XRP Review: Where and How to Buy Ripple

History of Ripple: What is XRP

In 2004, Ryan Fugger, a web and decentralized systems developer, was working on a local exchange trading system. The goal was to develop a decentralized monetary system that would allow people to create mediums of exchange for whatever asset they wished, eventually launching a website. In 2012, Jed McCaleb and Chris Larsen approached Fugger with their idea for a digital currency. The system would rely on transactions verified by a consensus process among network users.

Fugger decided to let McCaleb and Larsen take over Ripple, and the pair co-founded OpenCoin, which was later rebranded to Ripple Labs, Inc. when McCaleb left the company less than a year after founding it. They then rebranded again in 2015 to just Ripple.

In January 2013, Ripple released the XRP token, creating 100 billion of them (80 billion were allocated to the company and 20 billion were split between the founders). The 80 billion held by the company has been since held, distributed to partners, given away, and placed in escrow, in various quantities.

Since its release Ripple has attracted many partnerships from banks and other financial entities.

How to Buy XRP Right Now

As with most cryptocurrencies the best way to buy Ripple is through a cryptocurrency exchange. Exchanges are the de facto method of purchasing cryptocurrency and convenient. In the same way you’d buy Bitcoin, you’d simply need to open an account at any of the exchanges we recommend in this XRP review.

• Binance
• KuCoin
• Crypto.com
• Shakepay
• Kraken
• Coinmama
• Huobi
• Bitpanda
• Uphold

How Does Ripple Work: Comparing Transactions for Consensus

Unlike Ethereum or Bitcoin, which use Proof of Stake and Proof of Work consensus methods respectively, Ripple transactions rely on a consensus protocol across the network. The network consists of independent validating nodes that constantly compare transaction records. When a majority of nodes agree upon the current state of the ledger, the transactions are considered valid and consensus is achieved when the nodes apply the same set of transactions to the ledger. The XRP Ledger (XRPL), as it is called, works as a distributed economic system that stores the accounting information of the network participants but also provides exchange services across multiple currency pairs. The XRPL is an open source distributed ledger separate from Ripple.

RippleNet, however, is exclusive to Ripple, and is a three-product suite designed as a payment solution system for banks and other economic bodies and is built on top of the XRP Ledger. The suite consists of three products: xRapid, xCurrent, and xVia.

xRapid: A Liquid Conversion Bridge

xRapid is an on-demand liquidity solution that uses XRP as a global bridge currency between multiple traditional currencies and uses the XRP Ledger in order to enable faster confirmation times and extremely low transaction fees. If John who lives in Canada, wants to send $100 to Jane who lives in Australia, he sends the money to a financial institution that is using xRapid, who converts his $100 CAD to XRP, and then the XRP is converted into the equivalent amount of AUD, which Jane can withdraw almost instantly.

xCurrent: No XRP Needed

xCurrent is a solution designed to provide instant settlement and tracking of cross-border payments between RippleNet members, but it does not use the XRP Ledger or XRP by default. Instead it is built around the Interledger Protocol, which connects different ledgers or payment networks. There are four components to xCurrent: messenger, validator, ILP Ledger, and the FX ticker. The messenger is currently the most used portion of the product, as it allows financial institutions connected by RippleNet to exchange information regarding risk and compliance, fees, rates, payment details, and expected time of funds delivery. However, none of this exchange requires XRP.

xVia: The Simple Payment Network

xVia is an Application Processing Interface that allows banks and other monetary service providers to interact within a single framework without having to rely on multiple payment network integrations. It also allows them to create payments through other banking partners connected to RippleNet and enables them to attach invoices or other information to their transactions.

The Advantages of Ripple: Bank Adoption

The main advantage of Ripple is that it is being adopted by numerous banks and other financial institutions. Moreover, it has cheap, nearly instantaneous transactions, and it has the ability to allow the exchange of any valuable, whether it be a piece of memorabilia or a pair of shoes – or a pair of collectible sneakers.

By using XRP as a bridge currency between other currencies and assets, it creates instant liquidity. If it were to be adopted seriously by banks, they would hold reserves of XRP rather than multiple traditional currencies and be able to complete foreign exchange transactions without the need for multiple accounting measures. The network would work almost instantaneously with nearly zero cost for the transaction, making it attractive to those trying to send money to family or friends in other countries.

The Disadvantages of Ripple: Greedy Holdings

While the potential for cross-border payments with Ripple is fantastic, there are currently multiple disadvantages that present themselves. The company itself still holds a majority of the XRP that was created at launch, and also maintains control over many of the biggest nodes in the network, which has led to questions regarding the true decentralized nature, or lack thereof, of Ripple. The company responded to these issues with a decentralization strategy in 2017, but it has not been updated since then. So, if anyone asks you how to buy Ripple, you can introduce them to one of the exchanges we feature on this page or hope that they know someone at the company who is holding XRP hostage.

The larger concerns would be issues related to competition and utility of the XRP token. While Ripple has been adopted by many financial institutions (around 800), and SWIFT (an industry giant when it comes to cross-border payments that has over 11,000 institutions at its fingertips), if they were to create their own similar product, they would have an easier time deploying their solution across the globe than Ripple and likely render it obsolete.

In addition, companies currently using RippleNet rarely actually use XRP to perform transactions, instead they use the network to communicate with each other and can transfer dollars, Euros, or other currencies without using XRP. In order for the XRP token to truly become valuable, these banks and financial institutions would need to start using it as their funding source for cross-border payments, rather than simply being able to use the communication functions of the network to make their transactions easier. The network itself is currently more valuable than the token in terms of making cross-border payments, which is concerning in the long-term.

How to Buy XRP: Ready to Purchase

Knowing how to buy Ripple is probably the most important step in understanding how this cryptocurrency works. Whether you are planning on sending cross-border payments or are looking to purchase something other than Bitcoin to add to your cryptocurrency roster, you’re halfway there.