Things are really heating up on the cryptocurrency information front. While there is enough information on Bitcoin, the new kids on the cryptocurrency block are generating a lot of interest as well. Take Ripple, for example.
Ripple (XRP) is the fourth-largest cryptocurrency by market cap and there is a flurry of activity surrounding it. And as it often happens when there are different sources, conflicting messages result in confusion. Today we’ll put an end to the confusion, starting with the popular Ripple question: How to Buy XRP?
How to Buy Ripple XRP
Buying ripples (XRPs) is not too complicated, provided you go about it in a systematic manner. All you need to do is follow three simple steps.
Step #1 – Get an XRP Wallet
Cryptocurrency wallets can be broken down into software wallets, hardware wallets, and paper wallets. Software wallets can be further classified into desktop, online, and mobile wallets.
Desktop wallets can be downloaded and installed on your computer. Rippex offers a desktop wallet for “Mac,” “Windows,” and “Linux.”
Online wallets run via the cloud and are accessible from any computing device in any location. Gatehub is an online wallet for Ripple Coin.
Mobile wallets are similar to desktop wallets but are much smaller and simpler than desktop wallets because of the limited space available.
Hardware wallets store a user’s private keys on a hardware device like a USB. Though these wallets make transactions online, the data is stored and therefore offers increased security. At present, the only reliable hardware wallet for storing XRP is the “Ledger Nano S.”
Paper wallets are nothing but a physical copy or printout of your public and private keys. All transactions can either be done manually by entering your private keys or by scanning the QR code on the paper wallet.
Once you figure out which type of wallet best suits your needs, you go to the next step in the XRP buying process.
Step #2 – Select a Ripple Exchange
There are several exchanges that can help you buy Ripple today. You can use these exchanges to buy XRP with fiat currency (dollars, euros, yen etc.) and you can also trade Bitcoin for Ripple on some of the exchanges. I’ve devoted an entire section to XRP Exchanges later on in this article. Once you get a fix on your wallet and your exchange, it’s time for the next step.
Step #3 – Transfer (Withdraw) Your XRP to Your Wallet
Whatever exchange you got your XRPs from, it’s a good idea to withdraw them into your own wallet for safety. Once this is done, and the transfer is confirmed, the XRPs are yours.
Before we go any further, let us take a step back and understand what a cryptocurrency exchange actually is and how it is different from stock market exchanges.
What Is a Cryptocurrency Exchange?
Cryptocurrency exchanges are online platforms where you can either exchange your fiat currency for a cryptocurrency (and vice versa) or exchange a particular cryptocurrency like XRP for a totally different cryptocurrency (Bitcoin, Ethereum, Litecoin etc.). In a way, it is like a stock exchange where you exchange fiat currency for shares of a certain company. But that’s where the similarities end.
Differences Between Cryptocurrency and Stock Market Exchanges
In the stock market, you need at least $100.00 to invest. But in the cryptocurrency exchange, you could start off with as little as a dollar. The stock market is open Monday to Friday for a certain number of hours, but the cryptocurrency exchanges are open 24/7. Stock exchanges require a lot of information like names, addresses, social security numbers, and some sort of government identification, but many cryptocurrency exchanges just need a name and an email address to create an account.
The other big difference between the two exchanges is volatility. While the stock markets usually swing up or down five percent to 15% per day, cryptocurrencies can change by 1,000% or more each day.
Types of Cryptocurrency Exchanges
There are four different types of cryptocurrency exchanges.
1. Traditional Cryptocurrency Exchanges:
These exchanges play middleman to buyers and sellers as they trade based on the current market price of cryptocurrencies. The exchanges generally take a fee for each transaction. Kraken and GDAX fall into this category. Shapeshift is also similar but it does not charge a fee for the service.
2. Direct Trading Exchanges:
These exchanges offer direct trading between buyers and sellers. There is no fixed market price and sellers get to set their own exchange rate.
3. Cryptocurrency Brokers:
These web site-based exchanges are akin to the currency exchange at an airport. The brokers set a price that is a bit higher than the market price if you are buying, and a bit lower than the market price if you are selling. Coinbase falls into this category.
4. Cryptocurrency Funds:
These are professionally managed cryptocurrency assets that allow the public to buy and hold cryptocurrency via the fund.
Factors to Select the Best XRP Exchange
Given that there are so many types of exchanges, it’s a good idea to do a little research on the factors to select the best XRP exchange.
Reputation – Sift through reviews from individual users and well-known industry web sites to find the best XRP exchange reviews. You could also ask questions on forums like BitcoinTalk or Reddit to find out what the best XRP exchanges are.
Fees – Before signing up, make sure you understand deposit, transaction, and withdrawal fees.
Payment Methods – Does the exchange accept credit and debit cards? What about wire transfers? PayPal? An exchange with limited payment options can limit your usability.
Verification Requirements – While it seems like a good idea to go with exchanges that don’t need verification, opt for ones that do. It protects the exchange against all kinds of scams and money laundering.
Geographical Restrictions – Ensure that the exchange you choose allows full access to all tools and functions in the country/geographic area you want to operate in.
Exchange Rate – Rates can fluctuate up to 10% and even higher. So do your homework. As the value of your XRPs goes up, even a four-percent to five-percent shift could mean hundreds of dollars.
To make things a little easier for you, I’ve selected my four best XRP exchanges, plotted their pros and cons, and made an XRP exchange comparison chart that can serve as a ready reckoner for XRP investors.
Best XRP Exchanges
Listed below are four of the best crypto exchanges based on user reviews as well as a host of other criteria such as accessibility, fees, user-friendliness, and safety.
This exchange is good for more experienced traders. Today, it is the largest Bitcoin exchange in euro volume and liquidity. For more experienced users, Kraken offers margin trading and a host of other trading features.
Pros: Secure, low transaction fees, well-reputed, minimal deposit fees, decent exchange rates, feature-rich, great user support worldwide.
Cons: Not suitable for beginners (unintuitive user interface), limited payment methods.
Though founded very recently (2014), Poloniex has established itself very well and is now among the world’s leading cryptocurrency exchanges with the highest trading volumes. One of the unique tools on Poloniex is the chat box, which is continuously filled with user help.
Pros: Fast signup process, low trading fees, feature-rich, BTC lending, high-volume trading, user-friendly,
Cons: Slow customer service, no fiat currency support.
Founded in 2011, this European Union-based Bitcoin exchange has built up quite a reputation in the cryptocurrency community as a trusted and secure exchange.
Pros: Good reputation, high-level security, worldwide availability, low transaction fees, good for large transactions, multilingual user interface.
Cons: Limited payment methods, interface is not user-friendly for beginners, high deposit fees.
Changelly is a cryptocurrency exchange web site founded in 2013. Soon after its launch, it introduced an option that allows people to buy Ripple XRP coin or any other cryptocurrency by paying through credit or debit cards.
Pros: Fast transactions, supports fiat currencies, reliable with more than 100,000 users, easy user interface, 24/7 support.
Cons: High transaction fees, no built-in wallet.
Coinbase and XRP
Coinbase is arguably one of the most popular cryptocurrency exchanges in the world. It is backed by trusted investors and used by millions of customers across the globe. However, it currently does not support Ripple.
As we mentioned in a recent Ripple price forecast, a Reddit user posted instructions for other XRP fans to petition Coinbase and have Ripple listed beside Bitcoin, Ethereum, and Litecoin. A similar petition was made on Change.org. (Source: “Get Ripple on CoinBase,” Change.org, last accessed November 27, 2017.)
Both petitions have been gaining traction recently, with the Change.org petition on its way to meeting its goal of 5,000 signatures. Such ardent support may lead to Coinbase supporting Ripple (XRP) trading in the near future.
For comparison’s sake, we’ve listed the pros and cons of Coinbase below.
Pros: Security, user-friendly for beginners, reputable, competitive, offers insurance coverage for stored currency.
Cons: Customer support could be better, limited payment methods, limited countries supported, non-uniform rollout of services worldwide.
XRPs Exchange Comparison Chart
Name of Exchange
The above-listed exchanges are my top four XRP exchanges. Between them, you can definitely find one that meets your needs. My favorite is Poloniex because I trade from the U.S. I also love the chat box feature, which throws up interesting questions that keep me constantly refreshing my cryptocurrency knowledge bank.
Having said that, I also like Changelly for its credit/debit card feature. But that doesn’t mean you shouldn’t look at the other exchanges. The best way to get the right exchange for you is to list out your needs and find an exchange that can support those needs.