The Beginner’s Guide to Investing in Ripple

Asif is a cryptocurrency enthusiast and journalist who's been writing on the subject since 2014. He also has a keen interest in social engineering and cybersecurity. When not busy writing about cryptocurrency, he can be found reading books and listening to music. He holds an M.Sc in Life Science and an MBA in Finance & Banking.

Investing in Ripple

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Investing in cryptocurrencies, and the projects that fuel them, has become a common activity.  While it wouldn’t be factual to say that most people have cryptocurrencies, it is true that the percentage of people who own them rises every day.

According to an 2022 NBC report, 21% of Americans have traded or used crypto.  Cryptocurrencies are well on their way to mass adoption.

Yet, it’s strange that in a market with thousands of different tokens and projects, most people can usually only name a single crypto: Bitcoin

The word has become so ubiquitous that some press reports, either due to simplicity or incompetence, use the term to refer to cryptocurrencies in general.

In truth, there are many cryptocurrencies and crypto projects worth your investing capital. Ripple, along with Ethereum, is one of the most common ones – and with good reason.

Despite some recent ups and down in light of potential Securities and Exchange Commission (SEC) regulation, it remains one of the most promising crypto projects out there.

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What is Ripple?

Let’s first make it clear that Ripple isn’t one of those crypto that exist just for the sake of existing – far from that, in fact. 

In a scene where far too many tokens follow the lead started by Bitcoin, where cryptocurrencies were their own reason to be, Ripple and the XRP ledger is one of a handful of well-thought-out projects with a clear vision, a clear goal, and an actual use.

Ripple’s goal as a blockchain isn’t to become the de facto blockchain people use for cryptocurrency transactions.  In fact, Ripple’s goal is far from it, its cryptocurrency exists as a way to handle payments inside its network.

The main problem Ripple is trying to solve is that of banking – specifically, how slow and expensive banking transactions are, particularly transactions taking place between different banks, in different countries, or using different currencies.

Investing in Ripple

The fact that a wire transfer often takes days and hefty charges (in some cases, a wire transfer will set you back $60 – an outrageous amount of money, while taking 4 business days to process) seems absurd considering the world we live in.

We can know what’s going on in Tokyo by tapping on our phones.  We can make purchases through the internet and have our goods delivered within the hour.

We can even send electronic money to others instantaneously, including any currency exchanges that might be needed.

So why are banks so slow despite being the anchor of our current economy?  It’s because they use an obsolete system, one designed four decades ago, and nobody has bothered to upgrade it… so far.

How to Invest in Ripple

As with most crypto investments, Ripple can be invested in in several ways depending on what your end goal is. Some of the most common uses for XRP are:

Holding the currency

Holding, or 'HODLing', is a term used in cryptocurrency trading to describe when a user purchases or trades a certain crypto token without intending to spend it.

Usually, people do this because they expect the token’s price to eventually jump upwards, thus making a keeper to profit. 

Most people who made thousands or millions of dollars during the Bitcoin rush in late 2017 were doing just this – with lots of them holding the tokens since 2010, when each was worth less than $2.

Investing in your IRA

Another venue to consider is using the token for your IRA or investment portfolio.  Usually people look for investments that are likely to keep their value over time when compared to inflation, or others that are likely to appreciate but not very likely to depreciate.

As we have explained already, Ripple isn’t likely to lose its value suddenly, thus making it one of the better crypto tokens to add to your IRA. 

Unlike other tokens, like Bitcoin, that can shed large amounts of value overnight, Ripple is relatively stable, and this situation should get even better as more agencies explore its use cases.

I recommend checking out a company like Bitcoin IRA.

Short term trading

You can also use XRP for short term trading. As with all cryptocurrencies of value, XRP’s price fluctuates over short periods of time.

If you’re looking for a somewhat riskier investment that will net you quick cash if done properly, then buying low and selling high on the short term (i.e. a few days at most) is the investment strategy for you.

If you want an even more extreme trading experience, trying day trading should also work.  Do note, however, than short-term or day traders rarely ever stick to just one currency.

In other words, you shouldn’t day trade ONLY XRP, but instead, have XRP as one of the several tokens you trade.

5 Reasons To Invest In Ripple

Ripple Protocol

Ripple XRP and Ripple IOU are operational on the network. More than a currency, IOU represents the lack of it – IOU tokens created in the Ripple network, after all, represent just that: debt.

IOU tokens, as per Ripple’s model, can be generated by any actors in the network and have no intrinsic value for themselves.

Instead, it represents a promise by the actor that generated it to pay a certain amount of a certain asset to whoever holds said token.

And yes, saying “a certain asset” here is correct. Ripple’s IOUs aren’t tied to any crypto or fiat currency or, in fact, tied to currencies at all.

You can issue IOUs for USD just as you can issue them for EUR, GBP, JPY, or… chickens.  Whatever you choose to use as a payment you can issue an IOU token for.

In order to make it clear who owes how much to whom, IOU tokens consist of the amount of the asset, the name of the asset, and then the issuer’s identification.

For example, a 55 USD in IOU tokens would appear in the ledgers as 55 separate USD.companyname IOU tokens – where companyname is your identification.

Since IOU tokens are debt notes and anyone in the network can issue them, trust is an important factor in the Ripple blockchain.

Therefore, it’s important whenever you receive an IOU token to make sure the issuer is an entity you can trust, since IOU tokens can be traded just as regular cryptocurrencies can, meaning somebody else can pay you through Ripple with money somebody else owes them (although naturally you can always refuse to accept such a deal.)

IOU tokens were designed with the idea that some banks or entities might not want to use XRP due to the cryptocurrency’s volatility, lack of trust in cryptocurrencies in general, or just reluctance to adapt to a new system.

It gives Ripple a way to allow trading fiat currencies through the blockchain without needing to actually have them – in more or less the same way the Binance blockchain allows you to trade external cryptocurrencies by using pegged tokens.

Partnership with Banks

The reason you might not have seen many people use or talk of Ripple is simple: The blockchain is really geared towards institutions within the financial services industry.

Individuals can use it and trade in it, but it really shines when used by financial institutions.  Since most of us aren’t friends with the CEO of Bank of America, then it makes sense we might have never heard of it.

And yes, Bank of America is one of the many institutions that have adopted Ripple.  Other large financial institutions that currently use the platform are SBI Remit, Royal Santander, American Express, and more interestingly, J. P. Morgan.

Indeed, this institution that was hell-bent on destroying cryptocurrencies just a couple years ago has adopted the technology.

Ripple doesn’t see a lot of use among individuals, but it can be traded just like any cryptocurrency.  In fact, since the blockchain it depends on has a purpose, XRP is one of those cryptocurrencies where logic dictates values should go up over time.

Other known banks partnering with Ripple include:

  1. BBVA
  2. SEB
  3. Axis Bank
  4. eZforex
  5. MUFG
  6. Akbank
  7. Star One Credit Union
  8. Yes Bank
  9. Cambridge Global Payments

Speed of Transactions

It is fast to send money with Ripple, even when you might never have heard of it.  And yes, many banks have adopted its blockchain and use it regularly to process transactions.

Ripple XRP transfers happen in a matter of seconds from its initiation.  When for example, a Canadian bank has to transfer, say, 5000CAD to an entity in Japan, XRP trading means it doesn’t have to perform any additional currency exchanges.

The bank just takes as many XRP that would make 5000CAD, sends them via the Ripple network to the Japanese bank, and call it a day.

The Japanese bank is then supposed to change those XRP into JPY (or keep the ripple as part of their liquid holdings and give the customer the JPY,) thus seamlessly completing the transaction.

Management Team and Investors

Ripple Management Team

Ripple was conceived by Jed McCaleb , who has since moved on to Stellar.  He pitched the idea to Arthur Britto and David Shwartz, and they built Ripple.

However, today, the company is regarded as founded by the trio of Arthur Britto, Ryan Fugger, and Chris Larsen, with its registered business name as Ripple Labs, Inc.

Larsen is the Board’s executive chairman, he founded E-Loan , an online lender with a public company status in the U.S before the Ripple adventure. 

Brad Garlinghouse is the CEO of Ripple, and also serves on the Board. He worked previously as President of AOL’S Consumer Applications Unit.

There are other six members of the board with varying levels of career attainment in their chosen fields.  Google was one of the early backers of this project.

Others include FF Angel IV, Andreesen Horowitz, as well as Ashton Kutcher’s Sound Ventures.

Current Price

[mcrypto id="509891"]

Ripple came to the market at 0.004228USD, but the digital currency currently trades at 0.424884USD.  In 2017, its price surged by over 3,000 percent. At the beginning of 2019, it traded at 0.352512USD with its highest peak attained in April 2021 when it hit 1.80USD.

In effect, how much it is worth depends on the state of Bitcoin and the cryptocurrency market, at least as of now. At the time of writing, Ripple has a market capitalization of $40.47 billion.

How To Buy Ripple

Welcome aboard as you learn how to buy Ripple.  Since you can’t mine or stake for XRP, the only way to get it is by buying XRP.

Since we assume, you’re thinking of holding it rather than using it, you’ll also need a crypto wallet of your own where you can keep it while holding it.

You could also keep it in your exchange’s own wallet but depending on the exchange’s security rating, this might not be a great idea.

Plenty of exchanges allow XRP transactions, among them are some of the largest in the world like Binance and Coinbase

Those would be a great place to begin, particularly if you don’t want to deal with crypto wallets and would rather leave your crypto at the exchange.

Both sites have excellent security; so, as long as you do your part and use a secure password, and two-factor authentication, it should be safe there.

If you’re more experienced or would rather jump to the deeper end, Ripple recently released a list of exchanges that are officially recommended for those looking to buy or sell XRP.

As per that list, the preferred digital asset exchanges for ripple are Bittrex, Bitso and  The exchanges are located in the US, Mexico, and the Philippines respectively.

While going for the preferred exchanges might feel more legit, there’s no need for smaller traders to do so.

Rather than being trustable, those exchanges were chosen because of their large number of holdings in XRP, guaranteeing liquidity – and they are recommended mostly to banks and other institutions that are likely to buy or sell the token in large amounts.

How to Buy Ripple On Coinbase

Few tips are needed when trying to buy XRP on cryptocurrency exchanges.  However, for the uninitiated, we have compiled a step-by-step list of the whole process, using Coinbase as our chosen exchange.

The process would therefore go as follows:

  1. Register an account with Coinbase. You’ll only need an email and password at first, but the exchange does require verification to use most of its features.
  2. Go through verification. While you can buy XRP in several levels, you should at least aim for verification level 2 (and 3 if you plan on spending the XRP or moving it somewhere else.) For level 2, you’ll need to verify your phone number and provide proof of residence.
  3. Deposit funds into your Coinbase account. If you’re in the US, you can do this via bank account or wire transfer, with bank account being the preferred (faster and cheaper) method. You can also skip this step and purchase XRP using a credit card.
  4. Go to the Buy/Sell section of the site and look for Ripple/XRP. You’ll be shown the going price. You can then input how much you want to buy.
  5. Proceed with the checkout process.
  6. You should now have your XRP. Initially, they’ll be stored in Coinbase’s own wallet. You can use this wallet if you want, although Coinbase is known for sometimes closing accounts if they disagree with whoever you’re sending money to on moral grounds.
  7. You can sell your XRP for fiat at any time. You can also withdraw your XRP into a crypto wallet that supports the currency if you have achieved level 3 verification with Coinbase.
  8. Although Ripple has both XRP and IOU tokens, IOU tokens aren’t traded by most exchanges. Therefore, when trading “Ripple,” you should assume people are talking about XRP.

Should You Invest in Ripple?

Ripple has come to a level of reputation that it is taken as the best money transfer medium for its low charges and speed.

While many people might wonder why it took so long to have alternative to traditional wire transfer, Ripple surely meets the need.

And no major institution tried to change the status quo before it did.  That’s how Ripple and the XRP Ledger was born. 

While banking could well be optimized without using the blockchain, blockchain technology was made with the idea of handling financial systems.

At present, the world’s financial system already finds enough reason to adopt blockchain systems.

Ripple’s solution is simply elegant: In the same way Bitcoin transactions use the processing power of it's nodes to authenticate transactions across the blockchain, so can the Ripple blockchain use the processing power of its users to authenticate and settle transactions taking place among banks.

So, there is never a time that money sent through Ripple would be unaccounted for.  The reason is simple, it makes money transfers a case of sender and receiver with no hidden layers in-between.

Ripple FAQ's

Can I obtain Ripple without spending money?

No, you can’t. While many cryptocurrencies can be mined or staked (the latter being the process of using a given amount of the cryptocurrency to generate more,) Ripple entered the market with a fixed, already existing market cap.

No more XRP are being added to the blockchain, nor are there plans to ever do so.  New tokens are actually added to the blockchain each month, but that’s because of how it works – more than half of the ten billion XRP that where issued on release are being held by the parent company.

Said XRP tokens are slowly injected into the market, usually offered to financial institutions first of all.  Even then, once this admittedly large number of tokens runs out, no more XRP will be added.

There’s more, though. There’s one detail in the design behind Ripple that can greatly affect its value over time: Not only will no more XRP ever be issued, but the amount of existing XRP will in fact decrease over time.

This is because, by design, Ripple turns around the logic behind crypto mining or staking. Usually, the crypto you can either mine or stake carries a transaction fee.

Each transaction costs a small amount of crypto, paid for by the sender. It’s this amount of crypto that’s usually divided among those mining (or staking) in the blockchain.

Ripple doesn’t give the transaction costs to anyone, though. Instead, transaction costs in the Ripple blockchain just… disappear. Meaning, there are fewer XRP tokens in existence every day, and that amount will only get lower and lower.

Since the rules of economy dictate that a smaller supply drives prices up, Ripple’s prices are likely to go up in time, particularly once tokens stop being injected into the economy.

What other advantages does Ripple have, if any?

There’s one peculiarity about Ripple that might not matter to some, but that will definitely make a difference for many would-be investors.

Remember how many banks have adopted the blockchain and its crypto token?  There’s a reason to that. And that reason is that Ripple, both the blockchain and it's token, have passed the no-security token test (judged not to be a security token)  in the U.S and United Kingdom.

This means a few things, but the main one is that XRP holders need not fear their tokens will be made worthless by an eventual cryptocurrency law.

This regulation is part of the reason why many financial institutions have embraced the service, but its benefits also affect regular users.

We live in a world where most countries haven’t issued laws to deal with cryptocurrencies. While crypto trading is allowed almost anywhere, there’s the constant fear that it will be outlawed completely or partially.

Even if it isn’t outlawed (for example, it’s highly unlikely it will be outlawed in the US,) introducing formal regulations to the market might affect some tokens, depending on how trustworthy each blockchain is seen.

While it can’t be said that Ripple is already cleared on this front, because said crypto regulation laws aren’t yet definite, it’s surely one step ahead of its competitors.

By complying with current regulations, the service is 100% legal right now. So, even if this changes over time, nothing drastic should be expected to happen as any new law might just require some additional compliance steps by Ripple.


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Asif is a cryptocurrency enthusiast and journalist who's been writing on the subject since 2014. He also has a keen interest in social engineering and cybersecurity. When not busy writing about cryptocurrency, he can be found reading books and listening to music. He holds an M.Sc in Life Science and an MBA in Finance & Banking.

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