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What Is Ripple?
Ripple is a digital payment protocol designed to enable fast, low-cost cross-border money transfers. It uses blockchain technology to allow financial institutions, such as banks and payment providers, to settle transactions in real-time.
Ripple’s network, known as RippleNet, leverages its native cryptocurrency, XRP, as a bridge currency to facilitate these transfers, making them more efficient compared to traditional methods like SWIFT. Ripple focuses on providing a streamlined, scalable solution for global payments, aiming to improve speed and reduce transaction fees for international transfers.
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What Is XRP?
XRP is the native cryptocurrency of the Ripple network, designed to facilitate fast, low-cost international money transfers. Unlike traditional cryptocurrencies such as Bitcoin, which focus on decentralisation, XRP is optimised for use by financial institutions as a bridge currency to settle cross-border transactions in real-time.
Ripple's technology allows banks and payment providers to transfer money globally in seconds, reducing fees and delays compared to traditional systems. XRP also has a fixed supply of 100 billion tokens.
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Who Created XRP?
XRP was created in 2012 by Chris Larsen and Jed McCaleb, along with other developers, as part of the Ripple Labs team. The San Francisco-based blockchain startup is also the majority owner of XRP, holding about 61 percent of the digital currency.
Ripple Labs (originally called OpenCoin) developed the Ripple payment protocol and XRP as a faster, more energy-efficient alternative to Bitcoin, with the goal of facilitating real-time, low-cost cross-border payments for financial institutions.
In May 2017, to alleviate concerns surrounding XRP supply, XRP committed to placing 55 billion XRP (88 percent of its XRP holdings) into a cryptographically-secured escrow. The escrow will allow the company to sell up to 1 billion ‘coins’ monthly and return whatever is unused at the end of each month to the back of the escrow queue in the form of an additional month-long contract, essentially starting the process all over.
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What’s the Difference Between XRP, Ripple and Bitcoin?
XRP, Ripple, and Bitcoin differ in their purpose, technology, and use cases. Bitcoin is a decentralised digital currency primarily used as a store of value and a medium of exchange. In contrast, XRP was created by Ripple to enable fast, low-cost international money transfers, mainly for banks and financial institutions.
Bitcoin operates on a decentralised blockchain using mining (Proof of Work), making it slower and more energy-intensive. XRP uses Ripple’s consensus ledger, which doesn’t require mining, allowing faster transactions with lower fees. Ripple refers to the company behind XRP and the RippleNet payment network.
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How To Buy XRP?
To buy XRP, start by choosing a reputable cryptocurrency exchange that supports XRP, such as Binance, Kraken, or KuCoin. After creating an account and completing identity verification, deposit funds using a bank transfer, credit/debit card, or cryptocurrency. Once your account is funded, search for XRP and place a buy order at the current market price or set a limit order at your desired price. After purchasing, it's recommended to store your XRP in a secure wallet, either on the exchange or a private wallet.
Unlike Bitcoin, some exchanges may not list XRP due to ongoing legal issues (as part of a lawsuit filed by the U.S. Securities and Exchange Commission (SEC) against Ripple Labs in December 2020), so it’s important to verify availability on your chosen platform.
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How to Choose an XRP Exchange?
When choosing an XRP exchange, it's important to ensure the platform complies with local regulations and supports XRP, as some exchanges delisted it due to ongoing legal issues. Additionally, prioritise security by selecting exchanges that offer two-factor authentication, encryption, and cold storage for funds.
Compare fees, including transaction, deposit, and withdrawal costs, across platforms to find the best option for your needs. Reputation is also key—choose an exchange with positive reviews and a solid track record. Finally, confirm that your preferred payment method, such as bank transfers or credit/debit cards, is supported. Popular platforms include Binance, Kraken, and KuCoin.
