While Bitcoin was a big hit in 2021, it was not the only cryptocurrency to emerge this year. Among the thousands of cryptocurrencies in existence, Ripple has also made a name for itself and is even in the Top 10 virtual currencies in terms of market capitalization. Want to know more about Ripple, how it works, the benefits of investing in this cryptocurrency and how to buy it? This article will provide you with some answers.
Ripple (XRP): what is this cryptocurrency and how does it work?
Just like Bitcoin and Ethereum, Ripple (XRP) is a cryptocurrency based on blockchain technology. Its unique feature, it aims to be a decentralized digital currency system, that is, a solution to facilitate fast means of payment via a decentralized platform. It was launched in 2012 by Ripple Labs, a California-based startup whose founder, Chris Larsen, is the fifth richest man in the world, ahead of Facebook creator Marc Zuckerberg.
Ripple is a virtual currency with a different creation and issuance protocol than Bitcoin. While Bitcoin is being released gradually, all XRP tokens are already mined and 15% of these Ripples are already on the market. A portion of the remaining coins (20%) is held by the creators and the other portion (65%) will be issued later. Finally, the Ripple system relies on a consensus mechanism that verifies and secures the transactions made by the members of the XRP network.
Why buy Ripple?
If Ripple has been successful since the beginning of this year, it still represents a real opportunity for stock market investors. In fact, the cryptocurrency’s market capitalization has reached nearly $75 billion as of April 2021 while its price has exploded by 650% from January. And even though the Ripplen price has not symbolically exceeded the $1 mark since then, there is every reason to believe that it could experience further increases at the end of this year.
Moreover, as mentioned before, Ripple offers a simple and fast payment system, which makes this virtual currency one of the most coveted at the moment. While the use of this clearing currency is generally restricted to member banks, an ever-increasing number of retail investors are making it a real financial attraction.
Another good reason to buy Ripple is that this cryptocurrency costs less than Bitcoin. While 1 BTC is worth about $60,000, an XRP coin is accessible as low as $0.9. This presents a considerable advantage, as it is easier to have hundreds of Ripples than a single BTC, whose price is more volatile besides. Ripple is a stable cryptocurrency with one of the lowest volatilities in the market.
How to buy this cryptocurrency?
The development in recent years of crypto asset platforms has democratized the financial market, making Ripple easily accessible to individuals. So you can get it from sites like Coinbase and Binance, or from a trading broker like Bitvavo which allows you to buy or sell this cryptocurrency via a derivative. With the latter option, however, you should know that you will not be the intrinsic owner of XRP since you have not used the Ripple network. The purpose of your purchase is purely speculative and does not give you any rights over the evolution of the XRP protocol.