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What is Ripple {XRP} and How it Works

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What is ripple (xrp)? how ripple works? why is ripple price increasing? how is ripple different than bitcoin? what is the future od ripple (xrp) in 2018? how to buy ripple? how to sell ripple? Well, the new cryptocurrency on the lips of everyone in the rapidly changing world of digital currencies is ripple (XRP) and we are getting these questions almost daily. Let us try to solve all your queries in this post.

The disruptive technology behind Ripple (XRP) has pushed the Ripple up by 29000% in year 2017. More and more people are wondering how to buy and invest in Ripple because they are very convincing to be in front of the new Bitcoin. The price of Ripple (about two dollar) is much lower than that of Bitcoin (which recently touched $ 20,000), and is thus more accessible by mass investors. Let’s learn everything about Ripple (XRP) in this post.

What is Ripple (XRP)

What is ripple ? Ripple cryptocurrency was born in 2012 and its protocol was created by OpenCoin and renamed Ripple Labs in 2015. Company was founded by Chris Larsen and Jed McCaleb. With the aim of eliminating and overcoming the difficulties and disadvantages of Bitcoin. The idea behind Ripple is that of the P2P monetary system , based on peer to peer technology. which allows to encrypt transactions. The main attraction of Ripple is the strong support of major financial institutions and analysts who foresee a solid and flourishing future. All thanks to its main objective, which is to increase global liquidity by allowing transfers of money all over the world at record speed and with very low commissions. In practice, those commission costs we owe to the bank when we transfer money or withdraw via cards (i.e swift, visa and mastercard) tunes to billions.

It operates on a decentralized platform and on an open source network. This means that the developers have room for maneuver to intervene on their investments in an absolutely free way. Provided of course to remain in the (few) limits set by the rules of use and issuance of the cryptocurrency itself. It is developed in Ripple Labs, in San Francisco, California. They use the Ripple Consensus algorithm to establish and record transactions on a secure distributed database: the Ripple Consensus Ledger (RCL).

The popularity of Ripple is growing more and more and even the Banks are enjoying its system. To date there are already more than 75 Banks that use it for commercial transactions (including UBSBank of America).

How to buy Ripple

In January 2017, XRP was valued at 0.0064USD per coin, while 31 December 2017 price was 2.2 USD, growing more than 2200x its value in under a year. The growth has only just started though and it’s not too late to hop on board this train. The price of Ripple is predicted to grow to more than $9USD in 2018. Check ripple (xrp) price prediction for 2018. Let’s move to how to buy Ripple ?

The possibilities are two: either via Exchange, or via CFD with Broker. In both cases, however, the important thing is to rely on legal, transparent, secure and controlled platforms. Otherwise you will seriously risk your money to fraudulent owners or by a Hacker attack because not every exchange is protected.

Let’s start with CFD, acronym for Contract for difference. It is a financial instrument whose price derives from the value of other types of investment instruments. Instead of trading or physically exchanging financial assets, the CFD represents an operation in which two parties (seller and buyer) agree to exchange money based on the change in value of the underlying asset. Contracts for Difference can be a great way to invest in Ripple (XRP) price movements without actually having to own any of the virtual currency. Check this post for more details >> How To Trade Ripple (XRP) CFD With Plus500.

Second is exchange. However, in the case of Exchange, the fact is that most of the exchanges doesn’t support Ripple (XRP) on their platform. Your country specific exchange may or may not support XRP on their platform. So in some cases you must first buy the queen of crypto currencies aka Bitcoin and then withdraw to ripple. Check our previous post on How to buy Ripple {XRP} with PayPal, Credit Card or Debit Card.

How Ripple works

How does Ripple work? The Ripple system consists of 3 parts:

  • a network of payments
  • a bag
  • the same currency (XRP)

The operation of the Ripple network is based on the trust mechanism represented by the IOU credits (I Owe You) which represent the real currencies. What you send and receive is precisely these credits that are converted into “real” money in the so-called Ripple gateways. All debts, that is to say the transactions, take place only between subjects who have established a bond of trust. Adhering precisely to the Ripple network. Ripple transactions are instant, free and irreversible. XRP is the only currency that circulates in the Ripple network and is the unit of measurement for the exchange of IOU credits. This is how current system of money transfer works, in following image.

What is Ripple {XRP} and How it Works

Ripple solutions lower the total cost of settlement by enabling banks to transact directly, without correspondent banks, and with real-time certainty of settlement. Banks around the world are partnering with Ripple to improve their cross-border payment offerings, and to join the growing, global network of financial institutions and market makers laying the foundation for the Internet of Value. This is how ripple intends to transform system of money transfer, in following image

Another feature is the ability to exchange and transfer money between different currencies. Think of those currencies that are forced to go for the dollar. Thanks to Ripple, not only will no longer be paid commissions, but they will not even have to deal with the fluctuations of the dollar.

How is Ripple different than Bitcoin

What are the differences between Ripple and Bitcoin? A difference with Bitcoin is the presence of transaction logs called Ledgers , which allow you to monitor exchanges and complete transactions within a few seconds. Secondly Bitcoin is only a cryptocurrency, Ripple, in addition to that, is also a large network through which to carry out transactions conveniently between different currencies.

Third is scalability and speed, Ripple network is capable of doing 1000 transactions per second, running 24/7. To understand how important these numbers are, just know that Bitcoin is able to do 3-6 transactions per second, and Ether only 15. Even payment confirmation is also are very fast. They arrive in just 4 seconds where Bitcoin takes 30+ minutes. Last difference is in the maximum distribution in circulation of the two virtual currencies: for the bitcoins a maximum of 21 million is expected, while for ripple 100 billion.

How to choose Ripple (XRP) Wallet

We can choose between hardware, software and online wallets for Ripple (XRP).

  • Online Wallet : You can use gatehub as your preferred online wallet. Here are the instructions to setup Gatehub Ripple Wallet.
  • Software Wallet : You can install Exodus eden wallet on Windows PC, Mac OS and Linux. How To Setup Exodus Eden Wallet.
  • Hardware Wallet : Ledger Nano S is recommended for hardware wallet since it supports several cryptocurrencies among the most popular ones like Bitcoin, Ethereum, Dash, Ripple, Stratis and Zcash.

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