Ripple (XRP) is a popular cryptocurrency token native to the Ripple network (RippleNet). The token has been around since 2012 and has one of the top market caps in crypto. Ripple’s underlying system can also be described as a “realtime gross settlement system” (meaning it can be used to transfer funds and settle them in real time) that allows for currency exchange and remittance (the transfer of money); i.e. its a system for transferring money online in real time.

Its based on a shared, public database (AKA ledger) which uses a consensus process (much like Bitcoin’s blockchain).

Ripple basics

In order to understand how Ripple functions, it’s useful to know about the RTGS and RTXP (we’ll make sense of these jumbled letters soon).

For example, when you send money via Bitcoin, the value is settled in real-time (not counting any Bitcoin delays). That’s what we mean by Real-time Gross Settlement System (RTGS).

Ripple uses what is called “gateways”, which is best described as something similar to a global ledger made up of something similar to private blockchains. This is essentially a digital portal that governments, companies, and financial institutions use to join the Ripple network. This is called the Ripple Transaction Protocol (RTXP), formally known as RippleNet. This is Ripple’s pride and joy.

Once another government, company, or financial institution joins RTXP, it can transact with other gateways at a much faster speed and a fraction of the cost. RTXP also makes it possible to receive payments from any fiat (ex. USD, EUR,) or cryptocurrency (ex. BTC, ETH).

Ripple essentially made something for any type of entity that regularly moves large amounts of money across borders. For example, companies such as Apple and Amazon are already spending billions across borders.

It’s important to note that the Ripple Network also functions as a currency exchange between all types of fiat money. However, in order to do do this, it has to be able to guarantee liquidity. That’s where XRP comes in. XRP is the digital asset that is built for providing source liquidity to payment providers, market makers, and banks.

While Ripple’s infrastructure makes sense for large corporations, it doesn’t lend much to the average consumer. RTXP doesn’t provide the average person much of a benefit. So, Ripple likely isn’t going to change how you personally receive and send money anytime soon, but it is looking to revolutionize how money moves around the world on a larger scale.

Ripple’s Supply and where to buy

A key element to know about Ripple (XRP) is the sheer amount of Ripple in existence. All XRP has already been created with a total supply of 100 billion. There are currently around 38.6 billion Ripple XRP tokens in circulation, with the rest held by Ripple Labs.

You can buy Ripple at many of the most popular cryptocurrency exchanges such as Bittrex, Kraken, Bitfinex, Poloneix, Binance, and more. Eventually, it seems that Coinbase will allow you to purchase Ripple as well.

I personally purchased Ripple initially on Binance, but most exchanges will allow you to trade Ripple.

If you want to hold Ripple (XRP) for the long term, however, I recommend using a hardware wallet such as the Ledger Nano S or one that supports Ripple.

Hard wallets are generally much safer because they’re offline and have better security than exchange and other online wallets, but they aren’t ideal for someone trading frequently. Online wallets such as the ones hosted on Binance make it easier to trade, but since they are connected to the Internet there is a risk involved.

Conclusion

So, whether you choose to invest in Ripple (XRP) or not, it’s worth watching as blockchain adoption increases. Ripple is one of the most talked about cryptocurrency out there. It is always compared to Stellar.

 

Author: Wilson

Wilson is a 3x Startup Entrepreneur. He is passionate about the cryptocurrency space. You can catch him tweeting about cryptocurrency often @itswilson8

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