What is Ripple (XRP)? Taking the middle ground between a fully decentralized currency and a centralized one, XRP is known for its close relationship with banks and other traditional financial institutions.
It’s also has a very fast transaction time for cryptocurrency, especially compared to Bitcoin. Because of these factors, it has been a great entry point for the traditional investor cryptocurrency trading.
- History of Ripple
- What is Ripple?
- What is XRP?
- Ripple Price
- Ripple vs. Stellar Lumens: What’s the Difference?
- How to Buy Ripple?
- How Do You Store Ripple?
- Additional Resources
History of Ripple
Initially created and monikered as ‘Ripple Pay’ by Ryan Fugger in 2004, a developer in Vancouver, British Columbia, Ripple evolved out of Fugger’s observations after working on a local exchange trading system and the inefficiencies that plagued it. Subsequently, Fugger debuted ‘RipplyPay.com’ in 2005 – providing secure payment options to the online community across a global network, later manifesting itself in the form of ‘eDonkey network.
Eventually, the decentralized nature of Ripple took form in 2011 – where transactions were able to be verified by consensus among network users and members.
Ripple’s evolution and carved out niche was something of a slow burn, and it wasn’t until Fugger was approached by E-Loan and Prosper founder Chris Larsen and eDonkey network developer Jed McCaleb that Ripple began to take shape as an online digital currency. In 2012, OpenCoin Inc. was founded, and a new payment protocol called the ‘Ripple Transaction Protocol (RTXP) was underway – aiming to circumnavigate exorbitant fees and wait times associated with traditional correspondent banking systems.
In order to bolster security, the Ripple Transaction Protocol was programmed to rely on a common ledger “managed by a network of independent validating servers” which constantly compared and contrasted transaction records – and with that, Ripple had entered the blockchain space and cryptosphere. Additionally, they rolled out their own form of digital currency called ‘XRP’ – making the fees and wait times associated with institutional financial transfers negligible.
In late, 2013, OpenCoin Inc. changed its name to Ripple Labs Inc., and started on their push for mass adoption amongst global financial and banking institutions.
And, that takes us to our next section, “What is Ripple?” where we will take a look at exactly how Ripple is disrupting financial institutions and bringing value to otherwise inefficient and flawed financial systems.
CoolWallet Security & Storage Tip: If you hold more than one month’s salary on a cryptocurrency exchange or platform, we highly recommend you invest in cold storage and a hardware wallet – such as our CoolWallet S. For just a small cost, you can secure your crypto investments and prevent theft, hacking attempts, and loss of your Ripple, BTC, BCH, Ethereum & Litecoin.
What is Ripple?
If you haven’t already hazarded a guess of what exactly Ripple is seeking to accomplish – it’s tackling the basic infrastructure for interbank transactions, financial institutions, and other financial systems. More specifically, built on a distributed open source protocol and consensus ledger, Ripple is a:
- Real-time gross settlement system,
- Remittance network, &
If you’re unfamiliar with the term “real-time gross settlement,” it simply means the transfer of funds between one bank or institution to another in “real time” – immediately and not subject to a waiting period – and on a “gross” basis – offset by applicable reductions. And, remittance is just a fancy word for P2P or institution-to-institution transfer across economic borders.
Broken down even further, Ripple is a protocol making financial transactions cheaper, faster, and more reliable. As our present day banking system suffers from numerous core deficiencies and inadequacies, including:
- Long transfer times – sometimes taking as long as 3 to 5 days,
- High failure rate,
- Exorbitant transfer fees & associated costs,
- Inefficient middlemen, &
- No overarching & global infrastructure for certain transactions.
If unconvinced at the speed and rapidity which blockchain offers, as of May 20th, 2018, transactions on the Bitcoin blockchain are averaging 10 minutes, while Litecoin boasts an impressive 2.3 minute average.
The Ripple protocol enables banks and non-bank financial institutions and services to seamlessly incorporate the protocol into their already established systems, ultimately allowing their customers to use the service. At present, Ripple requires there be two parties for a transaction to take place:
- Regulated financial institution: For example, a bank. Such institution stores and holds funds, issuing balances on behalf of its customers, &
- Market makers: These are the parties who provide liquidity in various currencies. Such market makers include hedge funds and currency trading desks.
Users then make payments and transact with one another by using cryptographically signed transactions on a distributed database in either fiat currencies (think USD, EUR, GBP) or the Ripple currency itself (XRP) – to be discussed in Section 4, “What is XRP?”
Ripple’s protocol and trust mechanism integrates several core user verification protocols and bank services, ensuring users are only transacting with parties they trust. For example, when transacting in fiat currencies, transacting parties are able to set limits of credit, which may be adjusted or fixed. And, when users who have not yet established a trust relationship are transacting for the first time, the Ripple protocol searches for a trust nexus across the protocol to ensure the transaction takes place between two users who do share a trust relationship.
Simply put, the Ripple protocol finds the most trustworthy and reliable party to transact with – either through verification and trust mechanisms in place, or extreme due diligence across the network. Such process is commonly referred to as “rippling.”
Think about it, in an age where we are able to “Shazam” any song on the radio and immediately learn it’s which album and singer it is from – even from the middle of the woods – or deliver pizzas by drones, we still aren’t able to effectively and efficiently send a few digits of currency to your Nonna in the Italian countryside.
To quote the World Bank, “Ripple does for payments what SMTP did for email, which is enable the systems of different financial institutions to communicate directly.”
CoolWallet Tip: When reading about cryptocurrencies, signing up for exchanges, and transacting in specific currencies – such as Ripple – you will come across the term “KYC,” short for “know your customer/client.” KYC is the identification process used by businesses and banks to identify their clients, ultimately decreasing the likelihood of money laundering, bribery, and other forms of corruption.
As mentioned above, XRP is the native currency used by the Ripple protocol, so let’s take a further look into what exactly XRP is, its functions, and how many there are.
What is XRP?
Divisible to up to 6 decimals, XRP is the native currency employed by the Ripple network, and “exist natively within the Ripple protocol as a counterparty-free currency.”
As opposed to a redeemable balance, where specific financial institutions are required to exchange or trade it, XRP is an asset and does not require users and transacting parties to trust financial institutions. It’s also worth noting that because Ripple is not dependent on third-parties and gateways for redemption, it is the only currency on the Ripple network that does not carry counterparty risk.
Due to its cost saving nature and seamless conversions between currencies, Ripple is often referred to as a “bridge currency.” Ripple is classified as a bridge currency because all accounts in the XRP ledger are able to send XRP between one another and must hold a minimum amount as a reserve (as of December 26th, 2017, each Ripple account must have a reserve of at least 20 XRP). Enabling efficient sending and ensuring sufficient reserves eliminates the need for a financial gateway or liquidity provider, drastically saving on costs and time.
At its inception, the Ripple team created 100 billion XRP, a capped amount which is not subject to further creation – as such, think of Ripple as an asset with decreasing available supply and thus, a deflationary store of value. Of the 100 billion XRP circulating in the crypto-sphere, 20 billion XRP were kept by the creators of Ripple – a topic which has generated considerable amounts of controversy.
However, in May, 2017, to quell rumors and concerns surrounding unsavory practices and manipulation by the Ripple team, Ripple founders placed 55 billion XRP – or roughly 88% of their XRP holdings – into a secured escrow account. The account allows the team to use up to 1 billion XRP per month and return any unused amounts at the end of the month. If you’re curious about tracking the amount of XRP distributed and their movements, you can follow it through their Ripple Charts website.
Now that we have an understanding of XRP, how many are in circulation, and how it fits into the context of financial institutions, let’s take a look at an example of how it can be used by financial institutions.
Basic Ripple Example
The Royal Bank of X wants to send the National Bank of Y $10,000,000 USD. Instead of exchanging large amounts of fiat for other fiat, Bank X purchases an amount of XRP equivalent to $10,000,000 USD, and sends this to National Bank of Y’s Ripple account and wallet. Bank Y is then able to convert their $10,000,000 USD equivalent in Ripple to the currency in which they conduct business in. This all occurs within a matter of minutes and allows banks and other institutions to skirt having to sell their XRP on an exchange or other platform.
XRP As a Means to Prevent Spam
Transaction fees exist for a reason. Do they need to rise to the gross and inequitable level that most banks and payment processors employ? Surely not. However, when dealing with cryptocurrencies, preventing mass spamming of the network is an ever-too-present reality, therefore Ripple charges transaction fees for those made in non-native currencies.
Essentially, hackers and other malicious actors need control of the network in order to overload the network and prevent the settling of legitimate transactions. Ripple’s transaction fee protects against potential network flooding, meaning that carrying out an attack on the Ripple Protocol would be costly – too costly for most run-of-the-mill or even highly concentrated hacking efforts.
If Ripple were free – meaning there were no transaction fees across the network – malicious actors and hackers would be able to broadcast high volumes of “ledger spam” (fake accounts) and “transaction spam” (fake transactions), ultimately overloading the network and interfering with the network’s ability to operate.
As a preventative measure, each Ripple account is required to support a small reserve of XRP – 20 XRP to be exact. As of May 25th, 2018, Ripple’s average transaction cost is a mere USD $.0019.
As you can see, $.0019 is actually on the higher end compared to past Ripple transaction fees, but as we’ve seen with the market in 2018, there’s a correction taking place – one that even some of the brightest market experts are unable to explain. Notably, on December 5, 2017, Ripple boasted a transaction fee starting at just .00001 XRP, or US $0.000002.
Additionally, what’s important to understand is that with each transaction, the transaction fee is burned and ultimately ceases to exist, making it a depreciating asset and deflationary mechanism.
Down the line, assuming things in the crypto-sphere continue to progress and legitimize, and volatility is reduced, the burning of Ripple will ensure an ever decreasing total – commensurate with global inflation and buying power.
As of May 25th, 2018, Ripple’s $24.42 billion dollar market cap puts it in third position of all cryptocurrencies, nearly $7 billion greater than Bitcoin Cash and $36 billion less than Ethereum.
Ripple was relatively under the radar of the average crypto investor until the market surge in early Q2 of 2017, where it skyrocketed from roughly US $.02 to .03 cents to over .40 cents, followed by another charge in December, 2017 all the way up to nearly US $3.30. There was however concern that Ripple was trading far above its actual price due to manipulation in Korean markets and amongst other exchanges.
Below are just several reasons why we believe Ripple has experienced mass growth in just one year (price-wise).
Ripple’s core team boasts a slew of fintech and technology veterans who have demonstrated a fundamental understanding that securing partnerships and customer acquisition is an essential for thriving in such a volatile market.
Ripple supports over 75 commercially deploying customers – with over 100 currently on their roster, and in late 2017, Ripple announced a lucrative partnership with American Express – what some consider to be the catalyst for bringing Ripple to mainstream America’s attention. Ripple’s partnership with American Express elevated it from a merely speculative crypto, to an institutionally backed reliable alternative to financial transactions.
Curious about Ripple’s global network of partnerships and customers? Look no further, below are just a few of the major names part of Ripple’s growing global network:
- Standard Chartered,
- International Foreign Exchange,
- Bank of Tokyo, &
- Cambridge Global Payments.
- Coinbase speculation
In late, 2017, Coinbase surpassed YouTube as the #1 app downloaded from the Apple App Store, and if you’ve purchased cryptocurrencies with your debit or credit card, there’s a high likelihood you’ve purchased through Coinbase.
And, for those unfamiliar with Coinbase, Coinbase is a digital currency exchange based out of the United States, brokering exchanges of Bitcoin, Ethereum, Bitcoin Cash, and Litecoin with fiat currencies (USD, GBP, EUR) from over 32 countries, and bitcoin transactions and storage in 190 countries globally. As of November, 2017, Coinbase services over 13.3 million users and does over USD $1 billion in revenue per year.
As the number 3 in market cap rankings, it’s only fair that a large percentage of the crypto community views Ripple’s listing on Coinbase as inevitable. And, with the weight which Coinbase holds in the cryptocurrency market – easing the process for first-time investors and novices – Ripple’s listing on Coinbase could truly be a never-looking back point for them.
- Asian markets
Asia is crazy for crypto, and it shows. At one point, South Korea was driving over 35% of Ethereum’s trade, and boasts some of the largest global crypto exchanges, including: Bithumb, Upbit, and Coinone, so it’s not surprise that the Asian markets are one of the biggest driving forces behind Ripple and crypto’s rise.
To quote Alexey Ivanov, CEO and co-founder of Moscow-based blockchain investment firm, “Asians are going mad for Ripple.” In 2016, Ripple partnered with SBI Holdings, to launch SBI Ripple Asia, servicing markets in Korea, China, Japan, Taiwan, and other ASEAN countries – establishing dedicated engineering and sales groups to sell and install solutions for global bank payments.
[tip_coolwallet_style image=”https://www.coolwallet.io/wp-content/uploads/2018/04/bigtip.png”]SBI Holdings has recently invested into CoolBitX, the maker of the CoolWallet S[/tip_coolwallet_style]
The coalition includes 61 banks in Japan, who have launched new digital pilot programs to test and use Ripple.
And, with Ripple looking to fully permeate the Chinese market by the end of 2018, who knows what’s in store for this blockchain protocol in years to come.
CoolWallet Security Wallet Tip: When sending cryptocurrencies between wallets, make sure to always double check the address you are sending to. Taking note of the first and last 5 string of numbers comprising the address is an effective way to make sure you are sending to the proper address. Trying to contact exchanges in order to resolve such issues can take quite some time, which could ultimately result in lost coins, or lost opportunity value.
Now, let’s take a look at one of Ripple’s biggest competitors; Stellar Lumens, and see how they both stack up against one another.
Ripple vs. Stellar Lumens: What’s the Difference?
First, we encourage you to do a little reading on Stellar Lumens – a platform connecting banks, payment systems, and people, ultimately enabling them to move and transact quickly, reliably, and at almost no cost.
Now that you’ve take a look at Stellar Lumens, you’re probably thinking that Stellar bears a striking resemblance to Ripple at first glance. And, we’ll tell you this…You wouldn’t be wrong. After all, both Stellar Lumens and Ripple were founded by the same person – Jed McCaleb – and both service to overhaul payment processing coupled with native currencies.
However, once you take a further look at both, you’ll find Stellar and Ripple are actually targeting different markets and boast fundamentally different protocols.
|Founder||Jed McCaleb||Jed McCaleb|
|Governing Foundation||Ripple Foundation – a for profit organization connecting banks, payment providers, and digital asset exchanges. Ripple could be likened to Goldman Sachs, while Stellar would be more fittingly monikered as Robin Hood.||Stellar Development Foundation – a not-for-profit organization with more altruistic aims of providing low-cost financial services to fight poverty and develop individual potential.|
|Funding||USD $100 million||USD $ 5 million|
|Consensus Mechanism||Ripple uses a “Proof-of Correctness” (PoC) consensus mechanism, which (similar to Bitcoin) closes ledgers once consensus is reached. To read up more on Ripple’s consensus mechanism check out this summary here.||Stellar provides consensus without having to rely on a closed ledger system to accurately record transactions. You can read more about Stellar’s consensus mechanism here.|
|Tokens||The XRP token is deflationary, and Ripple burns a small percentage anytime a transaction takes place. Currently, Ripple has a total supply of 99.9 billion XRP, with 39.1 billion in total circulating supply.||The XLM token is inflationary, and has 1% of total supply created every year. Currently, Stellar has a total supply of 103 billion XLM, with 18.5 billion in total circulating supply.|
|Transaction Time||4 seconds||2-5 seconds|
|Centralized vs. Decentralized||Some have argued that the Ripple Team’s retention of 20% of XRP allows them to exercise a large degree of control over then network, removing a truly decentralized nature envisioned by the blockchain.||Although the Stellar Development Foundation controls a large portion of XLM, they have not received the same backlash as Ripple for their “centralized” nature.|
|Market Cap||At the time of writing (May 25th, 2018), Ripple’s market cap is uS $24.4 billion.||At the time of writing (May 25th, 2018), Stellar Lumen’s market cap is US $5.4 billion.|
|Signatures||Ripple employs a ECDSA signature scheme and 20-byte hashes for addresses.||Stellar uses the Ed25519 signature scheme and 32-byte public keys for addresses.|
|Target Market||Financial institutions||Individuals|
If you’re looking for a one sentence takeaway from the above information – Stellar Lumens is going after individuals, while Ripple is taking on financial institutions and big banks themselves.
Keep in mind that there’s no clear winner here in the realm of financial transactions, because both can coexist peacefully due to their fundamental goal of institutional and global overhaul.
[tip_coolwallet_style image=”https://www.coolwallet.io/wp-content/uploads/2018/04/bigtip.png”]Beware of the dreaded “punycode” when typing an exchange or wallets address into your browser. Punycode is a special encoding used to convert Unicode character to ASCII, or a smaller and more restricted character set. For example, the dots above the “u” in München are considered punycode and often used by phishing sites looking to steal your personal information and crypto.[/tip_coolwallet_style]
We’re eager to hear your thoughts on Ripple, and see if you think it truly is set to revolutionize financial institutions across the world (Bill Gates sure thinks so). Due to XRP boasting the third largest cryptocurrency market capitalization, many members of the media and press have likened Ripple to a rival of Bitcoin.
Let us know what you think of that statement, as it has generated considerable controversy and debate due to their differing protocols and ambitions.
How to Buy Ripple?
With the market having corrected drastically since January of 2018, you can either approach it with caution, or take it as an opportunity to load up on cryptocurrencies that you might have otherwise deemed too expensive.
We prefer the latter, considering we are firm believers in cryptocurrency and blockchain’s overhaul and remedy of traditional institutions and mechanisms which have failed to materialize and evolve over time.
Below are several tips on how to purchase Ripple – followed by our substantive guide on how to store it (hint: If you aren’t storing your Ripple with a CoolWallet S or via other cold storage mechanism, your crypto may be in danger of being hacked).
Fortunately, as Ripple is the third largest market cap cryptocurrency, it is widely available across exchanges and platforms and available on nearly every major exchange.
Where Can You Buy Ripple?
As mentioned above, Ripple has not yet been been made available on the likes of Coinbase, but there are plenty of other reputable exchanges and platforms to purchase it, including:
CEX.io: If you’re looking to purchase Ripple and other cryptocurrencies with your debit or credit card, CEX.io is your best bet. CEX.io boasts an easy to use interface and is a popular choice amongst crypto novices and experts for purchasing their favorite cryptos. Unlike Coinbase, CEX.io operates in 99% of all countries and roughly 24 U.S. States, meaning there’s a high likelihood your area is covered.
Changelly: Similar to CEX.io, Changelly also allows users to purchase cryptocurrencies with their debit or credit card, making an otherwise possibly overwhelming experience, seamless and easy. Changelley allows investors to purchase XRP with their credit or debit card directly, and doesn’t require one to first purchase BTC or ETH and later convert.
Kraken Exchange: If you are looking to purchase Ripple from a reputable exchange, look no further than Kraken. In order to Ripple and other cryptocurrencies from Kraken, you’ll first have to purchase BTC or ETH on another exchange or platform and then transfer it to Kraken. Kraken is presently the world’s largest bitcoin exchange in euro volume and liquidity, and has enjoyed mainstream success due to a transparent and open team, making it a go-to for investors looking for user-friendly exchange.
Binance: One of the highest trafficked and trusted cryptocurrency exchanges out there, Binance is a highly recommended option for purchasing and storing small amounts of XRP. In order to purchase XRP from Binance, you will first need to purchase BTC or ETH from another exchange, such as CEX.io or Coinbase, and transfer to Binance. Binance supports a robust ecosystem of altcoins and is constantly updating and adding to their already impressive list.
ShapeShift: Like Binance, users looking to purchase XRP must purchase BTC, ETH, or BCH elsewhere and then convert. ShapeShift is considered unique in today’s cryptocurrency exchange ecosystem due to the fact it doesn’t collect personal data and doesn’t pool investor funds in their company accounts – ensuring users won’t fall prey to one of the many scam exchanges that have popped up over the years.
Curious about other exchanges and platforms to purchase Ripple on? Check out Ripple’s “XRP Buying Guide” here, which lists all available exchanges to purchase XRP.
Tips and Tricks
- Tip 1:
When you’re first purchasing XRP and other cryptocurrencies on exchange, it can seem like a daunting task. Make sure if you are looking to purchase XRP, that it is actually represented as ‘XRP’ in the exchange and wallet. Unlike other cryptos, the sending of XRP between exchanges requires not only the XRP address, but a “Deposit Tag” as well.
- Tip 2:
When you’re transferring funds, copy and paste the tag provided to you by the website in order to identify your transaction along with the deposit address. Destination tags are employed by Ripple due to institutions who support and service multiple users. As they have a single Ripple address, they ultimately need a way to differentiate between individual customers and users.
- Tip 3:
If you fail to fill in an XRP destination tag (a 9-digit figure), your XRP transaction may possibly be rejected and returned to you – minus the transaction fees – or your XRP transaction could possibly end up stuck on the exchange – requiring you to contact the exchange and go through a lengthy process.
- Tip 4:
Finally, when purchasing XRP and other cryptocurrencies on exchanges, it’s important to understand the differences between market, limit, and stop orders.
Market orders are attempts to purchase XRP or another cryptocurrency at the effective price in the moment you click purchase. Market orders purchase XRP and other cryptos in that instantaneous moment.
Due to such, market slippage will often occur, and you will sometimes end up paying a little bit higher price than originally expected, or sometimes you will end up receiving your coins at a lower price than expected.
When the market is volatile, slippage can be extreme, resulting in a substantial loss – depending on how much you are investing.
Limit orders are dependent on a second party’s market order, and places your order in hopes of someone filling it at a particular price. For example, if you set a limit buy for 100 XRP at USD .58 cents (a bit lower than the current price of .61 cents), you are hoping someone ultimately sells of at least 100 XRP at .58 cents, and then your order will be filled.
Unlike market orders, limit orders are not subject to market slippage due to the prescribed price you have entered. Oftentimes, limit orders will boast lower trading fees.
Stop orders are commonly employed by investors and traders who have outlined specific price parameters and conditions they would like to liquidate at. Stop orders are similar to limit orders, but buy and sell similar to market orders. They are often commonly referred to as “stop loss” orders.
Buy the Dip (Origin, Logic, Assessment)
Your friends and peers have likely thrown around the phrase “buy the dip” and left you wondering what exactly does it mean? Let’s take a look at what exactly buying the dip entails.It’s common to “buy the dip” in bull or stagnant markets, where markets are generally trending upwards. Note, that when you are buying the dip, you are likely executing one of the following actions:
- Purchasing XRP and other cryptos incrementally,
- Waiting for the price of XRP to come down or settle, &
- Creating buy orders at lower prices (lower than current market prices).
Buying the dip is a basic investment strategy, aiming to average your investment as a price of a cryptocurrency goes down or settles. Although a basic investment strategy, buying the dip is intrinsically extremely complex, and investors employing this strategy should be prepared to witness a crypto either continue to rise and never come back down, or crash altogether.
How Do You Store Ripple?
As mentioned above in one of our CoolWallet storage tips, investors shouldn’t leave any amount of XRP or cryptocurrency on an exchange or platform if they aren’t prepared to lose it completely. Unfortunately, since the inception of cryptocurrency exchanges and purchasing platforms, there’s been a slew of substantial and notable hacks – resulting in billions of dollars of cryptocurrency lost.
Whether you lose your XRP and crypto to market corrections, exchange hacks, or other dubious circumstances, don’t leave an amount on an exchange that you aren’t prepared to lose. A general rule of thumb is to never keep more than one month’s salary on an exchange.
Now, let’s take a look at several storage options, appeasing the budget and security tastes of novice and seasoned crypto investors. Think about it, crypto is like any other valuable asset and there are certain security measures and expenditures you should be taking to secure it.
1. Ripple Hardware Wallets
For investors keeping more than one month’s salary of cryptocurrency on an exchange or platform, hardware wallets should be the absolute go-to for storage. Although hardware wallets are the most expensive form of cold-storage options, they also boast the highest degree of functionality and security.
Just as you’d want to secure your Bill Russell rookie card in a glass case or even a safety deposit box, you’re going to want to preserve and store your XRP in a similar manner.
Securing your XRP and other cryptocurrencies for a relatively small cost now far exceeds the alternative – losing it forever due to theft or hack.When considering cold storage options, the CoolWallet S is your ultimate cryptocurrency safe, allowing you to easily and securely store and manage your XRP, BTC, BCH, ETH, and LTC.
CoolWallet’s advanced cold storage system keeps your XRP and cryptos completely offline, is easy to set up, and pairs with your Android 5 (or later) and iPhone 5 (iOS 9.1 or later).
Bring the power and security of cold storage to your fingertips today and pick up a CoolWallet S now.
2. Paper Wallets
Paper wallets are just as their name sounds, they are private keys and QR codes printed and stored on a piece of paper. For investors looking to save costs on cold storage, paper wallets are a near-free way to store your XRP and other cryptocurrencies. However, paper wallets do carry one significant downside.
Although the most economical of all wallet and storage options – cutting out the need of an intermediary storage device – paper wallets are easily susceptible to physical damage and loss. If you don’t take care of your paper wallet properly, you risk losing your hard-earned XRP and cryptos for good.
3. Desktop Wallets
Desktop wallets are technically classified as “hot wallets” due to their need of an Internet connection to access them. Desktop wallets are a great starting point for novice crypto investors and those who are only holding small amounts of XRP and other cryptos.
However, it’s important to understand that desktop wallets are the most vulnerable of the three storage options. Look no further than popular cryptocurrency investor and “evangelist” Ian Balina, who in mid, 2018 had his hot wallet and private keys hacked to the tune of over USD $2 million. If a hack like that can happen to someone who eats, sleeps, and breathes crypto, it can surely happen to you.
We at CoolWallet only recommend using a desktop wallet when dealing with smaller amounts of cryptocurrency. The average computer user isn’t always cognizant of whether they are using a malware free computer – an essential for hot wallets. And, with rampant phishing and hacking attacks in the blockchain ecosystem, it’s not always a 100% guarantee the website your logging onto or computer you’re using is completely protected.
As noted above, when sending XRP between accounts, make sure you are sending to the right address. Noting the first and last 5 characters of the address and matching it up with the corresponding address you’re sending your XRP to is an effective way of double-checking that you’re sending to yourself.
[tip_coolwallet_style image=”https://www.coolwallet.io/wp-content/uploads/2018/04/bigtip.png”]If you’re curious about what other cryptocurrencies CoolWallet stores, look no further. At CoolWallet, our device not only stores XRP, but stores Bitcoin, Bitcoin Cash, Ethereum, and Litecoin.[/tip_coolwallet_style]
Additional Ripple Resources
If you – like us at CoolWallet – truly believe cryptocurrency and blockchain is set to disrupt ineffective and traditional financial, economic, social, and political institutions, it’s important you take a comprehensive approach to information gathering.
What makes cryptocurrency and blockchain special is the fact that it has put the dissemination and control of information back in the hands of its users – steering clear of traditional and centralized dissemination methods.
Below are some of the resources we recommend you look to when learning about Ripple and other cryptocurrencies.
- Ripple White Paper: This formal document outlines Ripple’s consensus algorithm and identifies the Ripple Protocol’s definition, correctness, agreement, and utility.
- Ripple Website: Ripple’s official website for the protocol’s overview, news, updates, lists of partnerships, use cases, and more.
- Ripple Reddit: A popular subreddit for Ripple enthusiasts to post the latest Ripple information, analysis, and other thoughts.
- XRP Chat: The largest unofficial Ripple forum, boasting general discussions, technical discussions, a marketplace, and more.
- Ripple Twitter: The official Twitter account of Ripple. Beware of imposter accounts who frequently comment on Ripple’s tweets offering free giveaways and other offers that are just too good to be true.
- CoinMarketCap: The most popular analytics and tracking tool for cryptocurrencies, displaying market capitalization rankings, charts, and other historical data.
- XRP Blockchain Explorer: An XRP blockchain explorer used to track transactions across the blockchain.