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If you’re interested in using blockchain technology to send money to someone on the other side of the world, Ripple could be the solution you’re looking for.
It has a number of advantages over many of its competitors, and it supports XRP, the third-largest cryptocurrency by market cap.
The following guide will introduce you to Ripple, tell you how to use it, and help you decide if it’s right for your purposes.
The history of Ripple
The idea of XRP as a common currency that could be shared among banks first came about in 2003 when Ryan Fugger, creator of Ripplepay, started developing his own financial system. The original idea was that people would come together and use their mutual trust to form a network through which they could trade any currency they wished.
This was similar to how information sharing was possible within open source networks like Wikipedia. You can edit whatever you want with no restrictions on who made it or where it came from. If someone wanted to contribute something valuable, they could do so without worrying about being paid back because there is an underlying sense of trust in these communities.
In theory, money should work exactly like that too. For example, if I lend my friend $10 for lunch today and she pays me back tomorrow, then we both have $10 worth at some point in time-we don’t need a bank to make sure we’re not trying to cheat each other.
But what if my friend doesn’t pay me back? What if I want to lend $10 to someone else? How do I know that person will pay me back?
These are all problems that existing financial systems solve by introducing middlemen such as banks. They keep track of who has what and make sure everything runs smoothly. But these middlemen also take a cut along every step of the way, meaning less money gets into your pocket.
By removing these intermediaries, Ripple allows anyone to send anything of value anywhere in the world instantly and nearly free of charge. The only thing needed is an internet connection.
How to Use Ripple to Make Near-Free Global Transactions
Nearly every payment service provider offers international money transfers, but they often come with high fees. And using bitcoin or another cryptocurrency is not a viable alternative due to slow transaction speeds and cost.
Enter Ripple, a distributed network that allows users to transfer nearly any currency on earth – including fiat currencies, cryptocurrencies, commodities, and even frequent flier miles – in an instant, without chargebacks, and at a minimal cost. Here’s how it works: Say you want to send $1,000 from New York City to London.
You can use Ripple’s native token XRP (the third-largest cryptocurrency by market cap) as a bridge asset between dollars and pounds.
Using Ripple, you would first convert your dollars into XRP tokens. Then, you would instruct your bank to make a cross-border payment in British pounds, which would instantly be converted into XRP tokens. Finally, Ripple would convert those XRP tokens back into Pounds Sterling and complete the transaction from its end.
In other words, instead of paying for three separate transactions – converting U.S. dollars into British pounds; sending British pounds across borders; converting back to Pounds Sterling – all parties involved pay only one fee for a single transaction completed over Ripple’s distributed ledger technology.
Will you buy Ripple now?
Ripple is a fast-growing cryptocurrency, which may explain why so many crypto enthusiasts want to know how they can buy XRP. The two most popular options are Coinbase and Kraken.
Since these exchanges don’t allow you to buy XRP with fiat currency (i.e., USD), you will first need to purchase BTC or ETH via a platform like GDAX or Gemini.
Once you have your ETH or BTC, transferring it over to one of these exchanges and making your purchase is fairly simple. Both sites require verification before buying any XRP-but once you’re approved, buying and selling take only minutes.
Where can I buy XRP
Unlike most cryptocurrencies, you can’t buy XRP on exchanges like Coinbase. So where can I buy XRP? Instead, you’ll need to use a cryptocurrency exchange that deals in fiat currencies and XRP. You can find one by using CoinMarketCap’s handy list of cryptocurrency exchanges. I recommend Binance because it has low fees, supports many cryptocurrencies, and is very beginner-friendly.
But feel free to shop around and see what works best for you. Once you’ve found an exchange that works for you, add some funds (in fiat currency) via your bank account or credit card and purchase some XRP from them. This will take just a few minutes. Afterward, make sure that any currency traded on Binance is being transferred into your wallet – not held in their wallet!
