex is managing all credit card purchases for eToro X, but currently the only currencies being supported are € EUR and £ GBP – not $ USD. Although this is likely to be changed in the foreseeable future.
To get started with eToroX, download the eToro wallet app and register for an account. If you’re already an existing eToro user though, simply login with your details. You’ll then need to verify your account and the customer support team will let you know what they need for this, but usually a proof of address and identity is needed.
One the verification is complete you’ll be able to log in to your eToroX wallet using your login credentials. Then simply search for XRP and follow the steps to make your purchase. Once you have bought Ripple, you’ll be given a private key from eToro, as well as a unique blockchain address. These are needed to make sure your wallet is secure against hacking threats.
If you wish to trade on the price of Ripple instead you will need to find yourself a regulated online broker to set up an account with. It’s very important that you only use regulated brokers as they are monitored by official financial authorities to ensure that legislation is followed. For example in Europe CySEC and the FCA are two of the leading regulation bodies who licence brokers.
One broker platform that we would highly recommend though is BD Swiss. They are a fully regulated broker that has a very user-friendly platform. Besides the online platform they also have a free trading app which is available for iOS and Android devices.
BD Swiss also offers a very low spread and zero commission on trades to its members. The low spread feature is very important because it lets you trade ripple as a CFD for a price which is very near to the real XRP price. This will help you keep your trading accurate.
To open a trading account with BD Swiss simply register for an account with the broker. During the account creation you’ll need to provide your name info, email address and set up a password.
Once the account is open you will need to have your account verified. This is for security reasons and all regulated brokers are required to do it to prevent fraud. The customer support team will ask you to provide 2 documents showing your proof of address and identity. Once the account is verified, you’ll just need to deposit funds to your account so you can trade.
To start trading Ripple, simply search for XRP in the search bar or under the asset category. When you have found the Ripple page you’ll be able to see the latest XRP price history and charts. There will also be the ‘buy’ and ‘sell’ buttons. Decide on which one you want to choose and click the button to open the order confirmation window. From here you can select the amount of money you wish to invest plus the stop loss price, follow the steps to confirm the trade order.
Investing in Ripple
If you’re ready to make an investment in Ripple or you’re considering to do so in the future then it’s worth having an investment plan.
An investment plan will always help you to stay on track with your activity and to invest wisely.
That’s why we would suggest that you consider these 3 key points:
- How much money do you plan to invest in XRP and do you have a budget in place?
- Which option to invest suits you better- trading or buying XRP?
- Are you looking for a short or long-term investment?
All these points are important because it’ll help you to plan better and not overspend your funds. Cryptocurrency is a volatile market so there’s not any guarantee that you will make a profit. That’s why it’s important that you can only invest an amount which you can afford to lose.
This is important because you need to make sure that you don’t go over budget and that you can afford to risk the money. Like any investment, there is no 100% guarantee that you’ll make a profit, so you need to make sure that your finances can afford it.
You also need to consider whether trading is the right option for you, or if it’s better to buy. Now you know that there are differences between the two you can see what option you prefer.
Regarding the long-term vs short-term investment this is also something worth considering, as it might also help you decide whether you want to trade or just buy Ripple.
Usually a long-term investment is anything over a year whilst a short-term investment can be anything from a few days to months. For example buying XRP might suit you better if you wish to have a long-term investment because you can buy the coins and hold onto them for over a year to see how the price changes.
Trading might suit you better if you’re looking for a short-term investment as trading generally is quite a quick process time wise.
It’s very important that you do what’s right for you and by considering all of these options you’ll have a better idea of how you want to invest.
Based on the setup of Ripple, it’s not possible to mine XRP coins. This is because the only people who can produce XRP are the same people who created it.
Ripple has decided to release about 100 billion XRP coins so far, and they still hold on to around 60% of the digital currency which is kept in a ledger. The management, can if they wish, release up to one billion XRP coins each month but so far the actual rate is much less.
Any unused coins from that months balance are automatically rolled over to a new ledger escrow account which will be released at a later time. By controlling the release of the XRP supply, it can help prevent the market from being flooded with XRP coins which would affect the price negatively.