This concise article will give you all you need to know about ripple. What it is, why major banks across the world are using it and how you can invest in ripple with the minimum of effort. It is an informative guide for you to learn more about ripple without having to do the huge amount of research needed to make an informed decision of your own. The information is NOT meant as financial advice, nor to encourage or dissuade you from investing in ripple. The step by step guide is easy to follow and contains links for further reading and taking action. I recommend you right click on the links to open pages in a new tab on your computer or device so you can keep reading without losing your place. The trademarks used in this publication are for clarification and recognition purposes and used under the Creative Commons copyright license agreement.
What is Ripple & How Can I Buy Some?
Ripple is an internet protocol for financial transactions. It uses a shared
ledger to track balances among parties, regardless of their geographical
location. This allows each payment to clear in seconds rather than days.
It also makes it possible for a person who uses one currency to
seamlessly pay a person who uses a different currency, making it easy
to transfer nearly any currency to anyone in the world in just seconds.
The Ripple platform makes the archaic system of sending money
through SWIFT or Western Union obsolete and is being used by
individuals and businesses who want faster and easier ways of
managing their funds.
Consider this hypothetical example. Directly transferring currency
inexpensively from Japan to Nicaragua, JPY/NIO isn’t generally feasible.
Instead, an individual or bank will usually trade JPY to USD and then
USD to NIO.
At each step, the fees add up, making for an expensive way to send
money internationally. By using Ripple, one can trade JPY to XRP
(Ripple’s currency) relatively inexpensively, send XRP to the recipient,
either an individual who has a Ripple wallet or a bank in Nicaragua, and
from there, trade XRP into NIO. In other words, XRP is the grease that
allows any currency to be easily exchanged for any other currency on
the Ripple platform.
There is no doubt that real time worldwide payments are the future. The
Ripple platform gives banks a huge advantage both over their
competition and financially.
How Does It Work?
The Ripple network is, at its core, a shared public database. This
database includes a ledger, which serves to track accounts and the
balances associated with them. Ripple supports any currency and gives
users complete freedom to transact in their chosen currency. A user can
hold balances in one currency and send payments in another; the ripple
network takes care of the conversion on the fly.
What is a Ripple Gateway?
A Ripple gateway is a bridge between the Ripple network, a FIAT
currency, and other virtual currencies. It enables customers to do three
things:
● Deposit funds in exchange for a balance issued by that gateway.
● Transfer their balance to another customer of the gateway.
● Withdraw funds by redeeming a balance issued by that gateway
Why Are Banks Using Ripple?
A few banks have embraced the Ripple platform including, Santander,
Axis Bank, Yes Bank, Westpac, Union Credit, NBAD, and UBS, among
others. According to Ripple, banks can save an average of $3.76 per
payment by using their protocol. Considering that banks perform
thousands or perhaps millions of transactions every year, this represents
a significant savings.
If there is one thing that captures the attention of banks, it is how to
make more money, while saving more money. This is why Ripple, or a
real time, inexpensive, global settlement network similar to it, has a
bright future ahead of it, as they are offering a new way to conduct
business that brings financial institutions up to speed in the Internet age.
If people and banks from around the world turn their fiat into XRP and
collectively decide not to move back into fiat, the price of XRP will no
doubt skyrocket.
How to Buy Ripple in Simple Steps
Get a Ripple (XRP) wallet
Gatehub is an exchange that supports XRP. First, sign into GateHub
and go through their KYC process. GateHub accepts SEPA transfers
and bank transfers, although there is a $15 fee for bank transfers.
After receiving USD or EUR, it can be traded for XRP on the GateHub
trading platform or ‘gateway’. Ripple Gateways are businesses that
provide a way for money and other forms of value to move in and out of
the Ripple network. Gateways can be banks, money service businesses,
currency exchanges, or any other financial institution.
https://signin.gatehub.net/signup
(Right click and open in a new tab)
The main thing to note when using a wallet to store XRP is to write
down the secret key and store it in a secure location offline.
Better yet, write down the secure key many times and store it in many
secure locations. This secret key will give users access to their wallet no
matter what. XRP wallets generally operate the same as Bitcoin wallets.
Store Recovery Key to a SAFE PLACE. In case you ever forget your
GateHub password this is the ONLY way to recover your funds.
Confirm Your Email
After you stored Recovery Key activate your GateHub account by
clicking Activate account button in the email you received.
Sign in with your email and password.
Verify Your Account
Type in your phone number and click Confirm. Enter 4 digit verification
PIN you received via SMS and click Verify. Click Continue after phone
number has been successfully verified. Follow the instructions and
complete all 5 steps before connecting a gateway.
NOTE: You can skip steps 2, 3, 4 and 5 by clicking Skip, I'll do this later.
When depositing a cryptocurrency (such as BTC, ETH, ETC or REP)
GateHub doesn’t require full identity verification.
Connect a Gateway
Before making a deposit you have to connect a gateway. On the Home
page click Connect a Gateway. Select a Currency (EUR) and click
Confirm. You will receive an email once gateway confirms your account.
Deposit Funds
After the gateway confirmed your account you can make a deposit by
clicking Deposit / Receive button. To deposit EUR select EU BANK tab.
Go to your bank and deposit any amount using the information provided
on the deposit screen. You will receive an email when deposit has been
received.
Buy Ripple (XRP)
Once your wallet has been funded you can buy XRP using Exchange
page. Select EUR in the left dropdown menu and XRP in the right. Type
EUR amount you would like to spend and click Exchange EUR to XRP.
It should be noted that every Ripple wallet must initially be funded with a
20 XRP reserve in order to protect against low level spam attacks
Need More Help?
For more information, see GateHub’s Help page.
If you have questions, you can send an email to support@gatehub.net
for additional information.
Withdraw XRP to Your Wallet
I don’t recommend leaving your XRP on the exchange you bought them
from. This is due to the fact that you don’t actually control the private key
for your coins and therefore they are not actually yours.
No matter where you got the coins from remember to withdraw them into
your own Ripple wallet that you hold the private keys to. Once the
transaction is confirmed you’ve successfully finished the process of
buying Ripple.
Hardware, Desktop and Paper Wallets
For top security it is best to keep your XRP on a hardware wallet for
maximum security. Ledger Nano S is currently the most reliable
hardware wallet for storing XRP and a number of other cryptocurrencies
Rippex offers a desktop wallet for Mac, Windows, and Linux that gives
users full functionality. Here is a guide to setting up the Rippex desktop
https://cryptorum.com/threads/rippex-guide-for-storing-ripple-xrp.89/
wallet and sending XRP there for storage or trading.
A paper wallet is a very simple way to store your bitcoin for the long run.
The paper wallet is good for non-tech people and is a very robust offline
way to store your coins. If you put the paper wallet in a plastic bag and in
a safe nothing can happen to it. Get a paper wallet at BitAddress.org.
At the current time, there doesn’t appear to be any highly rated mobile
wallets for XRP so I can’t recommend any of the options available. I am
sure that will change relatively soon.
Alternative Ripple Exchanges
There are several options for buying Ripple today. You can either buy it
with fiat currency (i.e. USD, EUR, etc.) or you can trade Bitcoins for
Ripple on specific exchanges.
Buy Ripple With Fiat Currency
The best way to buy Ripple for people who don’t already own Bitcoin is
to purchase it directly through a wire transfer or a credit card through
Gatehub or Litebit.
Bitstamp is another exchange that supports XRP. After signing up and
following their KYC (Know Your Customer) procedure, it is easy to send
EUR through a SEPA transfer or USD by a bank transfer. As soon as
the transfer clears, fiat currency can be traded for XRP directly on their
exchange
Bitstamp also allows people to move funds onto the platform with a
credit card payment or trade Bitcoin directly for XRP. Here are more
details on using Bitstamp to purchase XRP
Buy Ripple with Bitcoin (trade BTC for XRP)
Throughout the Ripple community, the consensus is that the least
expensive way to purchase XRP is by uying bitcoin from Coinbase or
another provider first. Then, bitcoin can be sent to any number of
exchanges and traded for XRP.
The easiest way to trade Bitcoin for XRP is by quickly exchanging it on
Changelly or Shapeshift.
Kraken is another popular exchange that allows users to trade bitcoin for
XRP. XRP can also be purchased with bitcoin by trading it on Poloniex,
and Bittrex, among other exchanges.
Japanese customers can use Coincheck or Bitbank to buy XRP.
Individuals located in Mexico can use Bitso to buy XRP.
Customers located in South Korea can use Coinone or Korebit to
purchase XRP.
Invest in Ripple via a Trading Fund
Platforms like eToro don’t give you actual access to your coins and you
can’t send coins from eToro to other people. The only thing that can be
done with the platform is to buy and sell Ripple for fiat currency (i.e.
Dollars, Euros, etc.). Meaning this platform is good if you only want to
speculate on the price.
The Rise of Ripple
XRP, Ripple’s native currency, took off in value in 2017 when it went from
under $0.01 to over $0.30 a coin. This huge surge in value is due to
both bank adoption and speculative interest.
As it currently stands, Ripple has the third highest market cap behind
Bitcoin and Ethereum.
XRP allows for seamless financial transactions from any given currency
to any other currency with negligible fees. In a sense, XRP is the
reserve currency on the Ripple platform that enables users to trade
nearly any currency of choice into XRP and send XRP globally to
anyone. The individual who receives XRP can then trade it for the
currency of their choice.
Every time any given currency is traded into XRP, liquidity increases, as
does the value of XRP, due to greater demand. In other words, Ripple is
attempting to turn XRP into a global reserve currency of such even
though it may not seem that way just yet.
However, transferring XRP is the easiest and least expensive way to
send value over the Ripple protocol. At some point, it may not make
sense to move into any other currency, while instead, simply using XRP
exclusively for global payments.
Is bit coinIf people and banks from around the world turn their fiat into
XRP and collectively decide not to move back into fiat, the price of XRP
will no doubt skyrocket.
The goal is to turn XRP into a stable currency that doesn’t deviate in
value much so banks would be comfortable moving into it without fear of
volatility. As it stands, many banks don’t want anything to do with XRP
because it can dramatically change in value overnight or even in
seconds. In order to assist banks and payment providers Ripple has
partnered with BitGo to mediate these risks so expect further bank
adoption relatively soon.
A long-term appreciation in the value of XRP is ultimately the end game
strategy for Ripple, as they hold the majority of XRP in existence. This
means that a bet on XRP is a bet on Ripple. It should be noted that
Ripple also offers consulting services to financial institutions and has no
problem securing funding when needed. In other words, it looks like
Ripple is likely to be around for a long time.
How Many XRP (Ripple coins) Exist?
Of the 100 billion XRP tokens in existence, Ripple holds 61 billion of
them. With the company holding the majority of the coins. In order to
build investor confidence, Ripple has locked up 55 billion XRP with 55
smart contracts. One by one, each contract, holding 1 billion XRP,
expires monthly throughout the course of 54 months.
As it currently stands, Ripple has spent about 300 million XRP a month
for the past 18 months to handle expenses. This operational
transparency should give skeptical investors a reason to believe that
Ripple is in this game long-term and would not benefit by selling off their
holdings, thus plummeting the value of XRP.
What Are The Advantages Of Ripple?
There are a number of advantages that XRP has over other
cryptocurrencies, most notably, Ripple is working directly with banks.
While anyone opposed to the banking cartel monopoly may not want to
invest in Ripple on principle alone, there is no doubt that Ripple is
focused on smart business decisions by making ties with the very
corporations that control global finance.
Investors who want to capitalize on the hard work Ripple is dedicating to
their global settlement network are likely to witness a steady increase in
value over the long term by simply holding XRP. Simply put, buying XRP
and forgetting about it could result in 10x or even 100x gains over the
long-term.
Ripple is fast, with transactions confirming in under four seconds. In
other words, it can be used to purchase everyday items, assuming that it
is adopted by both merchants and users worldwide. In addition, Ripple
is scalable, as it regularly handles 1,000 transactions a second. It has
even been shown to handle as many transactions as Visa, more than
50,000 transactions a second.
What Advantages Does Ripple Have Over Bitcoin?
Bitcoin is great, but it isn’t a fast way to exchange value, while Ripple is.
In addition, the cost to send bitcoin has increased significantly as more
and more transactions are taking place on the blockchain, while
transferring XRP is still relatively inexpensive. In addition, the Ripple
network doesn’t get bogged down by transactions like bitcoin currently
does.
The original goal of Ripple was to develop a platform that didn’t consume
huge amounts of electricity like the process of mining bitcoin. In order
avoid mining entirely, all 100 billion XRP were “instamined” that
inherently has drawbacks to anyone who appreciates the benefits of
mining.
Many argue that Ripple is centralized, but the company is working hard
to change that. Ripple is becoming increasingly decentralized through
validator node diversity on the Ripple Consensus Ledger (RCL). In fact,
Ripple argues that it is more decentralized than bitcoin at this point in
time.
One of the biggest advantages, at least from an investor’s standpoint, is
that Ripple is making connections with the banks around the world, while
many see bitcoin and other cryptocurrencies as competition to the
established financial order.
In other words, banks are far more likely to embrace a protocol like
Ripple and its native currency XRP, rather than support bitcoin.
What Are Some Drawbacks To Ripple?
While XRP has some huge advantages over other cryptocurrencies,
some would argue that it is a big brother platform for making global
transactions. Since the original vision of Ripple was focused on allowing
everyday people to make global transactions, like remittance payments,
inexpensively and quickly, the pivot to focusing exclusively on banks was
seen as a turnoff by many. Anyone who likes the Ripple platform, but
doesn’t like Ripple the company may want to use Stellar, a Ripple fork
from Jed McCaleb, as it has more of an altruistic vision.
As stated before, XRP was created all at once and Ripple owns the
greater majority of these tokens. Even though these coins are locked up
in a smart contract and the likelihood of a sell off is small, it is still
something to consider. In a sense, Ripple is the central bank of XRP.
Researchers at Purdue University have determined that the Ripple
platform has security vulnerabilities. Due to its open nature, nodes
within the network could be subject to attack, preventing some users
from accessing funds.
Many people may decide not to invest in XRP for personal reasons,
especially if they are invested in cryptocurrency because they see
cryptocurrency as an escape from the banking cartel and government
control.
On the other hand, investors who are looking for profits and don’t see
anything wrong with Ripple’s business model have every reason to buy
XRP.
Is Ripple Worth Investing In?
Ripple will probably appeal to larger banks throughout the next couple
years, as they offer a global settlement network that enables real time
payments internationally, while reducing transaction fees.
Anyone who purchases the innate digital asset, XRP, has the potential to
earn huge returns on their investment, if Ripple keeps making headway
throughout the banking sector. The concept of XRP becoming an
established global reserve currency is an ideal scenario for investors.
Even though XRP has increased in value significantly in 2017, I believe
this is just the beginning of its ascent. However, as always, were there is
great reward there is also great risk involved.
Please make sure to invest responsibly.
