5 Things to Consider If You Want to Buy Ripple
Purchasing Ripple is an attractive proposition for many individuals, but it's not something that you should enter into without researching the subject adequately first. There are five key factors that we believe you should particularly consider if you're thinking about purchasing this cryptocurrency. Taking these issues into consideration will help to ensure that any transactions can be completed as safely and quickly as possible, and that the likelihood of making money from your investment will be increased.
Carefully choose your preferred secure payment method
There are many secure payment methods available with XRP, as the mainstream financial architecture has begun to embrace this highly flexible token. This means that most payment methods for Ripple should be supported, although this is dependent on the location in which you are purchasing the cryptocurrency.
You also need to understand certain factors associated with XRP, such as speed and fee schedule. These issues should definitely be taken into consideration during the purchasing process, as they will affect its efficiency and overall expense.
Will you need to set up your own wallet?
In order to store XRP, it is necessary to be in possession of a Ripple wallet. This is an independent and separate piece of software/hardware that effectively secures your funds. Naturally, it's not anything like a physical wallet in the real world! These contain a highly complex piece of software, which encrypts your tokens, and makes it impossible for hackers to steal them.
It should also be noted that users entering into CFD agreements via recommended brokers won't necessarily need wallets. The CFD agreement effectively secures any transactions and funds, which finds it favoured by many Ripple investors.
The Ripple network is renowned for offering some of the lowest fees and costs within the mainstream financial system. It is reasonable to assert that Ripple has become part of this system, even though it is still an embryonic project. But, you should still take into account any fees or costs associated with transactions before committing to any particular purchase or investment.
Safety and security
Transactions on Ripple are quicker and cheaper than Bitcoin, but how does the system compare in terms of safety and security?
The most important thing to note about Ripple is that it doesn't have a blockchain. Instead, it relies on its protocol consensus algorithm, which uses a system of nodes to ensure that transactions are verified. This means that the usual Proof-of-Work and other algorithms associated with cryptocurrencies don’t apply to Ripple.
Additionally, the XRP Ledger associated with Ripple uses several encryption algorithms. These include secp256k1 and ed25519. It is likely that the XRP Ledger will be expanded in the future in order to keep up with developments in cryptography.
Can you understand and navigate the platform?
Ripple is an extremely professional project, which means that the platform is user-friendly and easy to navigate. The long-term intention is for it to become a mainstream system for foreign exchange and overseas payments, and this means that it needs to be as intuitive as possible, which has certainly been achieved.
Ultimate Beginner’s Guide to Trading Ripple
What is a Ripple Broker?
In the simplest terms, brokers execute trades for clients, working as intermediaries between investors and the financial system. Brokers have worked within finance for many decades, but they have become increasingly popular and accessible in recent years.
Brokers working in cryptocurrencies, such as Ripple, are also increasingly common, owing to the popularity and value of this medium. As XRP has become established as one of the top 3 cryptocurrencies, virtually any broker working in the crypto niche will work with this token and system.
What is a Ripple CFD?
CFD is a commonly used acronym in the financial world, which stands for Contract for Difference. It refers to one of the trading mechanisms that are available with cryptocurrencies, and indeed other commodities and assets. What CFD contracts enable is for investors to enter into speculative transactions based on the future price of Ripple; providing a buying and short-selling option.
Trading CFD contracts can be considered advantageous, as it enables investors to profit in all market conditions. Naturally, if an investor were to purchase Ripple, and then the price of the cryptocurrency was to decline, this would effectively lose money, at least in the short-term. Whereas a CFD contract enables investors to predict the future price realisation of the cryptocurrency.
CFD contracts also make it possible to trade via margin, which means that you can use money that you haven't borrowed in order to increase your profit.
What is the Benefit of Regulation?
From its inception, Ripple has aligned itself with the authorities and existing financial architecture more than any other cryptocurrency. This has been beneficial for the project as it has inevitably been more embraced by established players in the world financial system.
The regulation of Ripple, and indeed the cryptocurrency niche, has lent further credibility to the platform. What regulation effectively does for investors is ensure that their money is safe and secure, and that they can recover if there is an unfortunate incident or theft.
Regulation of the cryptocurrency niche has been beneficial to its image and reputation, and Ripple has been one of the major recipients of this phenomenon.
What is the Best Payment Method for Buying Ripple?
As a popular cryptocurrency, Ripple is purchasable via several different payment methods. However, these can differ depending on location, so it is important to research the options available before investing or buying.
Buying Ripple with PayPal
PayPal has become an increasingly common presence in the global financial system, but it is not always the best option for purchasing XRP.
Firstly, PayPal does attract certain fees, so this can be a problem for those who wish to make transactions as cheap as possible.
And another problem is that not all sources will accept PayPal, even though it is an increasingly common method of payment.
But PayPal is still a convenient payment method that will suit some investors.
Purchasing with Cash
This would be the ideal way of purchasing Ripple, as cash obviously attracts no fees. Unfortunately, the only way that you can purchase XRP by cash would be via a private arrangement. In practical terms, it is basically impossible to purchase XRP via cash.
Via Bank Transfer
Bank transfers are certainly attractive to Ripple investors, they also hardly ever attract fees. However, getting the money from the bank can take some time, and this can be disadvantageous, while it will also provoke some exchanges to deny this payment method.
Buying Ripple with Credit Cards or Debit Cards
Another option for purchasing Ripple is via credit and debit cards. These have the advantage of being accepted by almost all exchanges, but they do tend to involve higher fees than other payment methods, particularly when using credit cards.
The Verification Process for Trading
Ripple is considered one of the most mainstream and secure cryptocurrencies, so any trading will require some form of verification. This usually entails confirming address and ID, and it usually also requires some form of government identification and documentation, such as passports and driving licences.
Long vs Short Term Investment
Investing in Ripple in the short-term involves predicting the peaks and troughs in the value of the digital currency, and investing on this basis over a short period of time. It is rather similar to what is often described in the financial system as day trading. Conversely, longer-term investment in Ripple involves buying and holding the digital currency over a period of time, in order for market fundamentals to realise themselves.
The first of these two strategies is definitely more likely to deliver a quick profit. But effectively betting on the short-term fluctuations in price of a particular token is rife with uncertainty. A longer-term strategy requires a more fundamental understanding of the financial system, as well as the Ripple project. But it can be considered a safer and more secure bet, while investors also have the advantage of holding the digital currency as a physical medium.
Why Buy, Rather Than Trade?
Trading Ripple appeals to many investors due to its simplicity, but there are advantages to buying the cryptocurrency instead.
Firstly, by purchasing Ripple, an investor gains access to what is a physical commodity, similar to the way that many investors choose to hold gold and silver coins. This is considered to be a sound strategy in times of economic uncertainty, recession, and depression.
Purchasing Ripple and holding it over a period of time also means that investors are less vulnerable to short-term fluctuations in the market. While the cryptocurrency niche has calmed down considerably, it is yet to reach true maturation, which means that it remains somewhat volatile at the time of writing. In buying Ripple, you circumnavigate this process and make a fundamental investment in the medium.
By purchasing XRP, you also retain control over your own tokens at all times. While brokerages and exchanges are increasingly credible, and many of them will be part of the financial architecture for decades to come, it is not unheard of for these platforms to go bust and disappear. When you hold your own tokens, you eliminate any concerns associated with this potential outcome.
Ripple also has the ability to be exchanged via any currency or valuable commodity with a unified minimal commission. This makes it a very attractive investment prospect.
Despite the advantages of purchasing, it should also be understood that this is a complicated process, which should not be entered into without a significant amount of investigation and education. You must understand such processes as setting up wallets and understanding online security related to cryptocurrency while checking software and system compatibility with Ripple is also essential.
What Fees Are Involved?
There are fees associated with all of the various activities that you may wish to carry out with Ripple, but these tend to be relatively negligible.
Transaction costs associated are virtually non-existent, being equal to a tiny fraction of a single cent. Some exchanges will charge you for holding XRP in wallets, though, so you should certainly shop around to find the best deal.
Deposit fees vary depending on the outlet but are standard across the entire range of cryptocurrencies.
While some exchanges charge withdrawal fees, there are many that do not charge for this functionality. So it definitely pays off to seek out the exchanges that allow you to withdraw for free.
Safely Storing Your Ripple
In order to safely store Ripple, it is essential to use the right wallet. These specialised forms of software and hardware help to ensure that your coins are kept safe from theft and hacking.
Web wallets are built into brokerages and exchanges, in order to ensure that these platforms provide all of the functionality required to use cryptocurrency. They sound great in principle, but in practice, the security provisions associated with these wallets are not as stringent as some of the other options available. Exchanges could be hacked, and some cryptocurrency exchanges have liquidated, so this should certainly be considered carefully before committing to a web wallet.
Mobile wallets are used with mobile devices and offer convenient access. However, they can be somewhat vulnerable to nefarious users gaining access to your mobile device. Popular mobile wallets include Samourai Wallet, Mycelium, Airbitz, Edge and Abra.
Desktop wallets are less convenient than mobile wallets, but offer improved security. Held on desktop computers, these wallets include advanced encryption and protocols, such as 2FA, which make them difficult to crack. The downside is that they cannot be used on the go, as is the case with mobile and web wallets. Desktop wallet options for Ripple include Exodus, Electrium and Ripple Armory.
Hardware wallets are generally considered to be the most secure of the wallet options, due to the fact that they have no reliance on software. This pretty much eliminates any vulnerabilities from the process of storing Ripple. This form of wallet is also invulnerable to any viruses or worms so long as they are kept offline, while users also have the opportunity to validate the entire operation of their wallet system.
Two of the most popular hardware wallets for Ripple are Ledger Nano X and TREZOR T.
Some brands provide versions for both desktop and mobile wallets as well as being compatible with leading ‘cold’ wallet brands. These are usually capable of interacting with one another, and so provide a perfect balance between security and convenience.
What Other Coins Can I Trade or Use to Buy Ripple?
All of the other major cryptocurrencies can be used to buy or trade Ripple, as well as a host of fiat currencies.
What’s the Smallest and Largest Amount of Ripple I Can Buy?
XRP is comprised of a whole number followed by 8 decimal points. Therefore, the smallest amount that you can own is 0.00000001 XRP, which equates to virtually nothing in monetary terms! There is no upper limit on the amount of Ripple that you can purchase.
Can I Buy Ripple Anonymously with no ID? Is it Safe and Legal?
There is no real way of buying XRP anonymously, the project was never designed to facilitate such transactions, but it is perfectly safe and legal. It has been endorsed by the mainstream financial architecture arguably more than any other cryptocurrency, which means that anonymity is not a part of its overall ethos. Purchasing Ripple involves confirming your identification, which can usually be done with address and government identity documents.
Will Buying Ripple Make Me Money?
Many people believe that the long-term upside for Ripple is extremely encouraging. But this depends on prevailing market conditions. Certainly, the Covid-19 crisis has had a huge impact on the global economy, and it remains to be seen what sort of influence this will have over XRP and other cryptocurrencies.
However, with Ripple having already made connections with the likes of MoneyGram, MercuryFX, IDT, Cuallix, Western Union, Cambridge Global Payments, Currencies Direct and Viamericas, it seems that the future is extremely bullish for this highly credible cryptocurrency token.
How to Spend Your Ripple
Ripple can be used as a unit of exchange with retailers, and this is even more commonly true with online stores. However, the best way to use it is as a medium of foreign exchange and cross-border payment system, which is where its founders believe that the token will gain the most acceptance in the years to come. And, finally, it can always be exchanged for fiat currency.
How to Sell Your Ripple
There are several options available for selling Ripple, but most investors choose exchanges and brokers. Selling tokens is one of the most fundamental reasons for the existence of exchanges, while brokers will also execute these trades for you. It is also intended to execute private transactions, so this can always be arranged as well, but this does require some technical knowledge of the medium.
Finally, it is important to mention that selling Ripple held in a CFD is considered more convenient, as these contracts are traded on a widespread basis within the existing financial architecture and global system.