What is Ripple? The ultimate guide to XRP

Ripple is a fast money transfer network and cryptocurrency. Read why it has enjoyed steady growth, and how to buy.

Updated

Ripple coin
The Ripple network has been accepted by several banks as a legitimate money transfer system, and the currency (XRP) offers a range of useful features. It’s a bit more complicated than most cryptocurrencies, though.

This guide goes through what Ripple is, how XRP works, what to consider before trading and where to buy.

Disclaimer: This information should not be interpreted as an endorsement of cryptocurrency or any specific provider, service or offering. It is not a recommendation to trade.

What is Ripple?

IconSymbolInitial release dateAlgorithm typeMax. supply
XRP2012Ripple Protocol Consensus Algorithm (RPCA)100 billion XRP

The goal of Ripple is to be a global settlement network, a platform to allow anyone to transfer money in any currency to any currency in a matter of seconds. This is an ambitious goal meant to eliminate the use of older systems like Western Union or SWIFT.

How does Ripple work?

Consider this scenario: Alice and Bob need to send some money to each other. Alice uses Jamaican dollars (JMD) to conduct her business, while Bob operates in Bangladeshi taka (BDT).

While it might not be evident to end users, the process behind Alice sending Bob money involves converting the JMD to a common currency like USD, then transferring the money between Alice’s bank and Bob’s. Finally, the USD in Bob’s bank is converted back to BDT.

This incurs a lot of fees at every exchange and wastes a lot of time. The Ripple network and currency aim to fix this problem.

The alternative Ripple proposes is the use of XRP as a common currency underlying all money transfers between different currencies (USD is currently the most common currency). Not only are transaction fees much lower to convert from one currency to XRP and back, but transfers take a maximum of 4 seconds to execute and verify.

Quite a few global banks have already started embracing Ripple as it saves them a lot of money in the long run by avoiding exchange fees.

How to buy Ripple

You might consider the following Ripple brokers and Ripple exchanges. All of the following let you buy, sell or trade XRP, although their value for money and convenience might vary.

Name Product Deposit methods Fiat Currencies Cryptocurrencies
Credit card,Bank transfer (SEPA),SOFORT,SWIFT,Fedwire
USD, EUR, AUD, CAD, GBP, JPY

10
cryptocurrencies

Founded in 2013, CoinMama lets you buy and sell popular cryptos with a range of payment options and quick delivery.
Credit card,Debit card
USD, EUR, GBP, AUD, CAD, CHF, HKD, JPY, PHP, ZAR & 30+ more

146
cryptocurrencies

Access competitive crypto-to-crypto exchange rates for 150+ cryptocurrencies on this global exchange.
Cryptocurrency
USD, EUR, GBP, JPY

164
cryptocurrencies

Cryptocurrencies are a highly volatile investment product. Your capital is at risk.
Spot trade all of the major cryptos on this full-featured exchange and margin trading platform.
Bank transfer (ACH),Credit card,Bank transfer (SEPA), Faster Payments Service,Skrill
USD, EUR, GBP, RUB

23
cryptocurrencies

Disclaimer: Highly volatile investment product. Your capital is at risk.
Use your USD, EUR or RUB to buy and sell cryptocurrency at competitive exchange rates and with high maximums for verified accounts.
Cash,Credit card,Cryptocurrency,PayPal,Western Union
DZD, XCD, ARS, AMD, AWG, AUD, AZN, BSD, BHD, BDT & 140+ more

1
cryptocurrency

Connect with bitcoin buyers and sellers through this peer-to-peer marketplace that accepts cash, credit and more than 300 other payment methods.
Credit card,Debit card,Neteller,PayPal,Wire transfer,Online banking
EUR, GBP, NZD, USD, AUD, CAD, HKD, SGD, CHF, NOK & 5+ more

16
cryptocurrencies

Disclaimer: Volatile investment product. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money.
Copy the trades of leading cryptocurrency investors on this unique social investment platform.
Cryptocurrency

6
cryptocurrencies

Disclaimer: Highly volatile investment product. Your capital is at risk.
Trade cryptocurrency derivatives with high liquidity for bitcoin spot and futures, and up to 100x leverage on margin trading.
Bitit Cryptocurrency Marketplace
Cash,Credit card,Debit card,Neosurf,Bank transfer (SEPA)
EUR, USD, JPY, DKK, GBP, SEK, NOK, TRY & 5+ more

50
cryptocurrencies

Buy cryptocurrency with cash or credit card and get express delivery in as little as 10 minutes.
Credit card,Cryptocurrency,Debit card,Bank transfer (via third party)
USD, AUD, GBP, CAD, EUR, CNY, RUB, TRY, NGN, UAH & 23+ more

201
cryptocurrencies

Trade an extensive range of reputable coins on this world-renowned exchange, popular for its high liquidity and multi-language support.

US residents: As of September 2019, US-based users can only trade USD on the American dollar onramp of Binance, Binance.US.
UK residents: In addition to normal crypto trading services, Binance offers margin lending. As this is a regulated activity which they are not authorised to offer in the UK, we advise you not to use this service. If you're interested in margin trading, see authorised providers.
Cryptocurrency,Express Polish Post Office 24/7,Wire transfer,GBP bank transfers
USD, EUR, PLN, GBP

41
cryptocurrencies

This Polish-based exchange offers a variety of accessible payment methods, including Express Polish Post Office 24/7 service and Express DotPay.
ShapeShift Cryptocurrency Exchange
Cryptocurrency
-

51
cryptocurrencies

Quickly swap between more than 40 cryptocurrency assets or use your credit card to instantly buy bitcoin.
AdvCash,Cryptocurrency,Payeer,Perfect Money,Capitalist
USD, RUB

1427
cryptocurrencies

Pay in USD, RUB or trade crypto to crypto at this Russian-based cryptocurrency exchange with hundreds of coins listed.
Bank transfer,Credit card,Debit card,Neteller
GBP, EUR

4
cryptocurrencies

Buy and sell bitcoin in GBP or EUR with credit card, debit card and bank transfer payment options.
HitBTC Multi-currency Exchange
HitBTC Multi-currency Exchange
Bank transfer (SEPA),SWIFT
USD, EUR

213
cryptocurrencies

Buy crypto with fiat (USD/EUR) and trade over 150 other digital assets on this Europe-based exchange platform.
Huobi Cryptocurrency Exchange
Cryptocurrency
GBP, USD, AUD, EUR, INR, BRL, KHR, CAD,CNY, NZD & 15+MORE

234
cryptocurrencies

Huobi is a digital currency exchange that allows its users to trade more than 190 cryptocurrency pairs.
Credit card,Cryptocurrency,Debit card
USD, EUR, GBP, RUB, CNY, AUD, KRW, JPY, TRY, VND & 40+ more

210
cryptocurrencies

Browse a variety of coin offerings in one of the largest multi-cryptocurrency exchanges and pay in cryptocurrency.
Bank transfer,BPAY,Cash,Cryptocurrency,Osko,PayID,NPP
AUD, GBP

8
cryptocurrencies

CoinJar offers a simple way to buy, sell or trade cryptocurrency with AUD. Enjoy free and instant deposits, flat 1% fees and free withdrawals to your bank account.
BPAY,Cryptocurrency,POLi
AUD

8
cryptocurrencies

Owned by the founders of the CoinJar platform, CoinJar Exchange is an advanced digital currency exchange suited for experienced traders.
Credit card,Cryptocurrency
USD, EUR, AUD, CAD, CHF, CZK, DKK, GBP, HUF, ILS & 20+ more

115
cryptocurrencies

Trade various coins through a global crypto to crypto exchange based in the US.
Electronic Funds Transfer,Wire transfer,Osko,PayID,Ethana Custody
USD, EUR, GBP, JPY, CAD, CHF, AUD

40
cryptocurrencies

Buy, sell and trade a range of digital currencies on this high-liquidity exchange – suitable for beginners right through to advanced traders.

UK residents: In addition to normal crypto trading, Kraken offers margin lending. As this is a regulated activity which they are not authorised to offer in the UK, we advise you not to use this service. If you're interested in margin trading, see authorised providers.
Bittrex Digital Currency Exchange
Cryptocurrency,Wire transfer
USD

278
cryptocurrencies

Buy from one of the largest cryptocurrency exchanges with a selection of over 190+ cryptocurrencies and 3 USD pairings.
Bitstamp Cryptocurrency Exchange
Credit card,Cryptocurrency,Debit card,Bank transfer (SEPA),Wire transfer
USD, EUR

5
cryptocurrencies

A global cryptocurrency exchange that facilitates crypto to fiat transactions, where you can use EUR or USD to buy bitcoin and popular altcoins.
Bithumb Cryptocurrency Exchange
Cryptocurrency,Wire transfer
KRW

103
cryptocurrencies

A global platform where users can make KRW and cryptocurrency deposits to purchase up to 15 popular cryptocurrencies.
OKEx Cryptocurrency Exchange
Bank transfer,Cryptocurrency,WeChat
USD, CNY, EUR, ARS, AUD, BGN, BRL, CAD, CHF, COP & 20+ more

269
cryptocurrencies

Listing over 100 cryptocurrencies, OKEx offers its users a variety of payment methods and coins to choose from.
Gate.io Cryptocurrency Exchange
Cryptocurrency
-

36
cryptocurrencies

Bank transfer,Credit card,Debit card,Bank transfer (SEPA),Wire transfer
GBP, EUR

96
cryptocurrencies

BC Bitcoin is a UK-based cryptocurrency brokerage that buys and sells more than 100 different cryptocurrencies.
Liquid Cryptocurrency Exchange & Margin Trading
Credit card,Cryptocurrency,Debit card,Bank transfer (SEPA),Swapforex
AUD, EUR, JPY, USD, SGD, PHP, HKD

132
cryptocurrencies

Disclaimer: Highly volatile investment product. Your capital is at risk.
Liquid is a unified, globally-sourced trading platform that bridges the worlds of fiat and crypto.
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How is Ripple different from bitcoin?

The Ripple coin and the Ripple Network have been built with slightly different purposes in mind, and it’s worth considering whether they provide advantages over bitcoin.

Fast and cheap

Ripple transaction processing only takes four seconds since it’s significantly less active compared to bitcoin. This has the added bonus of cheaper transaction fees, whereas the price for bitcoin transactions has been on the rise lately as more people adopt the platform.

Mining-free

All the 100 billion XRP that it’s possible to use on the platform already exist. While they’re not all on the market – a few are released into the market every month to avoid flooding – there is no use mining as there is nothing of value to be added, unlike in more traditional cryptocurrencies.

XRP in escrow

In May 2017, Ripple pledged to lock up 55 billion XRP in 55 different smart contracts, essentially putting billions of dollars in escrow. Each month, a contract then releases 1 billion XRP into the market.

The primary motivator for this move was the fear that Ripple would suddenly reduce the price of the coin by releasing the billions of XRP that it’s holding onto the market.

The move to lock up XRP will mimic the effect of mining as seen in other currencies like bitcoin, with the goal of keeping XRP steadily growing.

Bank acceptance

The Ripple platform and coin being accepted by banks gives the process legitimacy and, at least from an investor’s standpoint, can be a little more reassuring. This is not the case with bitcoin and other currencies as they are seen as competition by the banks.

Today’s Ripple price

1
0
Updated: 30 Sep 2020 19:12:59 UTC

Where can I use Ripple?

XRP is still a long way from being as widely accepted as coins such as bitcoin, Litecoin or Ethereum. It was never the goal to use Ripple as a payment method. Instead the aim has always been to use XRP to grease the wheels, in order to make fiat money transfers easier, faster and more secure.

However, there are still some merchants that accept Ripple. You can find a list here on the XRP forums.

Using Ripple to transfer money

Transferring money with Ripple works like any other cryptocurrency:

  1. Have some XRP available in your wallet. XRP wallets are the same as, for example, bitcoin wallets. Buy XRP on an exchange and then transfer them to your wallet.
  2. Scan or enter the recipient’s address. Whether they provide you with the hashed wallet address or a QR code, just follow the simple instructions on your wallet of choice and you’ll be done in no time.
  3. Enter the amount and send. The transaction should be verified in a few seconds and you’re done.

Other ways to get Ripple

Unless you’re a bank willing to invest into the Ripple platform, and because there is no mining allowed on Ripple, there are only two major ways to make money from it.

Get paid in Ripple

Anyone who decides to get paid in XRP will see the coin sitting in their wallets, but will also be helping the currency gain legitimacy and wider use. Ripple will benefit from any merchant accepting the currency.

Purchase Ripple

While the Ripple platform might not be easily accessible to traders, anyone can find a way to buy XRP. As more and more merchants and banks adopt the platform, it’s possible its price will increase too.

What to watch out for

As much as some people love Ripple and see it as the next generation of cryptocurrencies, there are also some who have concerns over privacy and centralization.

  • Privacy concerns

Cryptocurrency has always been considered the poster child of privacy and anonymity. Ripple’s decision to market their platform exclusively to banks has been a cause of concern for some users who worry about big brother keeping an eye on their transactions.

  • Centralization

Ripple’s platform is extremely centralized whereas most cryptocurrencies aim to be as decentralized as possible. The reason for this is that Ripple owns the vast majority of the coins available on the platform while currencies like bitcoin allow anyone to mine and acquire coins. The move to lock coins inside smart contracts was a step in the right direction to fix this issue, but every time the coins are released they first go to Ripple to do with them as it pleases.

What’s next for Ripple?

The company behind Ripple plans, as a priority, to improve the lack of decentralization from which the platform is currently suffering. By adding more trusted validator nodes, the company plans to shake off the image that it’s just another central bank controlling the Ripple currency.

With that said, the future of Ripple appears to depend entirely on the adoption of the platform by banks and that’s where the focus of the people behind Ripple probably needs to be. As more banks join the network, the price of XRP will no doubt continue to rise, driving more people to the coin and enticing banks to join the platform.

Frequently asked questions

Disclaimer: Cryptocurrencies are speculative, complex and involve significant risks – they are highly volatile and sensitive to secondary activity. Performance is unpredictable and past performance is no guarantee of future performance. Consider your own circumstances, and obtain your own advice, before relying on this information. You should also verify the nature of any product or service (including its legal status and relevant regulatory requirements) and consult the relevant Regulators' websites before making any decision. Finder, or the author, may have holdings in the cryptocurrencies discussed.
Image sources: Shutterstock, CoinMarketCap

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