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Ripple (XRP): What Is It, and How To Buy It

Ripple (XRP) is one of the most sought-after cryptocurrencies. It was once the highest-valued altcoin until the company got embroiled in a lawsuit. However, it has defied all odds to maintain its position as one of the top ten digital coins by market capitalization and one of the go-to investment options for speculators. We bring you a detailed article about XRP, one of the few ISO-20022-certified cryptos, and the company behind it. Our researchers have answered every critical question about Ripple (XRP), including how it works, why you may need it, and how to buy it. Keep reading.

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ripple logo

What is Ripple?

Ripple is a blockchain-based transaction protocol and exchange network. It was Launched under the Ripple Labs company by Chris Larsen, David Schwartz, and Jed McCaleb in 2012. The payment settlement network was designed to facilitate remittance, just like the SWIFT system used by banks. However, it promises to eliminate the lags of the current financial remittance system by offering a cheaper and faster cross-border payment alternative. Through its technology, XRP Ledger (XRPL), Ripple settles transactions from central databases such as banking systems to a more trustless, cheap, and instant blockchain-based infrastructure.

At an average cost of 0.00001XRP per settlement, the Ripple network greatly overshadows traditional cross-border payment methods. It’s capable of processing at least 1,500 transactions per second. SWIFT can only handle up to 1000 payments per second and levies 3%-5% in fees. Ripple says its blockchain is 61,000 times more energy efficient than proof-of-work. The network has closed more than 70 million successful transactions as of writing this. Several institutions such as Bank of America, American Express and Santander, MoneyGram, and Royal Bank of Canada have already invested or shown interest in the project.

What is XRP?

XRP is the native token for the Ripple network and one of the oldest cryptocurrencies, having been rolled out barely two years after bitcoin. With a capitalization of over $23,167,373,123, the coin is the 6th largest cryptocurrency by market cap. It had a maximum supply of 100,000,000,000 coins and a circulating volume exceeding 50,000,000,000 XRP tokens by 28th October 2022. Over 50% of the coin’s total supply is in a cryptographically secured escrow. XRP achieved an all-time high of $3.84 on 4th January 2018 but has struggled to stay afloat ever since SEC filed a lawsuit against it. The commission claims that the cryptocurrency was illegally sold to the public as a security without registration, as federal law requires.

XRP token uses the power of XRPL to bridge different currencies. Unlike other digital coins, it works efficiently with both fiat and cryptocurrencies.

What Is the XRP Ledger, and What Is It Used For?

XRP Ledger is the building block of the Ripple network. Like Bitcoin and Ethereum, it’s a distributed public blockchain seeking to provide fast, reliable, sustainable, and scalable payment solutions. It comes with an inbuilt decentralized exchange (DEX) and a stable coin system (IOU) where you can use fiat currencies to purchase stable coins. It’s connected via a peer-to-peer network and seeks to solve similar problems of other blockchains, such as network-wide consensus and avoidance of double-spending. The only difference is that it does that with regard to facilitating the seamless worldwide transfer of funds. Unlike popular proof-of-work and proof-of-stake mechanisms, XRPL uses its own technology, the Ripple Protocol Consensus Algorithm. The algo, a brainchild of David Schwartz, was uniquely designed to offer speed and stability.

The XRP Ledger is also a platform for developers to build different decentralized applications. They can span from micropayment systems for gaming and web monetization to exchanges, non-fungible tokens (NFTs), and central bank ledgers. XRPL provides a secure avenue for payments and a bridge through which many of the world’s currencies can be digitized inexpensively. To achieve that, it has an inbuilt decentralized exchange that converts money using the most affordable trade order available. Developer building on the XRPL platform can easily monetize their applications and receive payments in almost any currency through the various bridging integrations available. Developers and other users can propose changes which will then be assessed by validators and implemented if collectively agreed upon.

How Is Ripple Different from XRP?

Ripple and XRP are commonly used interchangeably, but that’s not right as they are different. Ripple is the company behind XRP and its cross-border payment system. The idea behind the company first came to life in 2005 through Ryan Fugger, who developed a global online payment solution called Ripple Pay. It was until the blockchain came to life that Ryan, alongside other founders, established Ripple Labs, which would later rebrand to Ripple in 2015. The blockchain network created by the company also goes by the same name. It was designed to offer a more efficient and cost-effective replacement for SWIFT while maintaining the original blockchain tenet of decentralization,

While XRP and Ripple are highly related, the latter is a company and blockchain network, while the former is a crypto that facilitates instant gross settlement through XRPL. XRP token is a cryptocurrency and the only accepted method for paying transaction fees on the network.

How You Can Use Ripple and XRP

XRP functions like any other cryptocurrency. So, you can use it as a medium of exchange where it’s accepted for payments or as an asset for investment. While on the Ripple network, XRP is used to pay transaction fees. Additionally, it facilitates international payments by enabling the digitization of fiat currencies and the exchange of other cryptos into the desired currency for instant international money transfer. For example,

  • You have Euros and are looking to exchange them for Japanese Yen
  • First, you’d swap your Euros for XRP on the Ripple network
  • Now you can use those tokens to buy the Yen.

Ripple network’s DEX saves you time since you don’t have to go to the bank to send money. Moreover, it will only cost you 0.00001 compared to the high fees banks and other financial institutions charge.

Central banks seeking to issue their own digital coin don’t have to build an entire blockchain from scratch. Instead, they can take advantage of Ripple’s Central Bank Digital Currency (CRDC) to create and manage their own crypto project.

XRP's Benefits


  • Unlike bank wire transfers that usually take close to three days for international payments, XRP facilitates lightning-speed settlements. Typically, a transaction takes three to five seconds. This is also faster than other cryptos like Bitcoin, whose verification can take about an hour.


  • One of the biggest untold pains of sending money is the cost, with some institutions charging as high as 5%. Ripple only charges 0.00001.


  • Ripple offers high scalability with a capacity of 1500 transactions per minute through XRPL. The network can also handle the same throughput as Visa. It has already developed ties with several banks and financial institutions across the world.


  • The network has proven that it’s stable and reliable. It has never been hacked since it was launched. Information on the website shows the network has successfully processed over 70 million transactions with zero downtime in 10 years.


  • The consensus mechanism used by Ripple is 61,000x more energy-efficient than proof-of-work blockchains. It consumes only 7,900 kWh of power for one million transactions, compared to Bitcoin’s 951,500,000 for the same number of payments.


  • Like Bitcoin, Ethereum, and other digital assets, XRP runs on a distributed global network of more than 200 validators. It’s secure, immutable, transparent, and tamper-proof.

What are the risks of using XRP?

  • Volatility Risk: Like any other crypto, XRP is susceptible to the high volatility usually witnessed in the crypto market. This might make it dangerous for transactions as investors could quickly lose their money if a sudden supply and demand shift occurred while they were making a payment.
  • Legal Risk: Ripple is embroiled in a lawsuit with the SEC, which accuses it of conducting an illegal public offering. The final verdict could have detrimental effects on the value of the coin and the company if the SEC wins.
  • Censorship Risk: Ripple has enormous control over the network and tokens. Over 60% of the coins are owned by the company leaving users at the mercy of decisions made by Ripple investors such as large banks. With such a level of control, the company can easily freeze funds arbitrarily.
  • Slow Value Appreciation: Ripple’s use case looks good on paper. However, the most significant users of the network, banks and financial institutions don’t need to control large amounts of coins. This means the demand for the crypto will be low, leaving unanswered questions of what will drive its value upwards.

How to buy XRP - Step by Step

Anyone with a computer or smartphone and an internet connection can buy XRP in four easy steps.

Step 1: Find the Right Crypto Exchange

Research and compare the best crypto exchanges and select the one that stands out for you. Don’t forget to check their fees, customer support and ease of use.

Step 2: Sign up with your preferred exchange

Go ahead and create an account on your exchange of choice. You might need to verify your identity, especially on centralized exchanges like Binance and Coinabase.

Step 3: Fund your account

Now deposit money into your exchange account using one of the supported methods. Most platforms support various payment options, such as credit cards, bank transfers, and crypto payments.

Step 4: Buy XRP

Type “XRP” on the search bar for a full list of the available tradable pairs. Click on the one you are interested in, for example, XRPUSD, then specify the amount of money you want to invest and hit the “buy button.” Your XRP coins will be credited to your wallet in time.

How to Store your XRP

As a crypto asset, you can store you need a compatible wallet to store your token. There are mainly two types of XRP wallets:

  • Hardware wallets: These are USB-shaped devices that store crypto assets offline. You will need a budget of about $40 to get a decent hardware wallet, but the cost can go as high as $300, depending on the different features of each device. They include Ledger wallet, Trezor, and D’CENT.
  • Software wallets: Software wallets are applications developed to store digital coins. Most of them hold assets online and remain connected to the internet throughout. Some of the best software wallets are Binance, Mycelium, Guarda, and Coinbase wallet.

Why Ripple uses XRP and XRP Ledger

  • Instant cross-border payment settlement: XRP is a digital asset for global economic utility, while XRPL provides a bridge through which users can inexpensively send money abroad instantaneously.
  • Sustainable central bank digital currencies: As the name sounds, Central bank digital currencies (CBDC) are the digital versions of the national currency of a country. For example, the CBDC for the dollar would be dollar digital. XRP and XRPL provide a complete plug-and-play infrastructure for minting and managing central bank tokens.
  • Powerful utility for developers: XRPL’s robust open-source technology offers developers a reliable foundation for building their applications without a zero-carbon footprint. The XRP token and ledger allow the monetization of apps by facilitating the delivery and collection of payment worldwide without tying up funds in any market.

How Does Ripple's Network Function?

The XRP network follows a somewhat different model from other cryptos. The closest comparison would be the informal money settlement system called Hawala. The IMF defines Hawala as a channel of instantly sending money across borders using agents without actual money moving. Similarly, the Ripple network facilitates real-time money transfers through its native consensus algorithm.

Each currency supported by the network has its own transaction gateway. USDsnapswap and BTCbitstamp are some of the currency gateways that provide network entry points. With that, users can send money in any currency without converting it first. For example, if you are in the UK and want to pay someone in the US $100, you don’t need to convert your Euros to US dollars first. Instead, you can send the cash equivalent in Euros, and the receiver will instantly get a notification in dollar value. One can also decide to collect the funds in crypto, thanks to Ripple network gateways.

Validators must make sure all ledgers match every three to five seconds. Otherwise, they have to pause and find out what went wrong. This process ensures that network security remains strong and reliable for a trustless transaction environment.

How is the XRP Ledger so Efficient?

XRP Ledger derives efficiency from its speed, fees, and inbuilt technology. At the cost of only $0.0000046 tokens as of 28th October 2022, it offers users a significantly cheap alternative compared to Bitcoin and Ethereum, whose fees sometimes go past $20. The ledger’s speed gives it an edge over existing money remittance services, including SWIFT. Speed is achieved by the 80% validation rule, where a transaction is deemed successful as soon as 80% of the validators approve it. This eliminates delays that would have been caused by waiting for 100% approval. Regarding fees, all validators are interested in the project and are not paid mining fees. The energy requirements are also minimal, eliminating the need for high gas fees like those experienced in crypto like Ethereum.

The Future of XRP

Having already attracted the interest of key players in the financial industry, XRP is poised to explode. That is, however, not guaranteed with the current lawsuit facing the company. The legal battle’s outcome will be a cornerstone to the future of XRP and the entire digital coin sector. A favorable ruling will see the price of the coin skyrocket to new highs as new opportunities beckon. On the other hand, a win for SEC might hurt the already plummeting value of the coin further, and it may never recover.


Can you mine or stake XRP?

Unfortunately, you cannot mine or stake XRP. This is because there are a trusted number of validators to approve transactions. Besides, the entire coin supply was predetermined at launch, so there are no unmined coins.

Is Ripple centralized?

Ripple is decentralized and operates similarly to Bitcoin, Litecoin, and Ethereum. Although it works closely with banks, it’s a community-managed project and not controlled by any central organization.

Is XRP and Ripple the same thing?

Though related, Ripple and XRP mean two different things. XRP is a cryptocurrency while Ripple is the company and network behind it.

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Eugene Abungana
Eugene Abungana - Investment Analyst, Financial Analyst, and Institutional Trader
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Eugene is a crypto and iGaming writer, with a passion for sharing the latest trends and developments in the industry. His fascination with cryptocurrency started in 2014 when he first discovered Bitcoin. He has since expanded his knowledge and experience through education, trading, gaming, and working with different experts. My goal is to offer unbiased and accurate information while promoting ethical and responsible gambling practices.

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