Ripple is an open-source global system of payments, settlements, and exchange aimed at empowering financial institutions with the benefits of advanced blockchain technology. Ripple’s native currency XRP facilitates real-time transactions without needing a central intermediary.
Due to the growing popularity of the digital assets sphere, several Ripple exchanges aimed at facilitating seamless crypto buying/selling have emerged in recent years. These exchanges offer a wide range of features along with security for both new and experienced users.
Here is our guide to choosing the best Ripple exchanges in 2021.
Our List of The Top Ripple Exchanges
Ripple’s XRP is the third-largest cryptocurrency by market capitalisation and hence is offered by most cryptocurrency exchanges. However, choosing the Ripple exchange that fits your requirements and caters to your needs can be confusing. Here is our list of the top Ripple exchanges based on unique features and benefits.
What is a Ripple Exchange?
A Ripple exchange is a platform that allows users to trade XRP for other cryptocurrencies and vice versa. Ripple exchanges are intermediaries who match buyers and sellers of digital assets for a commission fee. XRP runs on a Real Time Gross Settlement System which is a currency exchange and remittance network that is validated by independent servers. Ripple exchanges’ unique selling proposition is the avoidance of huge fees and wait times often associated with banks.
Users can access various options and functions based on the type of Ripple exchange. Some exchanges cater specifically to the needs of new investors whereas others offer advanced features for seasoned users. They also differ in speed and privacy policies.
How do Ripple Exchanges Work?
You can register an account on any Ripple exchange by filling a sign-up form on the exchange’s official website. Most platforms are beginner-friendly and only require you to enter personal details such as your name, email address and phone number. Based on your local laws, the platform will then require more details to verify your identity.
Cryptocurrency exchanges follow strict Know Your Customer (KYC), and Anti-Money Laundering (AML) guidelines while completing the process of identity verification. You can verify your identity either through a government-issued photo identity document or through a utility bill. All regulated exchanges require users to complete identity verification to withdraw any funds from the account to protect consumers from fraud. It is very risky to go through an unregulated exchange that allows users to bypass KYC regulations as such platforms lack oversight.
Once your account is verified you can start buying or trading XRP. Fund your account using the payment methods supported by the exchange and after the funds are in the account, navigating the platform and buying/selling is very straightforward.
You can either store the coins on the platform or withdraw to a private wallet using a method of your choice. Most Ripple exchanges offer 24/7 active customer support through executives who can be contacted if there are any issues.
Using an Exchange Vs a Broker
A cryptocurrency exchange is similar to the traditional stock exchange as it acts as a middle-man between buyers and sellers who buy/sell based on the current market price of the cryptocurrency. Crypto exchanges charge a transaction fee and are popular among average users who don’t deal in large amounts. A crypto exchange allows you to buy, sell and store crypto tokens and is a great option for long term storage of the currency.
However, for high-volume trades, crypto brokers are the most preferred choice. Ripple brokers offer a wide range of benefits and are hence perfect for seasoned traders. Crypto brokers offer greater flexibility and the option to trade the derivatives of a main asset like Ripple. They offer the ability to trade CFDs, options, and futures.
Types of Exchanges
This section explores the functioning, advantages and disadvantages of the various types of cryptocurrency exchanges:
- Centralised Exchanges
Centralised exchanges are intermediatory platforms that allow users to buy, sell and store cryptocurrency for a nominal transaction fee. They are beginner-friendly, easy to use and navigate, especially compared to the advanced features offered by decentralised platforms. Centralised exchanges are highly regulated and strictly follow AML and KYC norms that protect consumers from the dangers of fraud.
Centralised exchanges run on private servers and are thus vulnerable to attack. However, it is crucial to note that deals on centralised exchanges are not tracked on a blockchain and hence such exchanges are often deemed to be against the spirit of cryptocurrency.
- Decentralised Exchanges
Decentralised exchanges eliminate the need for an intermediatory by directly facilitating peer-to-peer (P2P) trading. The funds of a decentralised exchange are stored on a blockchain and are hence more secure than their centralised counterparts.
Further, decentralised exchanges are not regulated and allow users to trade anonymously and freely use the platform. However, it is crucial to remember that decentralised exchanges are advanced and hence require some amount of knowledge on the workings of the crypto market. Further, decentralised exchanges have had issues with liquidity that might be problematic for high volume users.
- Local exchanges
Local cryptocurrency exchanges allow users to buy and sell crypto on their terms, using any payment method. It is convenient, easy-to-use, and has a simple infrastructure. The platform enables you to exchange tokens directly with another person, sidestepping slow middlemen. You can chat with the prospective buyer/seller without revealing your details and conduct seamless transactions in a matter of minutes.
- Fiat exchanges vs Pure exchanges
Fait exchanges are platforms that enable you to buy cryptocurrency using fiat money like dollars or euros. These are designed for beginners and provide a crucial insight into the functioning of the crypto market. Pure exchanges facilitate only crypto-to-crypto transactions.
Key Things to Consider When Choosing The Best Ripple Exchange
Now that we have understood the meaning and functioning of Ripple exchanges and the different types of exchanges that you can use, it is important to understand a few crucial factors on which you should examine the top Ripple exchanges before making a final choice.
Before you begin, it is important to first understand your local crypto and tax laws and understand the legality of a particular crypto exchange in your region. Knowing how much tax you will have to pay on your earnings is also certainly helpful in ensuring you make the right trading decisions in the long run.
Transaction fees must play a significant role in choosing a suitable exchange as they can eat into a huge chunk of your profits. Transaction speed is also crucial as it greatly impacts your trading potential in the volatile crypto market. Generally, centralised exchanges have higher transaction speed than decentralised exchanges.
Security is another important consideration. While the first step is to choose an exchange that can enable two-factor authentication to your account to protect it from unauthorised use, it also important to understand how your data is protected by the exchange. Further, it is important to consider how your funds are stored and what insurance benefits are offered by the particular exchange before making a final call.
Pros and Cons of Using Ripple Exchanges
Ripple exchanges allow users to buy/sell and store cryptocurrencies like XRP in real-time. Registration is simple and most platforms are user-friendly and offer seamless transactions. However, different digital currency exchanges offer different benefits and it is important to understand them before investing through the platform.
Security of the platform, design and usability, convenience, transaction fee and speed are a few factors based on which you can evaluate top Ripple exchanges. You should also choose whether you want to go for the highly liquid and fast centralised exchanges or the privacy and safety of the blockchain-powered decentralised exchanges. It is also crucial to remember to always refer to your local crypto laws when in doubt and invest only what you can afford to lose.
Frequently Asked Questions
Ripple is an open-source blockchain platform aimed at uniting financial institutions through the benefits of decentralisation. XRP is Ripple’s native cryptocurrency.
You can create an account by signing up on the exchange’s official website, verifying your identity and transferring funds to your online wallet.
You can verify your identity either through a government-issued photo identity document or through a utility bill.
The KYC process is a mandatory requirement for all regulated exchanges and protects consumers from fraudulent entities.
As long as you deal with regulated platforms that verify identity using KYC procedure, your funds should be safe. Ensure that you also make use of 2FA and other security features.
You can withdraw your tokens to your wallet by paying a small withdrawal fee.
Transaction fee percentage, speed of transaction, security, design and payment methods are some of the key criteria to choose the Ripple best exchange.
You can contact the customer support by phone or email to help you sort out any potential issues