What is Ripple?
Ripple is a global settlement network, making it easy to send any currency to anyone, anywhere in the world, in a matter of seconds. The Ripple platform has made the archaic system of sending money through SWIFT or Western Union old fashioned. At the moment Ripple only works with banks by offering them a more efficient and cost-effective way to make real-time payments worldwide.
Let’s use a hypothetical example. Sending fast and cheap money from Japan to Nicaragua, JPY / NIO is not really common. Instead, an individual or bank must trade JPY to USD and then USD to NIO. At every step there are costs, which ultimately leads to an expensive way of sending money. By using Ripple, a person or bank can trade JPY to XRP (Ripple’s currency) and then send XRP to the final recipient. Every individual or bank in Nicaragua with a Ripple wallet can convert XRP into NIO. In Jip-en-Janneke language you could say that XRP is the lubricating oil that allows one currency to be easily and quickly traded against another currency.
Although banks in general are fairly slow with the use of Ripple, there is no doubt that real-time global payments will become the current banking standard in the future. The Ripple platform gives banks a huge advantage over banks that do not use it and financially Ripple is focused on the ” Internet of Value ”. This means that sending money should go as fast as sending information in the current technological age. With Ripple, people do not have to pay high additional costs and wait for days when sending money internationally. A nice comparison is Ripple with E-mail. Why can I send someone a message that arrives within a few seconds but no money? The basic principle of Ripple and XRP is to send money internationally in real time.
Why use or do banks use Ripple?
A number of banks have already joined the Ripple platform. These include Santander, Axis Bank, Yes bank, Westpac, Union Credit, NBAD, UBS and a number of other banks. According to Ripple, banks can save on average $ 3.76 per payment by using the Ripple protocol. Since banks carry out thousands or maybe millions of transactions per year, they can save considerably. by going into the sea with Ripple.After all, if there is one thing that banks are interested in, it is making more money and saving more money.This is why Ripple or a real time, low cost global settlement network equivalent to Ripple will have a lot of future as they offer a new way of doing business to financial institutions.
Ripple is led by Brad Carlinghouse and the brain behind the scenes is David Schwartz, Chief Cryptographer. With its headquarters in San Francisco and branches around the world, the Ripple team is constantly expanding and improving their protocol. Ripple continues to adopt top talent from all over the world and aims to reach and obtain the majority of the international money shipping market with its services. Ripple is very positive at the moment, as it is one of the most talked-about Fintech companies.Even Forbes has Ripple in her Fintech top 50.
How can I invest in Ripple?
Although large investors may be able to invest directly in Ripple, smaller investors and speculators can only invest in XRP. XRP, Ripple’s currency, rose dramatically in value in early 2017 from below $ 0.01 to above $ 0.40 per coin. This enormous increase in value is due both to the use of Ripple by banks and due to speculative interest among investors. As it stands now, Ripple has the third largest market value among cryptocurrencies after Bitcoin and Ethereum.
As explained above, XRP ensures worry-free global transactions from any currency to another currency at very low cost. You can see that XRP is the reserve currency of the Ripple platform which allows users to exchange any currency for XRP and then send the XRP to others worldwide. The person, financial institution or company that receives the XRP can then exchange it for a currency of its choice.
Every time that a random currency is exchanged for XRP, the liquidity and the value of XRP increases, due to increased demand. In other words, you could say that Ripple is trying to make the XRP a kind of global reserve currency, even if it does not look like it at the moment of writing.
Although sending XRP is the easiest and cheapest way to send value via the Ripple protocol, at some point it will not even be necessary to convert XRP into another currency and simply use XRP itself for global payments. If people and banks decide to convert their fiat currencies into XRP and collectively decide not to use the fiat currency anymore and only the XRP, the price of XRP will undoubtedly rise enormously.
The goal of Ripple is to make XRP a stable currency that does not change too much in value per day or even hour or minute, so that banks can use the currency without fear of volatility. As it stands now, banks still have nothing to do with XRP because the value can fluctuate enormously per day. To assist banks and payment providers, Ripple has entered into a partnership with BitGo to reduce these risks and increase the chances of using XRP by banks.
A long-term value appreciation of XRP is the ultimate end-game strategy of Ripple, since they manage the majority of the existing XRP themselves. This actually means that a ‘bet’ on XRP is a gamble on Ripple. It may be said that Ripple also provides consulting services to financial institutions and has no problems with insuring transactions when necessary. In other words, it seems that Ripple will not be a day-long fly in the Fintech and banking sector.
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How many XRP (Ripple coins) exist?
Ripple owns 61 billion of the 100 billion XRP tokens. In order to win investor confidence, Ripple has decided to ‘close’ 55 billion XRP with 55 smart contracts. One by one, each contract containing 1 billion XRP, these smart contracts will expire monthly over a period of 55 months. As it stands now, Ripple has spent 300 million XRP monthly on costs over the past 18 months. This level of operational transparency gives skeptical investors a reason to believe that Ripple has a long-term vision and does not want to quickly benefit from dumping its holdings and thus reducing the value of XRP.
What are the benefits of Ripple?
There are a number of advantages that XRP has over other cryptocurrencies. The main advantage of Ripple is that they work directly with banks. Although anyone who has refrained from banking cartels and monopolies may not want to invest in Ripple, if only on principle, there is no doubt that Ripple is focused on smart business decisions by working together with the companies that manage the global banking industry.
Investors and investors who want to capitalize on the hard work that Ripple is doing to create a global settlement network of the future are likely to see a stable value growth of their XRP coin holdings. To put it simply, by buying XRP and just forgetting it, you can enjoy 10x or even 100x returns in the long term.
Ripple is fast. Transactions are confirmed in under four seconds. In other words: it can be used to purchase everyday products and services, assuming both use the buyer and seller Ripple. Unlike Bitcoin, Ripple is scaleable (scalable), since it regularly carries out more than a thousand transactions per second. There were even times when Ripple performed more transactions than Visa, namely 50,000+ per second.
What benefits does Ripple have compared to Bitcoin?
Bitcoin is a great payment method, but it is not a fast way to send value from one person to another, while Ripple does. The costs of sending Bitcoin have also increased enormously because more and more transactions are taking place on the blockchain. Sending XRP is relatively inexpensive. The Ripple network also does not work slower due to more transactions, which is the case with Bitcoin.
The original goal of Ripple was to develop a platform that did not cost enormous amounts of electricity, such as the bitcoin mining process. To prevent the mines, all 100 billion XRP were ” instamined ”. Some cryptocurrency traders are against the principle of ” instamining ”, since they think that every coin should be mined with graphics cards, computer processors or ASICs.
On many forums it will be read that cryptocurrency traders think that Ripple is centralized (centralized).However, Ripple is working hard to change this. Ripple is becoming increasingly decentralized by validator node diversity on the Ripple Consensus Ledger (RCL). In fact, Ripple claims that it is more decentralized than Bitcoin at the moment. One of the biggest advantages, at least for investors and speculators, is that Ripple is working with banks around the world, while most investors see bitcoin and other cryptocurrencies as competition versus the established financial elite. We can say that banks will probably work together with Ripple and its XRP currency rather than Bitcoin.
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What are the disadvantages of Ripple?
Although XRP has advantages over other cryptocurrencies, there are investors who think that Ripple also has disadvantages. Some argue that Ripple is a kind of big brother platform to monitor financial transactions. Since the foundation of Ripple, the focus has been on everyday banking payments worldwide.These remittance payments had to work cheaply and quickly. Because Ripple initially worked exclusively with banks, cryptocurrency traders decided not to join Ripple or XRP, basically. Investors who think the Ripple platform is innovative but Ripple as a company is not allowed, can take a look at Stellar. Stellar is a fork from Ripple, designed by Jed McCaleb and has a more altruistic vision.
As mentioned above, all XRP are instamined and Ripple owns most of these tokens. Although the coins are locked in a smart contract and they probably will not be sold soon, it is something to keep in mind. In a certain way Ripple still remains the central bank of XRP. Researchers at Purdue University have determined that the Ripple platform has security problems. Because Ripple publishes its code publicly, the nodes within the network can be susceptible to a hacking attempt, as a result of which some users will no longer be able to access their XRP or even be robbed of them.
Many investors may decide not to invest in XRP for personal reasons. This mainly applies to investors who already invest in cryptocurrency and view cryptocurrency as an escape from banking cartels and government control. On the other hand, investors who want to make a profit and see nothing wrong with Ripple’s business model have had reasons to invest in XRP.
How do I buy Ripple (XRP) in 3 simple steps?
Step 1 – Create a Ripple (XRP) wallet
The most important thing to look for when you create an XRP wallet to store your XRP is to write down your secret key and store it in a safe place. It is even more sensible if you write down the secure key several times and keep it in different safe locations. This secret key gives you access to your XRP wallet as a user.If you lose the secret key, you can no longer access your XRP. Each Ripple wallet must contain at least 20 XRP as a reserve against spam attacks from low transactions within the Ripple network.
The smartest thing is to keep your XRP on a hardware wallet for maximum security. The Ledger Nano S is currently the only reliable hardware wallet that supports XRP and a number of other cryptocurrencies. You can read the review that I wrote about the Ledger Nano S.
Rippex offers a desktop wallet for Mac, Windows and Lunx and gives users full functionality. Here is a link to a manual on how to create a Rippex desktop wallet. At the moment there are no mobile wallets or apps known for storing your XRP. I think this will change in the future.
Step 2 – Find a Ripple Exchange
There are a number of ways to buy Ripple. You can buy it with fiat money like Euro, Dollar and Pounds or you can buy Bitcoin and they traded against Ripple on certain exchanges. It is faster and cheaper to buy Bitcoin and trade it for XRP than buy with fiat money Ripple.
Buy Ripple with fiat money
The best and fastest way to buy Ripple for people who do not yet own Bitcoin is to purchase with iDeal or Paypal Bitcoin on BTCdirect or Bitonic . After signing up and following the KYC (know your customer) procedure, the limits are increased and you can buy and sell more Bitcoin, Ethereum, Litecoin and other cryptocurrencies.
Buy Ripple with Bitcoin (BTC traded for XRP)
The fastest and easiest way to trade Bitcoin for XRP is by using Changelly or Shapeshift . Soon you can purchase on Coinbase. XRP can also be purchased with Bitcoin on Poloniex , Bittrex or another Bitcoin Exchange. If you live in Japan you can use Coincheck or Bitbank to buy Ripple, in Mexico you can use Bitso and in South Korea Coinone .There will be local exchanges online worldwide over time.
Step 3 – Send XRP Ripple to your wallet
I do not recommend leaving XRP on an exchange. This is because you do not manage the private key for your coins and for this reason they are not really yours. No matter where you got your coins, always remember to send them to your own Ripple wallet so that you have the private key yourself. When your transaction is ‘confirmed’ you have successfully purchased Ripple.
Conclusion – Is it wise to invest in Ripple?
Ripple will claim from large banks in the coming years because they build a global settlement network in which worldwide payments can be made in real time at lower costs. Anyone who buys XRP has the potential to make a huge profit on his or her initial investment when Ripple is going to be used by more and more banks. The concept of XRP as a global reserve currency is an ideal scenario for investors.
Even though XRP has increased enormously in value in 2017, I think this is only the beginning. However, as always on the stock market: if there are major gains to be made, there are also risks. Be sure to invest wisely and never invest more than you are willing to lose.
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