Ripple – A New Way to Send Money

Sending money around the world using USD Dollars, Euros, or any other fiat currency – is a pain in the neck. There are numerous hoops you must jump through with the bank, and then – if you’re lucky, the bank might just process your application in 24 to 48-hours. Sometimes, you can wait for up to a week for a wire transfer to land in your recipient’s account.

Ripple (XRP) was the first cryptocurrency to focus on the payment environment. The goal of the company was to provide an alternative borderless payment system. Using Ripple, customers can send money anywhere in the world almost instantly.

When you send money with your bank, it not only takes forever for the transaction to clear, but they charge you a fortune for using the service, especially if it’s an international transfer. With Ripple, you get a fast clearing time, and rock-bottom fees that are a fraction of what you would pay in the traditional fiat banking system.

Ripple offers plenty of utility for crypto enthusiasts. Let’s unpack the company’s offering in this review of XRP.

What is Ripple?

Chris Larsen, Jed McCaleb, and Arthur Britto launched Ripple back in 2012. Ripple started in 2005 as a payments service called “RipplePay.” Jed McCaleb, formerly involved with MtGox, started writing a paper on the eDonkey Network, a file-sharing network. With the help of David Schwartz, the pair launched XRP in May 2011.

Fugger agreed to pass ownership of RipplePay to the team, and then the team rebranded to “OpenCoin.” Unfortunately, OpenCoin didn’t take off as the team expected, and they had to rebrand one more time. This time the team chose to move back to Ripple but calling themselves “Ripple Labs” after a capital injection from Roger Ver and Andressen Horowitz, as well as other investors into the project.

Ripple launched officially in 2012, and in 6-years, XRP has achieved a dominating spot in the crypto sphere. Ripple continues to grow, establishing new protocols that continue to help it scale into the new demands of the market. Adopting the Ripple Consensus Ledger (RCL), as well as the Interledger Protocol (ILP), helps to produce faster and cheaper cross-border payments.

How Does It Work? – What are the Features of Ripple?

Ripple is essentially a payments network. Some of the key features XRP brings to the crypto environment include the following.

  • Near-zero costs on transfers
  • Instant settlement
  • Scalable solution
  • Excellent liquidity
  • Decentralized reporting and ledge systems

What are the Advantages and Disadvantages of Ripple?

Here are the pros and cons of XRP, one of the world’s leading crypto payment tokens.

Pros of Ripple

  • Revolutionizes cross-border payments – Why wait for days at the bank for expensive transfers? With XRP, you can send money instantly, anywhere in the world. The Ripple Payments Blockchain and payment protocol make transactions instantaneous, secure, and traceable.

  • Gaining appeal – More than 100 institutions from around the world use Ripples payments network, with thousands more ready to join.

  • Affordable payments – Save money on the costs of your international transfers.

Cons of Ripple

  • Pre-mined allocation – Unlike coins such as Bitcoin and Litecoin, all the Ripple stock is already in circulation. Therefore, there is a predetermined supply. With all the stock “Above ground,” there is potential for whales that control large segments of the stock, to move its price.

  • Government intervention – XRP runs in direct competition with the SWIFT money sending service that forms the backbone of the international financial system. If XRP were ever to present a threat to SWIFT, we imagine that the government would step in and act against XRP.

  • Ripple has a circulating supply of $44-billion. Therefore, it has plenty of coins at a low price. With this kind of volume and the low price, we can expect movements in the currency to be small. If you’re looking for a coin to trade, the XRP won’t have the volatility you need to make money.

How do I Buy Ripple?

To purchase XRP, you’ll have to visit an exchange and trade your fiat currency for crypto. There are hundreds of exchanges available online, and choosing the right one depends on your needs. If you’re looking to trade XRP on the open markets against other crypto pairs, then use an exchange like Kraken that specializes in that pair.

However, if you’re not an American passport holder, and you want to send XRP to a family member in a non-US regulated territory or country, then use a platform like Binance for cheaper fees.

What are the Recommended Exchanges for Trading Ripple?

If you want to purchase XRP, you can do so at a crypto exchange. If you’re going to buy with your credit card or in fiat currencies like the US Dollar, then you’ll probably have to use a regulated exchange like Kraken.

Kraken offers a wide range of pairs for trading as well. Since it’s an unregulated exchange, there is limited KYC requirement, until you need to make a withdrawal. If you want to make a withdrawal from Kraken, you’re going to need to submit a copy of your photo ID and your proof of address. After verification, the exchange will approve your account and change your daily withdrawal and deposit limits.

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Should you Invest in Ripple?

No, XRP is not an investment-type crypto vehicle. Whereas Bitcoin has exposure to price volatility, XRP’s exposure is limited. Bitcoin may have trading ranges of hundreds of dollars in a single day, while XRP only sees a few dollars or cents of movement on a trading day.

Bitcoin is more of a speculative asset, whereas XRP is a vehicle for sending money around the world.

How Does Bitcoin Compare to Ripple?

Bitcoin is a very different crypto asset to XRP. XRP has a specific purpose – to act as a medium to send funds internationally or locally. Think of XRP as a payments service with low fees and instant transaction times. Bitcoin is anything but that. Most Bitcoin transactions cost more than $1, and while that’s cheap, it’s not as affordable as XRP transactions.

Bitcoin transactions can take anywhere from 4-hours, to a few days for the funds to show up in the recipient’s wallet. The number of transactions on the Blockchain and the size of the transactions play a role in processing times. With XRP, you get an instant transaction service, regardless of your location in the world.