- 1 What is Ripple (XRP)?
- 2 How does Ripple (XRP) work?
- 3 How can Ripple help financial institutions e.g. banks?
- 4 Who created Ripple? Who owns Ripple?
- 5 The difference between Ripple and Bitcoin
- 6 Where to Buy Ripple (XRP)?
- 7 Is Ripple a good Investment?
- 8 Should I buy Ripple?
- 9 Can Ripple be mined? How to mine Ripple (XRP)?
- 10 Why is Ripple’s price so low?
- 11 Where to store Ripple (XRP)?
- 12 Which Ripple (XRP) wallet is the best?
What is Ripple (XRP)?
Ripple is both a virtual currency and an open payment settlement system that connects financial institutions to enable real time transactions across international borders. It is built on the blockchain using an open source protocol making it decentralized and providing a permanent and immutable record of all transactions on a distributed ledger.
It provides alternative to the existing bank transfer and transaction settlement systems. The system allows for fund transfers to be executed in seconds regardless of the currency used or countries involved. This is in great contrast to the current legacy infrastructure that takes between three to five days for settlements. It is also cheaper and has a much lower failure rate.
How does Ripple (XRP) work?
The Ripple currency, XRP, works as a bridge connecting different currencies from all over the world. Every legacy payment system provider currently has their own network that is incompatible with the others. The Ripple system links these different systems to allow seamless transactions.
Unlike most other cryptocurrencies, Ripple does not have a public blockchain. Its ledger operates on an internal blockchain that is referred to as an enterprise blockchain. This ledger also differs from others since it does not use the common proof-of-work algorithm for consensus.
Its retail participants do not have access to this blockchain and its nodes are registered operators on the network as opposed to individuals. This closed system makes it efficient and above manipulation.
How can Ripple help financial institutions e.g. banks?
There are already a number of banks that have embraced the Ripple model due to its numerous benefits. One of the foremost of these is that the platform allows them to enjoy reasonable cost-reductions on each transfer executed. Considering that such institutions carry out millions of transactions annually, this leads to a significant amount of savings.
Its global reach as well as the speed of transactions also makes Ripple popular as these features allow for real time transactions. This makes it possible for such institutions to access new markets and gain higher popularity with their customers.
They also enjoy the advantage of using the network’s native token XRP to source liquidity as need arises without having to fund the relevant accounts in advance.
Who created Ripple? Who owns Ripple?
Ripple was co-founded by an American programmer known as Jed McCaleb, its current CTO, together with Chris Larsen, the CEO. McCaleb is also the founder of Stellar, another blockchain model as well as the Mt. Gox exchange platform. Larsen on the other hand is also a co-founder of E-LOAN, an online financial firm.
These two founders worked together with a team that had a strong background in digital currencies. Together, they created a first-of-a-kind currency that had a function beyond the traditional medium of exchange role.
The company behind the project is known as OpenCoin. It has received a lot of backing from well-known venture capitalists like Vast Ventures and Andreessen Horowitz among others.
The difference between Ripple and Bitcoin
Even though both Ripple and bitcoin are built on the blockchain technology, they differ significantly in a number of ways. First, the purposes for which these two networks were intended vary significantly. While bitcoin was designed to serve as a peer-to-peer crypto protocol, Ripple was built to facilitate payments and currency exchange on a global scale.
Additionally, bitcoins come into existence through a mining process while all the Ripples that will ever exist are created by one central authority. Trading in bitcoin requires the use of centralized exchange platforms but in the case of XRP, all purchases and sales are made within the network.
Ripple transactions are very fast as they take only four seconds while BTC takes more than an hour. Its design also allows for massive scalability with a network that can process up to 1,500 transactions every second. BTC only does between three and six transactions per second.
Where to Buy Ripple (XRP)?
There is no platform that allows you to buy Ripple directly. This means that you need to buy either BTC or ETH and convert it to XRP. The best place to do this would be on an exchange platform. The platform you use will depend on your location and preference. On most of them, you will be required to go through a registration process before making the purchase.
The Coinbase exchange site registration process is a bit rigorous and involves email verification, uploading a photo and adding your payment details. But it is easy to use for beginners. More experienced buyers could opt for Binance whose registration process is simpler.
After completing the process, verification will usually take a few minutes and then you will be able to make the desired purchase. After the purchase, you may proceed to Changelly to swap your BTC or ETH for XRP.
Is Ripple a good Investment?
Ripple is a good investment because it goes beyond the traditional digital currency model and offers solid ground for investors. First, the model seeks to solve a major pain point for customers around the globe as it offers an upgrade to the current inefficient money transfer systems. And the fact that the concept can apply to any other item above and beyond currency guarantees success for the idea.
Another strong point in the Ripple model is the fact that it complements the traditional banking system whereas many other crypto models are fighting to overthrow the incumbents. The truth of the matter is that it is almost impossible to get rid of traditional institutions overnight. A model that is perceived as offering support and upgrade to the legacy institutions has a better chance of survival than those fighting to topple them.
Should I buy Ripple?
Ripple seems to be a good choice for someone looking to buy cryptocurrencies. It has already been adopted for use by dozens of mainstream financial institutions. This widespread adoption is bound to have a positive impact on the price of the token in the long run. This would mean that buying it at the current price could turn a neat profit within a short span of time.
The differences between Ripple and the regular crypto model also make it a good choice for purchase. This is because it has some inherent qualities that shield its currency from the volatility common in most of the popular digital coins.
The current XRP price is another reason you should consider buying it now while it is still within reach and hold it as it gradually rises in value.
Can Ripple be mined? How to mine Ripple (XRP)?
Ripple cannot be mined. It can only be purchased from an exchange platform. All of the 100 billion Ripple coins that are intended to get into circulation are created by Ripple labs and supplied into the market.
In the same vein, Ripple transactions do not require miners to validate them and add them to a blockchain. Rather, they are powered using a central blockchain and this makes the network both reliable and fast as compared to most others.
Even though mining is core to a majority of digital currencies, Ripple has defied all odds and set itself apart from the rest. Its model shuns the concept of having a group of people who require incentivization so as to run the network.
Since the solution is built for big banks it cannot afford the problem of slowness, a major issue on the fully decentralized models.
Why is Ripple’s price so low?
One of the key reasons why Ripple price is low is the massive supply of coins. There will eventually be a total of 100 billion Ripples in circulation. Scarcity is usually the key driver behind the value of currencies. Looking at bitcoin as an example, its total market capitalization is 21 million BTC. This is a major reason why BTC value is so high and Ripple price is so low.
But the concept offers some unique benefits that are not present on other models. The finite number of tokens that are created and released into the market according to demand reduce the volatility that is present on most other cryptocurrencies and make XRP relatively stable.
This makes it a reliable medium of exchange and the payment processing role that is at the core of the model.
Where to store Ripple (XRP)?
The best storage for your XRP is one that will guarantee security as well as ease of access. It is advisable to avoid storing your coins on an exchange platform. The best storage place is a cryptocurrency wallet which is basically a place where the private keys to your personal address are securely stored.
There are desktop wallets that allow you to download and install specific software and have it accessible on your desktop. The only downside to this is that it takes up space on your hard drive. Another option is a mobile wallet that allows you to keep your keys in an app on your phone.
Online wallets offer storage facilities on web browsers but are less secure due to cybercrime. Hardware wallets are small devices that offer portable storage for your keys and while they are very secure, they are also quite costly.
Which Ripple (XRP) wallet is the best?
An important point to note before we get into the details is the fact that XRP wallets require a deposit of 20 XRP for wallet address booking. This would mean that choosing the right wallet is important so that you do not lose the 20 XRP repeatedly while shifting between wallets.
You have the option of going for a hardware wallet if you are keen on security as well as ease of access. Ledger Nano S is one of the best for XRP as it also supports a number of other popular cryptocurrencies.
Toast Wallet is another XRP wallet that is software-based and non-hosted meaning that you retain total control of your keys at all times. It is available for Android, Windows, iOS and MacOS.