While the world is a big place, technology and trade has made it feel like a small village. Today, it is possible to travel across multiple continents within a day. It’s the same with financial transactions. Every day, hundreds of billions of dollars move across borders. But the movement of these funds has a reputation for its errors and high costs. For years, companies have been attempting to solve this problem, and with the introduction of blockchain technology, this process has accelerated. One of the biggest players in this space is Ripple, which offers a tradable currency known as XRP.
Ripple has created payment software that is used by banks and other large companies. Its flagship product is known as xCurrent, which makes global payments easier and seamless in nature. The product enables financial transfers that are in real time, cost effective, and those that are completed with certainty. The goal of this product was to replace the legacy centralized systems that are ineffective, slow, error prone, and cost effective.
The product works as a global decentralized system of financial players. The players are categorized into two: network users, who are the corporates, SMEs, small banks, and payment providers who send payments. Second, there are the network members, who are the banks and payment providers that service the foundation of the system. These members use xCurrent process payments, pre-validate transactions, and provides payment certainty.
In addition to xCurrent, Ripple has a product known as xRapid, which is used by the network members to source liquidity. This liquidity is provided through an on-demand pool of funds in digital assets. It helps reduce the cost of liquidity by sourcing liquidity on demand. For network users, they can use xVia, which is an API for accessing the Ripple network. With this, they benefit from all the benefits that are in the ripple network. Examples of this are the access to liquidity, real time payments, and rich data attachments.
All this makes Ripple a distinct blockchain company. In fact, Ripple is not a cryptocurrency but a company, and XRP is the digital currency it produced. Each month, about 1 billion XRP are released and are available to Ripple to sell on the market. Therefore, as a blockchain company, if Ripple the company went away, XRP would continue because of the interledger protocol that is the basis of XRP.
XRP has risen to become a leading cryptocurrency. At the time of writing, XRP is valued at more than $16 billion. This makes it a much bigger platform in terms of overall value than the likes of Deutsche Bank, which is valued at $14 billion and Dropbox, which is valued at more than $9 billion. Ripple has achieved this by positioning itself as a disruptor in the international money transfer industry. It has also positioned itself so as not to compete with the likes of Bitcoin and Ethereum. Further, it has succeeded by partnering with large organizations like MoneyGram and Western Union.
Broadly, there are two main ways you can make money from XRP. First, you can buy and hold. This is a process where you use an exchange to buy the XRP coins, store them in a wallet, and wait for them to increase in value. Those people who invested in XRP two years ago have seen their returns increase by more than 50%. At the peak, they had gained by more than 600%.
The next option is trading the XRP. This is a process where you use an exchange or a forex broker like easyMarkets to buy and sell XRP. By trading, you can make money when you expect the price to move up by buying. With a CFD (contract for difference), you can also sell – also known as “short” – when you expect the price to move lower. The benefit of trading XRP is that you can take advantage of little movements in the market.