- 1 What is Ripple?
- 2 How Does Ripple Work?
- 3 Notable Ripple Backers, Investors, and Supporters
- 4 Why Invest in Ripple and How to Get XRP Coins?
- 5 Pros and Cons of Ripple
- 6 Cryptocurrencies Similar to XRP
- 7 The Best Places to Buy Ripple: XRP Brokers and Exchanges
- 8 XRP Price Overview
- 9 XRP Mining: How Do You Get Ripple?
- 10 XRP Wallets: How to Store Your Coins
- 11 Ripple vs Bitcoin
- 12 Ripple XRP FAQ
Now, it’s important to point out that Ripple and XRP aren’t officially connected. Ripple didn’t create nor does it control XRP. However, it is the only company to have built a platform based on XRP tokens. What’s more, it owns a majority share of XRP. Therefore, the two are often used interchangeably and that’s something we’re going to do in this guide (sorry crypto pedants!). So, if you want to learn more about Ripple, XRP and where they rank in the crypto investment sphere, make sure you read our expert overview.
How Does Ripple Work?
As we’ve already explained, Ripple wants to make it easier for institutions to send money anywhere in the world. It has already accomplished this goal and has become a new foundational technology for many international banks and fintech companies.
As for how Ripple works, we’re able to explain its fundamentals without getting too deep into the technical weeds. Let’s say you want to trade some British Pounds Sterling for Mexican Pesos. Normally, this would be performed through a circuitous process by your bank. Funds would be taken out of your account, and (in many cases) physical Pesos would be delivered to a local branch. The process would take days.
With Ripple, this process is greatly simplified. Banks hold large amounts of all major currencies and XRP is measured at variable exchange rates to each one. So, when you want Pesos, your bank would trade GBP for XRP. This XRP would be transferred to Mexico and immediately changed to their equivalent value in Pesos. Although this technology is aimed more towards banks dealing with large batches of transactions, it makes life easier for individuals too. What’s more, there are also possible applications for common people as well. This is what makes Ripple such an intriguing proposition in the crypto space.
Notable Ripple Backers, Investors, and Supporters
We’ve already listed Ripple founders Larsen and McCaleb, both of whom continue to be important voices in the realm of Ripple and cryptocurrency in general. Perhaps more importantly for Ripple today, though, is the list of banks and corporations which now use Ripple’s suite of products for their various financial services.
From the banking sector, we’ve currently got Santander, PNC Bank, the Royal Bank of Canada, and a growing list of other international enterprises. Ripple is also used by Western Union and MoneyGram (through a partnership with none other than Wal-Mart). Finally, major traders such as hedge fund manager Ray Dalio have also backed Ripple.
Pros and Cons of Ripple
As we’ve discussed, the biggest strength of Ripple is its affiliation with major banks. However, there are some other pros and cons you need to consider before you invest:
XRP is extremely cheap compared to Bitcoin and altcoins.
Ripple is proven in a commercial/financial environment. Tests involving xCurrent and xRapid have already been successful, showing that Ripple can be effective in a real-world setting.
Ripple is improving. To ensure it has the capacity to process the same number of transactions as Visa et al, developers are constantly upgrading Ripple. At present, it can handle 1,500 transactions per second, but this will improve, making it a major rival for more established systems.
Some people argue that XRP isn’t a fully decentralised crypto because Ripple owns a majority share of the tokens, and that gives it a certain degree of control.
Ripple already has a high market cap which could make growth harder (i.e. it’s tough to see huge gains when you’re already a big company). Therefore, it may take a major innovation to see a real price surge.
Cryptocurrencies Similar to XRP
One of the closest cryptocurrencies to XRP in terms of technology is Stellar Lumens (XLM). Like Ripple, Stellar allows two parties to exchange one currency for another. Basically, XLM is used to pay transactions fees on the Stellar network.
Through this mechanism, a bank can send money to a bank in another country and use XLM to cover the fees. By doing this, the original currency is essentially converted into XLM. To put it another way, XLM acts as an intermediary that carries currencies from one bank to another.
Although Stellar performs a similar job to Ripple, it can’t quite match it in terms of speed. What’s more, it doesn’t have as many high profile partners, meaning that it’s not as visible in a commercial setting.
XRP Price Overview
The price of Ripple has remained fairly consistent in recent times. During the crypto boom of 2017, it followed the trend and hit highs of $3+. However, if we exclude that period of time where all valuations were spiralling out of control, XRP has remained relatively stable at >$1 per coin. At the start of 2019, XRP price charts had the coin floating around the $0.30 mark.
At that level, there’s plenty of potential for growth. Even if we exclude the fact all cryptos boomed in 2017, Ripple has already been 10x higher than was at the start of 2019. As more banks utilise this technology, there’s no reason it can’t reach those highs again.
XRP Mining: How Do You Get Ripple?
Unlike other cryptos, you can’t mine XRP. Each token is created by the institutions connected to the network. These tokens are then used for each specific transaction, meaning they can only be used once. Because of that, mining Ripple on an individual basis isn’t possible. Fortunately, you can buy Ripple. Because a certain number of coins have been distributed, they’re now available on exchanges.
XRP Wallets: How to Store Your Coins
Storing XRP tokens in an exchange is the easiest way to access your coins. If you’re looking for a safer option, there are plenty of XRP wallets you can use. One thing that’s important to note, however, is that all Ripple wallets require a holding balance of 20 XRP.
For a hot solution (i.e. one that’s based online), software and mobile crypto wallets such as Toast are great. For a desktop solution, Rippex and Cryptonator give you safe, cost-effective storage space. Finally, for the most secure solution, an offline (cold) wallet such as the Ledger Nano S is perfect.
Ripple XRP FAQ
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