Ripple is famed as a payments network running on blockchain technology. Ripple’s native token, XRP, is among the top ten largest cryptocurrencies in the market by market capitalization. When people buy Ripple (XRP), they join one of the fastest-growing projects in the burgeoning blockchain industry.
In the Bitcoin whitepaper, Satoshi Nakamoto had much hope for the potential of blockchain technology. However, while Bitcoin revolutionized the payments industry by making digital currencies a thing, its blockchain faced scalability challenges.
Ripple is among the blockchains that stepped in to address Bitcoin’s limitations and ensure blockchain’s reach in the payments industry is achieved. As such, Ripple is dominating the global digital payments industry.
This article dives into the intricacies of how to buy XRP. It also educates beginners about this promising crypto project, how it works, and XRP’s potential for growth.
Understanding Ripple
The history of Ripple dates back to 2012. Ripple, a technology company based in the United States, developed the Ripple blockchain infrastructure known as RippleNet. This network aimed to allow banks to conduct seamless, fast, and cost-effective cross-border payments.
Ripple operates like the Society for Worldwide Interbank Financial Telecommunication (SWIFT) system that expedites bank transactions. However, unlike SWIFT, Ripple employs blockchain technology to support payment settlements, remittances, and even currency exchanges, all in real time.
RippleNet later gave birth to the XRP Ledger (XRPL), an open-source layer one blockchain. Due to its commitment to streamlining the global payments industry, XRPLedger has gained adoption from leading players in the traditional payments industry, such as MoneyGram.
Ripple is also working with central banks worldwide to support the creation of central bank digital currencies (CBDCs). In May 2023, it launched a blockchain-based CBDC platform targeting central banks worldwide.
With these use cases, there is no doubt that XRP is among the few cryptocurrencies with utility. XRP is the currency used on XRP Ledger, and as its usage grows, so does its value.
What Is XRP?
XRP is the native token for the Ripple ecosystem. It is paramount to note that Ripple and XRP are different entities. Ripple is the network, while XRP is the token. The Ripple network does not need XRP to function.
However, this does not mean that the token does not have utility. XRP is used to transfer funds across borders at low costs. Financial institutions that want to launch their offerings on the Ripple network use it as a bridge currency.
XRP is a pre-mined token. This means that most of the tokens were created or mined before the project was launched to the public. The token has a total supply of 100 billion coins, with more than half of these coins already in circulating supply.
XRP’s Price
Before you buy Ripple, it is best to glance at the price to understand whether it is an excellent pick to diversify your investment portfolio.
At the time of publication, XRP was trading at $0.518, with a market cap transcending $28 billion. It ranks as the seventh-largest cryptocurrency by market cap.
XRP is not immune to the volatility that often rocks the cryptocurrency market. Its price can change drastically depending on market sentiment. Therefore, as you learn how to buy Ripple, you should conduct due diligence on the potential risks involved.
Below is a chart showing XRP’s price movement over the past year.
Many factors can influence the price of Ripple. The forces of demand and supply have a bearing on price. Furthermore, if there are any developments within the Ripple network, XRP might record gains. A critical factor that drives XRP’s price is regulatory developments.
Before you buy Ripple, you should also understand that this token is under scrutiny from the US Securities and Exchange Commission (SEC). In December 2020, the SEC classified XRP as a security and sued Ripple’s co-founders for selling unregistered securities.
The case between Ripple and the SEC has been ongoing for more than three years, with the XRP community eagerly awaiting the outcome, which will have a bearing on how cryptocurrencies are regulated in the US.
It is important to note that the regulatory framework around cryptocurrencies has yet to be fully established in many jurisdictions, including the US. Therefore, before buying Ripple, research any potential legal risks.
How To Buy Ripple
Now that you understand the Ripple network and the potential risks that might arise e, we should explore how to buy Ripple. You should note that the SEC’s case against Ripple might affect your accessibility to the token on exchanges based in the US.
Below is a step-by-step guide on how to buy Ripple and be part of the active XRP community.
Choose A Reputable Cryptocurrency Exchange
The first step to buying Ripple is to choose a reputable cryptocurrency exchange. Cryptocurrency exchanges are platforms that list different cryptocurrencies. Once you open an account with them, you can buy Ripple and many other cryptocurrencies.
There are many cryptocurrency exchanges in the market and one of the daunting tasks that beginner crypto investors face is picking the best exchange that meets their needs.
Moreover, over the years, failures of several top-tier exchanges have made nascent crypto investors even more skeptical. One of the most reputable exchanges that collapsed recently was FTX, which went under with customer funds.
A cryptocurrency exchange is like a stock broker. Just like you would take caution before settling on any stock broker, you should also be cautious when picking an exchange.
Below are some factors to consider when picking a reputable crypto exchange:
- Security: You should check to see whether the exchange that you intend to use to buy Ripple (XRP) has had a hacking incident in the past. A good cryptocurrency exchange should invest in robust security measures to protect user assets.
- User-friendliness: If you are a beginner crypto investor looking for where to buy Ripple, it is best to go with an exchange that has user-friendly features. The user interface should be intuitive to give you a seamless experience. It should also make it easy for you to trade.
- Supported currencies: You should ensure that a cryptocurrency exchange supports XRP before creating an account. Most exchanges will list all the tokens supported on their website.
- Testimonials: The best way to know whether a cryptocurrency exchange has your best interest at heart is to check the testimonials from past users. If most testimonials are negative, you should refrain from creating an account with that exchange.
There are many cryptocurrency exchanges that you can pick from. Some of the most reputable ones today include Coinbase and Binance.
Create An Account On The Exchange
After settling on where to buy Ripple currency, it is time to create an account. To do so, sign up using your email address on the exchange’s official website. Some exchanges also have mobile apps you can download and use to create an account.
After creating the account, you must provide additional details, such as your full name and address. When filling out such information, ensure it is accurate, as you must verify it through a know-your-customer (KYC) process.
A KYC process involves submitting a government-issued document like an ID or a driver’s license. The verification process does not usually take much time.
When creating an account, secure it using a strong password. Hackers always seek to steal money from naive crypto investors by exploiting security loopholes.
Fund Your Account
Now that you have a cryptocurrency exchange account, it is time to fund the account. There are two ways that you can fund your account: using fiat currency or using other cryptocurrencies.
There are many ways to fund your account using fiat currency. You can choose to link your credit card or debit card. You can also perform a direct bank transfer or use payment platforms like PayPal.
Some exchanges might have only some of these options. Therefore, check the possibilities the exchange offers to fund your account.
The second way of funding your account is by using other cryptocurrencies. If you already own other tokens like Bitcoin or Ethereum, you can deposit them on the exchange, after which you will trade them for XRP.
Place An Order To Buy XRP
After funding the exchange, you can now place an order to buy Ripple. Some of the most common order types that you will find on cryptocurrency exchanges include the following:
- Market Order: A market order will be fulfilled at the prevailing price of XRP. For example, if you place a market order when the Ripple buying price is $0.48, the order will be fulfilled instantly at that price.
- Limit Order: A limit order is used when you expect the price of XRP to drop. For example, suppose XRP is trading at $0.48, but you expect the price will drop to $0.45. You will create a limit order that will be fulfilled if XRP hits $0.45.
- Stop-limit order: A stop-limit order comes in handy to reduce losses from your XRP investment. When you set a stop-limit order, the XRP you hold on an exchange will be automatically sold when the XRP drops below a specific price.
After the cryptocurrency exchange has fulfilled your order, the XRP you own will be reflected on your exchange’s balance. The amount of XRP tokens will remain the same, but the value in fiat terms might change depending on the token’s price.
Store XRP In A Secure Wallet
After you buy Ripple, it is best to get a cryptocurrency wallet that you will use to hold your tokens. It is not recommended that you leave your coins on an exchange. The crypto community has consistently advocated for self-custody as it gives you more control over your holdings.
The two main types of wallets that you can use to hold XRP securely are software wallets and hardware wallets.
A software wallet comes in the form of a mobile application. It allows you to hold your crypto online. With a software wallet, it will be easy for you to trade XRP as it is easy to deposit tokens to and from the exchange.
A hardware wallet will store your tokens offline, mainly in a USB device. A hardware wallet is more secure. It is the best choice when holding XRP for the long term or holding many tokens.
You should be wary of scams and hacking attacks constantly targeting crypto wallet owners. To protect your assets, you must secure your wallet with a strong password and check for any updates to patch vulnerabilities. You should also be wary of phishing campaigns.
In Summary
XRP is one of the top ten largest cryptocurrencies in the market. The token is associated with the Ripple blockchain network, making great strides in integrating blockchain technology in the global cross-border payments sector.
If you are a new cryptocurrency investor looking to buy Ripple, consider the risks, such as price volatility. Conducting your research before investing in any high-risk asset is also best.
The best place to buy Ripple is a cryptocurrency exchange. A cryptocurrency exchange is like a brokerage platform. You can create an account, fund it, and place an order depending on the amount you want to spend. After buying XRP, it is recommended that you store it safely in a cryptocurrency wallet.
FAQs
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Where can I buy Ripple?
The best place to buy Ripple (XRP) is from a cryptocurrency exchange. Once you pick a reputable exchange, create an account and deposit the amount you want to spend to buy XRP tokens.
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Is buying Ripple a good investment?
Ripple is a good investment if you want to invest in a token with broader utility. However, just like any other cryptocurrency, Ripple is often plagued by price volatility, which can cause significant losses within a short time.
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Can I buy Ripple with a debit card?
Yes, it is possible to buy Ripple with a debit card. Your exchange will allow you to link your debit card, after which the amount you want to invest in XRP will be deducted.
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What is XRP used for?
XRP is used as a bridge currency. It can be used by financial institutions that want to use the Ripple network and are looking for an easy way of paying for transactions.
