With the introduction of XRP by Ripple, many people are wondering about its position
in the crypto world and whether it's worth their time to invest.
Let's take a look at some of the specifics about XRP that you need to know before you decide to buy XRP.
Ripple is both a digital currency (known as XRP) and an open payment network within which that currency is transferred.
Like Bitcoin, Ripple has its own blockchain and is based on a shared public database of all transactions ever made with it.
Ripple supports tokens representing fiat currencies, cryptocurrency, commodities, or any other unit of value such as frequent flier miles or mobile minutes.
The goal of Ripple is to allow people to break free from banking intermediaries by providing a fast and scalable digital currency alternative that anyone from any country can use.
To purchase XRP, you first need to create an account in the crypto marketplace. Coinbase is a common entry point for first-time investors looking to buy cryptocurrencies using fiat currency.
The website allows you to make cash deposits via bank transfer, credit card, wire transfer, and more.
Remember that once your money hits Coinbase, it's yours – they don't take possession of your cryptocurrency.
Like all online wallets, your holdings are susceptible to hackers and other cyber criminals seeking access to your private data.
I get this common question from people who are just hearing about XRP, which recently overtook ether as the second most valuable cryptocurrency by market cap.
Use cases of XRP can range from very practical to extremely speculative; as such, I think it's good to start with some more grounded examples.
Let's take a look at some potential use cases of XRP. It's also worth noting that these are not mutually exclusive.
For example, money remittance providers could utilize xRapid (or another XRP solution) to source liquidity on-demand when sending funds across borders and then settle those transactions via XRP instead of fiat currency once they arrive at their destination.
This provides a number of benefits: firstly, transaction fees are lower than those charged by traditional services like Western Union or MoneyGram.
Secondly, suppose settlement happens instantly via XRP instead of days later through fiat currency exchanges (which often experience significant volatility).
In that case, money transfers will be much faster and more predictable for senders and receivers alike.
And thirdly, it allows companies to transfer value across borders without having to maintain an overseas bank account, which can be both expensive and logistically challenging.
In fact, Ripple has already partnered with one such provider—Cuallix—to test xRapid for cross-border payments between Mexico and the US.
We've discussed some of its advantages. Now let's get down to one of XRP's biggest selling points: its speed.
When it comes to transferring funds from point A to point B, Ripple and XRP have been shown to be superior.
Case in point: Western Union. Western Union recently announced that it is piloting a new program using XRP for transactions between American customers and their Mexican counterparts.
With an aim toward speeding up transfers by as much as two-thirds, Western Union demonstrated just how valuable faster transactions could be (especially when they're cross-border).
The program is still being tested, but if successful, expect it to add even more value to an already impressive cryptocurrency.