Beginners Guide To Ripple XRP In Plain English

Ripple is a money transfer network.

At present, the financial industry uses a system called SWIFT for transferring money between banks. Ripple aims to replace SWIFT.

It may replace SWIFT because the fees for using XRP are tiny compared to using traditional exchange systems. XRP transactions take seconds, not days.

One stumbling block is that Ripple is currently tied up in legal troubles with the Securities and Exchange Commission (SEC):

The Securities and Exchange Commission announced today that it has filed an action against Ripple Labs Inc. and two of its executives, who are also significant security holders, alleging that they raised over $1.3 billion through an unregistered, ongoing digital asset securities offering.

 How do you buy XRP? 

You can do so on the following exchanges:

What Is XRP?

XRP is cryptocurrency that runs on the XRP Ledger. A cryptocurrency is a digital currency secured by cryptography.

XRP isn’t a coin. It isn’t a note or a bar of metal. Ada takes the form of a number and it resides in computers. You can send it to someone else just as easily as you send an email.

Why does it have value?

XRP has value because people choose to give it value. That’s also true of art, precious metals and currency. It can be worth a lot or a little, depending on the value people choose to give it.

Unlike Bitcoin, which has supply capped at 21M, around 1 billion XRP were pre-mined at launch. It is likely less a store of value than Bitcoin. It is, however, probably more likely to be used as an interbank payment system.

What makes XRP different from currency?

The main concept to understand is that XRP is decentralized.

XRP transactions don’t require a third party to validate a financial transaction. Any two people, anywhere in the world, can send XRP to each other without the involvement of a bank, government, or other financial institution.

Many people like the idea of having control of their own money, rather than letting banks control it.

How can XRP eliminate third party verification?

Every transaction involving Dogecoin is tracked on a blockchain.

A blockchain is simply a ledger. Blockchains are historical records of every transaction ever made using XRP.

Why is XRP attractive as an investment?

Given that there can be an infinite supply, it’s questionable as to whether XRP can be used as a store of value in the same way Bitcoin can.

One interesting aspect of XRP is that the Ripple network processes transactions for other fiat currencies, cryptocurrencies and commodities, not just XRP. It is flexible. Also, it has institutional adoption. It is currently used by the likes of Accenture, Santandar, Axis Bank and Yes Bank.

At this point, XRP is a highly speculative investment class. Investors should consult an investment advisor before making investments decision and risk no more than they can afford to lose.

Further Reading: