The Complete Cryptocurrency Guide on How to Buy XRP

Ripple is a company that many finance and cryptocurrency experts know all about as it has skyrocketed in popularity since it was founded back in 2012. The company is mainly a real-time gross settlement system, which means that it has its own native cryptocurrency coin, known as XRP. XRP is the main currency that is traded on the Ripple Labs finance network and it has quickly become one of the most popular and most traded digital currencies on the planet.

Let’s explore what XRP is, how to buy XRP, as well as whether or not XRP is transparent and safe for new and old investors in this cryptocurrency guide.

What is XRP?

One of the most interesting things to note about XRP and Ripple is that, unlike other popular cryptocurrencies on the market right now (Bitcoin, Ethereum), this coin does not trade on a blockchain network. This means that XRP can not be mined as it runs on what many experts in the industry refer to as a “hash tree”. This means that there are a finite number of XRP coins (100 billion), making owning one of them particularly valuable and sought after. These coins are the only ones in existence and no more can be coded or mined via or on the blockchain.

However, it may be a slight fallacy to suggest that XRP is free of any blockchain technology whatsoever. XRP is a completely decentralized coin that operates on what many refer to as an open-source blockchain known as the XRP ledger. This means that this chain operates exclusively for the running and maintaining of XRP coin. The digital XRP token is supplied/distributed in one of two ways.

When XRP was launched, the first 80 billion coins were allocated to Ripple, the parent company and native holder of the XRP code. To ensure a stable supply of XRP coin from Ripple, over 50 billion were transferred into an escrow account. The Ripple co-founders and core team were allocated around 20 billion XRP to split between themselves, making them the highest owners of the coin in real-time. This was done as a reward incentive for the innovators that brought Ripple and the digital XRP currency to life.

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XRP is firmly placed within the top 10 digital cryptocurrencies when measuring value in terms of market capitalization. This clearly indicates the enormous popularity of the coin, despite there only being a finite amount. The popularity of a coin like Bitcoin makes more sense, as more and more can always be mined, meaning that the customer base and target audience are somewhat unlimited. Experts believe that based on trading since its inception, XRP and Ripple, as a trading platform, currently boasts a total market value of around $26 billion. This means that a single unit of XRP is rather cheap at the moment, especially in comparison to more popular digital currencies. But as this number continues to grow and as XRP and Ripple continue to break into the conventional finance market through their independent and decentralized platform, the value of XRP could skyrocket in the near future. This could present an interesting long term investment opportunity.

How Does XRP Work?

As explained briefly above in our cryptocurrency guide, XRP does not run on conventional blockchain technology. Instead, XRP runs on an independent, blockchain-like network known as the XRP ledger. This means that XRP currently does support the trading and transfer of fiat currencies on its platform. The protocol on which XRP is traded and maintained is also completely open source, meaning that anyone can access it at any time without any need to gain permission from Ripple Labs. This may make many people sceptical about the safety and transparency of the network upon which their digital currencies exist, but those fears are unfounded.

The main reason Ripple decided to keep the protocol open source is so that banks and non-banks, could easily incorporate the system into their own networks. This real-time versatility could play a big role in increasing the value of XRP as digital currencies continue to break into the mainstream finance industry.

The XRP ledger is maintained by various independent coders and entities that are often referred to by Ripple as the “Global XRP Community”. The role of these independent entities is simple – they run the network and validate any XRP transaction that may take place on the ledger. Any and all transactions must be approved by an independent node that belongs to the Global XRP Community.

Is XRP Transparent?

Unfortunately due to the open source and the physical transparency of the XRP network, there have been many controversies surrounding this digital currency. Many of the fears that people have surrounding this type of open source ledger for an already unregulated type of currency, in contrast to a more secure blockchain network like the ones that Bitcoin and Ethereum exist on, are that the protocol is left open to easy attacks.

One of the major controversies surrounding XRP and Ripple occurred back in 2015 when the United States Financial Crimes Unit charged the parent company Ripple $700 000 for violating the Bank Secrecy Act by selling XRP on an open source network without any form of authorization and for failing to implement the anti-money laundering program. This is clearly not a good look for the founders of XRP, but in all honesty, this hasn’t stopped the explosion of XRP’s popularity in the crypto sphere.

Many people who dabble in XRP like the fact that the protocol is open to anyone, and many XRP owners strongly believe in the parent companies’ evolution, into a truly decentralized and legit form of finance that will become mainstream in the future. These controversies however do not contribute to the transparency and trust in XRP and Ripple labs.

How To Buy XRP

XRP can be bought using any type of fiat currency or any other type of cryptocurrency if that digital asset is supported by the XRP ledger. This makes XRP an absolute titan in terms of freedom of digital trade, especially in comparison to other coins that only accept trades of the same currency or some type of fiat currency.

1. Secure Physical Storage

It may sound surprising, but despite being entirely digital, all holders of significant amounts of cryptocurrency should secure a safe physical storage facility for their mined or owned coins. This applies to the purchase of any cryptocurrency, and not just XRP. All crypto holders should consider cryptocurrency as a physical commodity that can be stolen or broken if not securely or safely stored.

For physical storage, backups like external hard drives and USBs are a good way to keep your crypto investments extra safe. For online or digital storage, there are a number of secure online wallets that you can use to store your digital currencies.

2. Choose a Crypto Exchange

Before actually buying XRP, you’ll need to find a crypto exchange platform that allows the trade of this type of digital currency. There are many for you to choose from should you want to start investing in XRP. Some of the main exchanges allowing for the trade of XRP include: 

  • Binance
  • Bithump
  • Kraken
  • Liquid
  • Phemex

In general, when looking for the best crypto exchange platform you’ll want to go for one that offers low account minimums and low trade fees. You can also use cryptocurrency guides and reviews to find a platform for your preferred coins.

3. Sign Up for an Account

Once you’ve chosen your crypto exchange platform you must set up an active account before trading. You may get asked for personal information like ID or social security numbers and bank account details. This is part of a verification process that identifies and prevents scammers in the trading world.

4. Deposit Money Into Your Crypto Wallet

After you’ve set up an active account on the trading platform, you’ll need to deposit money from your bank account into the crypto wallet on the platform. These wallets are properly secured if you’re using a popular exchange platform.

5. Buy XRP

Once you have money in your crypto wallet you can purchase from the many coins available. Look for XRP/Ripple and make your purchase according to the static finance in your crypto wallet – this will convert when you complete the purchase and you can monitor the market value of XRP until you decide to sell.

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Is Crypto Trading Safe?

Regulation and safety are two of the main issues that hold people back from investing in cryptocurrency. There’s a fear that large sums of money are invested into a cryptocurrency they’ll be lost to scammers or stolen by hackers. These fears are because generally, cryptocurrency trading is largely unregulated in almost every country on the planet.

However, what potential investors need to know is that because cryptocurrency is unregulated and not controlled by a single entity such as a government or a bank, many of the leading crypto exchange platforms are privately run. Reputable platforms are safe and secure as they implement cutting-edge digital safety measures to keep online wallets and digital currencies safe from hackers and scammers. If you’re using a cryptocurrency guide recommended exchange platform, trading is mostly safe and secure.

Many leading crypto exchange platforms utilise two-factor authentication that requires secondary short-term security codes for access to an account or a wallet. As the holder, you can access your wallet freely, but any third party won’t be allowed to.

Despite the controversies surrounding XRP and Ripple labs, the digital currency has started to gain the trust and recognition of investors who are experts in the digital currency industries as well as established financial institutions that are deciding to make the switch to a fully decentralized form of investing and finance. One thing is for sure when it comes to XRP, you are definitely safer for buying when compared to most other alt-coins. Many would argue that it’s safer to invest in a stable and well-known coin like Ethereum or Bitcoin. But in reality, you are not very likely to be put into financial danger when investing in XRP.

Should I Invest in XRP?

XRP was originally designed to be a utility token used on the Ripple network. When it was launched the founders of Ripple never intended for the coin to be used as an investment opportunity or a cryptocurrency in the conventional sense. However, the fact that the protocol upon which XRP is traded is open source, and the fact that many experts predict a big future for the finite digital coin, means that more and more people are becoming interested in owning a piece of the XRP pie.

The coin is not yet as popular as Bitcoin or Ethereum but there is no evidence to suggest that it won’t one day reach that level. Investing in XRP early is definitely a good idea, as each finite piece of the digital token will only increase in value as does the value of Ripple Labs.

XRP FAQs

When Did Ripple Enter the Cryptocurrency Sector?

Ripple was founded in 2012, just a few years after the emergence of Bitcoin.

Does XRP Use the Blockchain Network?

No. XRP is one of the few cryptocurrencies that doesn’t trade on the blockchain network.

Can You Mine XRP?

As it is not traded on the blockchain network, you cannot mine XRP. Instead, XRP uses what is termed “hashtree” in its creation.

Are There Unlimited Numbers of XRP?

No, there are only 100 billion of these coins so they are more sought after.

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