Learn all about Ripple, ways to invest in it, the unique features of the cryptocurrency coin, and the points to remember before investing in it.
What Is Ripple?
Ripple is the world’s leading Global Payments Network. It allows its users to broaden their horizons to newer markets that were previously uncharted in their portfolios. It uses one of the advanced blockchain technologies, and through its cryptocurrency token (XRP), it allows its users to avoid the hassles of pre-funding. Many of the top financial institutions use Ripple’s technology to carry out their transactions.
What Makes Ripple Special?
Ripple does not use the traditional blockchain to conduct trades. It utilizes a distributed consensus mechanism.
- The participating nodes in this chain will use a poll to verify the authenticity of the transaction. This system allows trades to be processed and approved almost instantaneously, and it also has a minimal energy requirement.
- It also makes it independent of the Proof of Work (PoW) and the Proof of Stake (PoS) network algorithms.
- Conventional blockchain tokens such as BitCoin use energy-intensive operations, contrary to this token.
- These features give the cryptocurrency a major boost to its feature portfolio, making it a desirable alternative for payments and a perfect option for banking and fund transfers.
- Financial Institutions use RippleNet. RippleNet provides Liquidity on Demand and a line of credit to ensure that the firm has capital for investment or for paying its clients or customers.
What Unique Use Cases Does Ripple Offer?
Unlike other traditional cryptocurrencies, Ripple has diverted its sole focus to financial transactions and providing the means to do so. This has allowed large corporations to pitch in as partners.
- The Ripple token (XRP) is the main conduit between the currencies or networks that need to be exchanged. Ripple is also significantly cheaper than other cryptocurrency tokens to use.
- It can also be used as a mediating currency to trade two different forms of currency.
- As an option to invest, the crypto asset has great potential for turnover and profitability. Unlike the traditional cryptocurrency tokens, the coin has a very low price, making it affordable for investors with a low budget. Profits, even though they are slow, are regular.
Which Institutions Are Using Ripple For Their Transactions?
Over 100 major financial institutions across 55 countries are using Ripple to conduct their transactions. A few of them include Bank of America, American Express, Santander, IndusInd Bank, Standard Chartered, Ria, RationalFX, Azimo, TransferGo, and Sentbe.
How Can I Profitably Invest In Ripple?
Ripple can be traded using any of the major cryptocurrency exchanges.
- Kraken, Uphold, and Crypto are common portals that users in the United States can utilize.
- Oceania countries (Australia and New Zealand) can use Plus500 or Easy Crypto.
- Indian Users can use CoinDCX Pro or WazirX to conduct their trades for Ripple.
- Companies cannot be mine this cryptocurrency token. The only mining that occurs is through the Ripple Enterprise. Investors can use the existing blockchain connections, but its alternative route allows for easy trading.
- The XRP token can be lent only on a personal basis but not through any of the exchanges.
- In addition, traders can invest Ripple through any of its partner banks and other finance corporations.
How Safe Is It To Invest?
Ripple is one of the most secure cryptocurrency coins to invest in. It is backed by the largest names in the financial world, and their tokens, the XRP, is bound to stay consistently around for the coming years. The overall fluctuations are not greater than 10% per quarter, so the value will pick up eventually, even during a downward trend. Ripple Labs plans to release 1 billion tokens every month and shunt the excess back to an escrow account. This policy ensures that cryptocurrency cannot be misused. This cryptocurrency is a highly profitable investment.
Things to Consider Before Investing In Ripple
Investors should keep the following in mind before investing in Ripple –
- Niche Use Case – Ripple has made its home only in the finance and banking sector as of now. It is yet to make its mark as a high-value cryptocurrency that can be used as a replacement for other coins.
- Low Volatility – The coin, to date, has recorded a maximum fluctuation in the early double digits, making it one of the safer alternative cryptocurrencies.
- Long-term investments for profits – Ripple is priced at a low $1.12 (as of writing this article) can generate significant profits only when invested for long periods of time and left untouched. If you are looking for good profits in a very short amount of time, other tokens will suit you.
- Positive Growth – Even though it may be relatively slow, pundits have estimated that the Ripple token will increase by 20% by Q1 of 2022. This makes it a highly lucrative investment.
- Secondary Investment – Ripple should not be your primary cryptocurrency investment. Major coins like Bitcoin and Ethereum should take up most of the capital that you have set aside. Ripple should be a secondary investment to add value to the main bulk of where you have put your funds as it gives small returns on its small pricing.
Ripple has the potential to turn the tide towards itself and shows great prospects to deviate from its conventional use as an alternate currency. The token is backed by big names who transact using their portal, and therefore, it’s not just their coin but also their valuable technology. XRP coins also have the potential to generate profits over long periods when invested patiently.