If you are wondering how to buy Ripple or any other cryptocurrency perfectly securely, know that you are not alone. Heading into the fascinating world of crypto assets and doing some research to learn when, how and in which token to invest is part of what makes it so interesting, but it can also get fairly confusing. Each currency has its own specificities, both in how it works and in how one can purchase it.
Thanks to ever more numerous partnerships implemented by the Ripple company with such institutional actors as banks from around the world, its currency, XRP, is receiving some undeniable attention.
What is Ripple?
Occupying rank 3 at the international Market Cap just behind Bitcoin and Ethereum, Ripple (XRP) is the official token released by the eponymous company.
The Ripple company established itself as the leader in spontaneous trans-border capital transactions. This was achieved thanks to a protocol which allows funds to be transferred anywhere in the world in a record-breaking time of 3.5 seconds. To that end, the amount in the original currency is exchanged for XRP, sent through the Ripple network and exchanged again for the recipient’s currency of choice. By offering an inexpensive system used to make international transfers more flexible, Ripple can be considered a revolutionary solution.
The Ripple currency is therefore not intended to be substituted for fiat currencies and to become a means of payment for online purchases as Bitcoin aims to achieve. Instead, it is used as an asset by those who wish to invest, to conclude contracts or to carry out financial transactions, as we will see in more detail.
In the crypto world, Ripple is sometimes subject to controversy due to its philosophy and to how it functions. Contrary to many other crypto currencies, XRP can indeed not be mined. The tokens already exist and are instead held by Ripple’s management, which releases them of its own volition. Naturally, this has an impact on the value of the tokens and gives Ripple a lot of control over the situation. Currently, the number of tokens in circulation is estimated at about 39 billion. As for the Ripple company, it holds 6 billion of them, while the remaining 55 billion units are escrowed. Ripple may ask for the escrowed funds to be released whenever all the conditions are met. Trusted third parties oversee the escrow and validate the Ripple’s queries. The validators, selected by Ripple, are institutional entities such as universities, large companies or banks.
While Ripple does rely on a decentralised protocol, it is much less the case regarding the way in which the tokens are released. Moreover, it is impossible for individuals to hold Ripple shares. Investors may buy Ripple in the form of tokens but may not purchase stocks.
Some see XRP as the perfect solution to bridge the gap between traditional finance and crypto currencies. However, others do not seem to recognise Ripple’s legitimacy, their opinion about Ripple being that this currency doesn’t abide by the principles of cryptography. Regardless of the criticism it receives, XRP remains a respected asset which managed to maintain its Market Cap ranking despite the mixed results it achieved in 2019.
The future of Ripple
Before wondering how to buy Ripple, it may be interesting to take a moment to look at how the currency evolved over the last few years. Based on these observations, one can then decide whether they feel like investing in XRP’s future (always within the limits of what they are willing to lose, of course).
At the beginning of 2020, two elements are worth mentioning regarding Ripple:
- A 50 per cent increase in partnerships, which went from 150 to 300 in just a few months
- A significant decrease in the price of XRP, which hit its highest point at €2.52 on the 7th of January 2018 only to drop down to €0.44 a few months later and to reach €0.17 over the last few days of 2019.
This paradox can be explained by the fact that the Ripple company released a large number of tokens onto the market, thus bringing down the currency’s value.
In this case, how to buy Ripple knowing that the company behind XRP carries out operations which could be compared to self-sabotage? By seeing a correlation between this massive release of tokens and the signature of new contracts between Ripple and partners. The company’s CEO has indeed expressed that the development of an ever-growing client base would consolidate Ripple’s value and, by extension, that of its currency. It is therefore not impossible to see Ripple’s price go back up, slowly but surely reflecting the position the company could come to enjoy should its transaction protocol be widely adopted.
As we write these lines, in the beginning of February 2020, Ripple’s price is going up. Still far from the heights it reached in its early days, XRP now barely hovers around $0.3, which is nonetheless a great improvement on its price of $0.18 on the 1st of January 2020.
The currency also maintains its third rank at the Market Cap.
The best ways to buy Ripple
If you are wondering how to buy Ripple to invest in this crypto asset, know that there exist several solutions.
As the third crypto currency just behind BTC (Bitcoin) and ETH (Ethereum), XRP (Ripple) is very well represented on various platforms and purchasing Ripple is relatively easy. Before selecting your preferred solution, do remember to check how high the fees are to be certain that you will get the most interesting price.
Purchasing Ripple from trading platforms
The only true imperative is to go through a well-known site whose reputation and seriousness were tried and tested. Unfortunately, fraudulent platforms flourish all over the web and cause much wrong to those who are new to crypto asset trading.
To protect yourself against these risks, pay attention to how long the trading site has been operating, to the payment methods it supports, to how many registered users it counts and, of course, to its overall reputation. Thanks to a little online research, you should be able to determine whether the platform you are considering is truly legitimate. For instance, it is impossible to look into online exchanges without hearing about eToro, Binance, Coinbase or Bitit. Incidentally, the latter is particularly well suited for those wishing to buy Ripple or invest without necessarily wanting to dedicate themselves to a full-scale trading operation. You can then keep your Ripple – and possibly speculate up – or exchange them for fiat (or another crypto currency) whenever you feel that the time is right.
Thanks to online exchanges, you can purchase XRP using US dollars or even euros and, should you wish to do so, operate using crypto currencies only.
Exchanging another currency for Ripple
As a more advanced trader, you may indeed prefer to do away with fiduciary currencies altogether and operate using crypto assets exclusively. This is possible on several platforms, and potentially gives you access to even more exchanges you may also find interesting.
The most widely represented currency is Bitcoin, which you will be able to exchange for other assets on just about any serious platform.
How to store Ripple securely?
Once you have determined how to buy Ripple and carried out the transaction, you will be holding a currency which you will not be able to store on your bank account. Crypto assets are not available in the form of bank notes and physical coins either. Fortunately, several storage options are available to help you keep your crypto assets safe.
Storing XRP on an exchange platform
Many exchange platforms will offer you to store your crypto currencies online. The principal (and probably the only) advantage this solution offers is that you can have access to your XRP (or other currencies) right where you use them. It is therefore not necessary to transfer your currency onto the platform if you wish to make a transaction.
The main drawback, and by no means the least, is that the platform is the only entity with access to the private keys that unlock the wallets they put at their users’ disposal. This means that the service provider is also the official holder of – and therefore has full control over – your currencies. And since the platforms which provide this service often hold the equivalent of billions of euros, they are targeted by hackers on a regular basis. In 2013, MtGox lost 750,000 Bitcoin (or several billion US dollars) to hackers. And in 2018, that same thing happened to CoinCheck, with a $500 million loss.
Storing XRP on a Ripple wallet
Once you have decided how to buy Ripple, you can also store it online without necessarily having an exchange be in charge of your tokens. While the official Ripple Wallet ceased to exist as of 2016, the wallets this service used to handle were moved to the Gatehub platform, which is now the solution Ripple officially recommends for XRP storage. The virtual wallet supports two-factor authentication (2FA) and provides satisfactory levels of security.
Another alternative consists in storing your virtual wallet private key on a desktop computer. ‘Desktop Wallets’ are halfway between online and offline storage options. More secure, these wallets also offer a solution to store XRP on one’s computer anonymously. When opting for a desktop wallet, however, being particularly vigilant regarding malware is essential. Should the machine get hacked, the consequences would indeed be disastrous.
Storing XRP on an electronic Wallet
Finally, and this is without a doubt the safest storage solution for your crypto currencies, there exist several ‘hardware wallet’ solutions. Much like USB memory sticks, the electronic wallets provide a means of storing your tokens entirely offline. Such models as the Ledger Nano S or the Trezor offer very high levels of security, as the private keys are encrypted straight onto the devices. That way, even when the wallet is connected to a compromised computer or smartphone, no malware can reach its contents.
These advanced token storage solutions do have a cost, but for those who wish to be able to put their trust in a wallet, there is nothing safer to this date.
It is necessary to ask oneself several questions before deciding how to buy Ripple. However, through a little research, you will be able to make the choices that work for you and to manage your XRP in your own way. The only simple rule to keep in mind is the following: never invest what you are not willing to lose.