At first glance, the corona virus seems to have only negative consequences. Thousands of people become ill, society is disrupted and the economy in many countries is also contracting. However, one market is experiencing an increase: the cryptocurrency market. All over the world, central banks and governments are pulling out all the stops to save the confidence of banks, companies and individuals. In Germany alone, the government has released 500 billion euros for loans to companies. Due to the rising government debt, more and more people see opportunities in the few things that the government or central bank cannot print, such as commodities (physical) or a house, but also crypto currencies such as Bitcoin, Ripple and Ethereum.
One of the largest crypto currencies is the Ripple (XRP) token. It is therefore invariably in the list of crypto projects with the highest market cap. But what exactly is it and how do you trade ripple?
The Ripple payment protocol
Ripple Labs company was founded in 2012 in the United States, originally under the name Opencoin. Since the beginning, the company has been working on a digital payment protocol, namely Ripple. This payment protocol focuses on streamlining payment transactions between banks. To find a solution for this, the payment network consists of three platforms: xCurrent, xVia and xRapid. Banks can then connect to these platforms. Such a payment protocol also includes a digital currency, which has become the Ripple coin. In the lists it is also noted as XRP. The Ripple coin can realize a faster payment between banks on the Ripple blockchain. Very handy, but how do you trade in Ripple?
How to trade Ripple
There are several ways an investor can trade Ripple. Buying Ripple in the traditional way, or investing in Ripple, usually takes place through brokers or online cryptocurrency exchanges. This process can sometimes present practical challenges, as crypto exchanges are rarely regulated and transactions can be executed with significant delays at busy times. A second way is trading Ripple through CFD trading, which consists of buying or selling a “Contract for Difference” (CFD) from a broker. In this way it is possible to place a trade within a fraction of a second. Ripple CFDs are derivatives, i.e. the price of a CFD is based on the value of the underlying asset, in this case Ripple XRP (or another cryptocurrency).
Ripple “mining” is not possible. When the Ripple cryptocurrency was introduced, a fixed amount of Ripple XRP was released. According to the protocol, the number of coins cannot be expanded further. The total number of Ripple XRPs is one hundred billion, the circulation of which is regulated by Ripple itself. This is criticized by some crypto traders, who argue that one of the distinguishing characteristics of cryptocurrency is that it can be traded without intervention of a central body or a supervisor. Yet, despite these criticisms, Ripple trading remains popular. But why?
Why is Ripple trading popular?
Several analysts have presented future predictions for Ripple. According to these predictions, it seems that Ripple has a lot of potential for growth. Ripple’s network and systems are superior to those of other major cryptocurrencies and the platform is already used by some major banks, multinationals and governments. In addition, there is also a real company behind Ripple XRP, which increases consumer confidence.
To summarize this article briefly, Ripple is thus a popular coin in the cryptocurrency market. The company behind Ripple has been around since 2012 and is developing a digital payment protocol for streamlining payments between banks. The digital currency associated with this protocol is the Ripple coin, also referred to as XRP. There are several ways to trade Ripple, but mining is not one of them. Ripple is predicted to grow even more in the future. Of course it is impossible to determine this exactly because the crypto market is very volatile, but the forecasts are good.