By: Steven Hay | Last updated: 02/25/21
XRP, commonly referred to as Ripple, has gained momentum as one of the leading cryptocurrencies. In this guide, I’m going to give you an overview of Ripple Labs, the company behind Ripple, the Cryptocurrency XRP, and the different ways it can be bought online.
Don’t you like to read Instead, check out our video guide
How to buy Ripple Summary
XRP, Ripple’s cryptocurrency, can be purchased in the following ways:
- Get a Ripple Wallet (e.g. Ledger Nano S, Edge)
- Get your XRP address
- Log in to CEX.io
- Buy XRP with your credit card
Note that an initial deposit of 20 XRP is required for each Ripple wallet to prevent fake accounts from being created. You will no longer be able to access this deposit after your first purchase.
Read on for a full explanation of Ripple, XRP, and additional purchase options. I will cover the following:
- What is ripple?
- Buy Ripple in 3 steps
- Conclusion – is Ripple a good investment?
1. What is ripple?
The banking system today uses outdated and slow systems to transfer money between institutions. Ripple is said to be the “Internet of Value” – a set of rules (i.e., a protocol) that financial institutions can use to move money around the world as quickly as information is transmitted over the Internet.
The Ripple Transaction Protocol (RTXP) supports two types of currencies – IOUs and XRP. IOUs represent debt (that is, I owe you something) and can be traded between different institutions. A bond can be issued for any type of asset, not just currencies.
XRP is a cryptocurrency primarily aimed at financial institutions so that they can convert their funds and quickly transfer them to other institutions around the world.
As for the performance of the Ripple Network, also known as RippleNet, an XRP transaction takes an average of 4 seconds and the network can process up to 1500 tx per second.
Some banks have already adopted the Ripple platform: Santander, Axis Bank, Yes Bank, Westpac, Union Credit, NBAD and UBS, among others.
According to Ripple, banks can save an average of $ 3.76 per payment using their protocol. Considering that banks conduct thousands or maybe millions of transactions every year, this translates into significant savings.
Ripple is currently one of the most exciting fintech companies with its innovative financial platform, as Forbes even includes Ripple in its Fintech 50.
While large investors may be able to invest directly in Ripple, most other investors and speculators limit themselves to investing in XRP, Ripple’s home currency.
XRP appreciated in value in 2017 as it jumped from under $ 0.01 to over $ 0.30 per coin. This enormous increase in value is due both to the takeover by the banks and to speculative interest.
The aim is to turn XRP into a stable currency, the value of which hardly deviates, so that banks can easily get into this currency without fear of volatility. Currently, many banks do not want anything to do with XRP as the value can change dramatically overnight or even in seconds.
A long-term increase in the value of XRP is ultimately the endgame strategy for Ripple as the majority of XRP exists. This means that a bet on XRP is a bet on Ripple.
While XRP has some great advantages over other cryptocurrencies, some would argue that it is a big brother platform to conduct global transactions.
Because Ripple’s original vision was centered on enabling everyday people to perform global transactions such as wire transfer payments cheaply and quickly, the fulcrum of focusing solely on banks has been viewed by many as a departure.
Anyone who likes the Ripple platform but doesn’t like Ripple – the company – should use Stellar, a Ripple fork made by Jed McCaleb, as it has more of an altruistic vision.
Update December 2020: On December 22nd, 2020, the SEC filed a lawsuit against Ripple INC., The parent company of Ripple, and two of its executives, Christian Larsen and Bradley Garlinghouse (former and current CEOs, respectively). The complaint relates to the raising of over $ 1.3 billion “through the sale of digital assets known as XRP in an unregistered securities offering to investors in the US and worldwide”.
Following the SEC’s announcement, the price of XRP had dropped massively. Major exchanges like Coinbase and Coinmama, to name just two, completed all trading activities for XRP.
2. How to Buy Ripple in 3 Easy Steps
Step 1 – Get a Ripple (XRP) wallet
Before buying XRP, you must first purchase a wallet that can store XRP. As with most cryptocurrencies, you have the option of choosing a software or hardware wallet.
Software wallets are free programs that are usually considered less secure and are therefore suitable for smaller amounts of money.
Hardware wallets, on the other hand, are physical devices that connect to your computer (e.g. a flash drive) and store your private keys on the device itself. They are considered to be the safest form of storing cryptocurrencies.
Desktop & Mobile
Desktop & Mobile
Ledger Nano X – A hardware wallet that can be used to store XRP as well as a number of other cryptocurrencies. It can also connect to your cell phone via bluetooth. You can read my review about it here.
TREZOR Model T – is a hardware wallet with an integrated touchscreen, on which you can store XRP and over 1000 other crypto assets. It is currently only compatible with desktops. You can read my review here.
Edge – Formerly known as Airbitz, Edge is a mobile wallet (iOS, Android) that can store multiple cryptocurrencies, including XRP.
Exodus – A beautifully designed software wallet that supports XRP and over 100 other crypto assets. The wallet also has an exchange for users who wish to exchange XRP for other cryptos and vice versa.
It should be noted that each Ripple wallet must first be funded with a reserve of 20 XRP to protect itself from low-level spam attacks.
Once you have your Ripple wallet, it’s time to create your XRP address which you will need later. An XRP address is a 25 to 35 character string that begins with an r and is case-sensitive. For example: rPspuKM5rCw5EkRDD9vGL816V15DwtSa3L
Step 2 – Find an XRP exchange
There are several ways to buy Ripple today. You can either buy XRP using fiat currency (i.e. USD, EUR, etc.) or exchange bitcoins for XRP on certain exchanges.
Credit / Debit Card, SEPA, Wire Transfer
Credit / Debit Card, Crypto
Credit / Debit Card, Wire Transfer
* eToro users: 75% of retail CFD accounts lose money.
How to buy Ripple with a credit card
With CEX.io, you can quickly buy XRP using your credit card or wire transfer. CEX is a London-based cryptocurrency exchange and has been around since 2013. You can read my full review of CEX here.
Binance is another leading exchange that enables the purchase of certain cryptocurrencies (including XRP) with a credit card. You can read my full Binance review here.
You can invest in XRP with platforms like eToro. However, EToro is less suitable for accessing your coins or sending coins to other people. It is possible to pull the purchased Ripple into your private wallet, but doing so requires additional steps and takes longer.
Put simply, eToro is a great option, especially if you want to speculate on price. You can read my full eToro review here.
* 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford the high risk of losing your money. CFDs are not offered to US users. Cryptoassets are highly volatile, unregulated investment products. No EU investor protection.
Note that while credit card purchases are faster, they also cost more fees. So if you have the option to pay with a wire transfer and you are not stressed out on time, you can get a better price.
How to buy Ripple with Bitcoin (exchange BTC for XRP)
There is consensus across the Ripple community that the cheapest way to buy XRP is to buy Bitcoin and then exchange it for XRP.
The easiest way to exchange Bitcoin for XRP is to quickly exchange it for Binance. Kraken is another popular exchange that allows users to exchange Bitcoin for XRP. However, the verification process takes more time.
Step 3 – Pull your XRP into your wallet
I wouldn’t recommend leaving your XRP on the exchange you bought it from. This is due to the fact that you don’t really control the private key for your coins and therefore they don’t really belong to you.
No matter where you got the coins from, be sure to withdraw them into your own unprotected Ripple wallet (i.e. you will have access to the private key). Once the transaction has been confirmed, you have successfully completed the purchase of Ripple.
3. Conclusion – is Ripple a good investment?
Ripple is likely to appeal to larger banks in the next few years as they offer a rapidly scalable global payment network while reducing transaction fees.
XRP has the potential to generate huge returns on its investment if Ripple continues to advance across the banking sector (and that’s a big if).
Aside from XRP banks, you can also opt for RippleNet, but use IOUs instead of XRP (more on IOUs in the video at the beginning of this post).
While the future of Ripple is promising right now, the future of XRP is still unclear (as is the case with most cryptocurrencies). Remember that where there is a great reward, there is also a great risk. Please ensure that you are investing responsibly as I have described in the past.
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