How To Buy XRP (XRP)?
A common question you often see on social media from crypto beginners is “Where can I buy XRP?” Well, you’ll be happy to hear it is actually quite a simple and straightforward process.
Step 1: Create an account on an exchange that supports XRP (XRP)
First, you will need to open an account on a cryptocurrency exchange that supports XRP (XRP).
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In order to sign up, you will need to enter some basic information, such as your email address, password, full name and, in some cases, you might also be asked for a phone number or address.
Note: On specific exchanges, you might need to complete a Know Your Customer (KYC) procedure in order to be able to purchase cryptocurrency. This is most commonly the case with licensed and regulated exchanges.
Step 2: Deposit funds into your account
Many cryptocurrency exchanges will allow you to purchase XRP (XRP) with fiat currencies, such as EUR, USD, AUD and others. Furthermore, they will also provide you with multiple deposit methods through which you can fund your fiat account, such as credit and debit cards, ewallets or direct bank transfers.
Note: Some payment methods will have higher fees than others, such as credit card payments. Before funding your fiat account on your chosen exchange, make sure to do your due diligence to find out the fees involved with each payment method to avoid unnecessary costs.
Step 3: Buy XRP (XRP)
This process is similar across almost every cryptocurrency exchange. All you have to do is find a navigation bar or a search bar, and search for XRP (XRP) or XRP (XRP) trading pairs. Look for the section that will allow you to buy XRP (XRP), and enter the amount of the cryptocurrency that you want to spend for XRP (XRP) or the amount of fiat currency that you want to spend towards buying XRP (XRP). The exchange will then calculate the equivalent amount of XRP (XRP) based on the current market rate.
Note: Make sure to always double-check your transaction details, such as the amount of XRP (XRP) you will be buying as well as the total cost of the purchase before you end up confirming the transaction. Furthermore, many cryptocurrency exchanges will offer you their own proprietary software wallet where you will be storing your cryptocurrencies; however, you can create your own individual software wallet, or purchase a hardware wallet for the highest level of protection.
For more in-depth instructions, our ‘Absolute Beginner’s Guide To Cryptocurrency Investing‘ will take you through the process step-by step. In addition to providing instructions for sending and receiving your cryptocurrency.
And if you’re completely new to crypto our beginner, intermediate and advanced level articles will get you up to speed with everything you need to know about the cryptocurrency space starting out.
What Is XRP (XRP)?
To begin with, it’s important to understand the difference between XRP, Ripple and RippleNet. XRP is the currency that runs on a digital payment platform called RippleNet, which is on top of a distributed ledger database called XRP Ledger. While RippleNet is run by a company called Ripple, the XRP Ledger is open-source and is not based on blockchain, but rather the previously mentioned distributed ledger database.
The RippleNet payment platform is a real-time gross settlement (RTGS) system that aims to enable instant monetary transactions globally. While XRP is the cryptocurrency native to the XRP Ledger, you can actually use any currency to transact on the platform.
While the idea behind the Ripple payment platform was first voiced in 2004 by Ryan Fugger, it wasn’t until Jed McCaleb and Chris Larson took over the project in 2012 that Ripple began to be built (at the time, it was also called OpenCoin).
In 2011, three engineers—David Schwartz, Jed McCaleb and Arthur Britto—began developing the XRP Ledger.
Fascinated by Bitcoin, they set out to create a better version that improved upon its limitations—with the goal of creating a digital asset that was more sustainable and built specifically for payments.
The XRP Ledger first launched in June 2012. Shortly thereafter, they were joined by Chris Larsen and the group started the Company OpenCoin in September 2012 (now named Ripple).
The founders of the XRP Ledger gifted 80 billion XRP to the company. Ripple has since sold some of its XRP and put the rest in escrow.
RippleNet’s ledger is maintained by the global XRP Community, with Ripple the company as an active member. The XRP Ledger processes transactions roughly every 3-5 seconds, or whenever independent validator nodes come to a consensus on both the order and validity of XRP transactions — as opposed to proof-of-work mining like Bitcoin (BTC). Anyone can be a Ripple validator, and the list is currently made up of Ripple along with universities, financial institutions and others.
The XRP Ledger (XRPL)
The XRPL works as a distributed economic system that not only stores all the accounting information of the network participants but also provides exchange services across multiple currency pairs. Ripple presents the XRPL as an open-source distributed ledger that allows for real-time financial transactions. These transactions are secured and verified by the participants of the network through a consensus mechanism.
The XRPL is managed by a network of independent validating nodes that constantly compare their transaction records. Anyone is able to not only set up and run a Ripple validator node but also to choose which nodes to trust as validators. However, Ripple recommends its clients to use a list of identified, trusted participants to validate their transactions. This list is known as the Unique Node List (UNL).
The UNL nodes exchange transaction data between each other until all of them agree on the current state of the ledger. In other words, transactions that are agreed upon by a supermajority of UNL nodes are considered valid and the consensus is achieved when all these nodes apply the same set of transactions to the ledger.
According to Ripple’s official website, Ripple is a privately held company that founded the development of the XRPL as an open-source distributed ledger. This means that anyone can contribute to the code and that the XRPL is able to continue even if the company ceases to exist.
In contrast to XRPL, the RippleNet is exclusive to the Ripple company and was built on top of the XRPL as a payment and exchange network.
The RippleNet currently offers a 3-product suite that is designed as a payment solution system for banks and other financial institutions. Currently, RippleNet has three major products: xRapid, xCurrent, and xVia.
Let’s take a simple example. Bob from Australia wants to send $100 to Alice who is based in India. Bob transfers the money via a financial institution called FIN. In order to perform the transaction, FIN uses the xRapid solution to create a connection with asset exchanges in both the originating and destination country. This way, the company is able to convert Bob’s $100 to XRP, which provides the necessary liquidity for the final payment. In a matter of seconds, the XRP is converted to Indian Rupees and Alice is able to withdraw the money from the asset exchange located in India.
xCurrent is a solution designed to provide instant settlement and tracking of cross-border payments between RippleNet members. Unlike xRapid, the xCurrent solution is not based on the XRP Ledger and does not use the XRP cryptocurrency by default. The xCurrent is built around the Interledger Protocol (ILP), which was designed by Ripple as a protocol for connecting different ledgers or payment networks.
The four basic components of xCurrent are:
- Messenger – The xCurrent messenger provides peer-to-peer communication between connected RippleNet financial institutions. It is used to exchange information regarding risk and compliance, fees, FX rates, payment details and expected time of funds delivery.
- Validator – Validator is used to cryptographically confirm the success or failure of a transaction and also to coordinate moving of funds across the Interledger. Financial institutions can run their own validator or can rely on a third-party validator.
- ILP Ledger – The Interledger Protocol is implemented into existing banking ledgers, which creates the ILP Ledger. The ILP Ledger functions as a sub-ledger and is used to track credits, debits, and liquidity across transacting parties. Funds are settled atomically, meaning that they are either settled instantly or not at all.
- FX Ticker – FX ticker is used to define exchange rates between transacting parties. It tracks the current state of each configured ILP Ledger.
Although xCurrent is primarily designed for fiat currencies, it also supports cryptocurrency transactions.
xVia is an API-based standardized interface that allows banks and other financial service providers to interact within a single framework – without having to rely on multiple payment network integrations. xVia allow banks to create payments through other banking partners that are connected to RippleNet and also enables them to attach invoices or other information to their transactions.
20 XRP is required to activate a new address.
This requirement can later be changed by the validators through the voting process. The reserve requirement protects the XRP Ledger from spam or malicious usage.
When you are sending XRP to an exchange, destination tag is very important. Destination tag is not needed when you transfer XRP to your own wallet.
Official website: https://xrpl.org/