Ripple (XRP) - A Report Brought to You by Q8 Trade
What is Ripple?
Although Ripple has its own currency, its value may be more prominent due to its very fast payment system.
Ripple is a startup company in San Francisco, California where it designed a payment system similar to blockchain, a payment protocol that works similar to the payment system, the remittance and currency conversion network and works with cryptocurrencies, paper currencies and commodities. Ripple allows customers to integrate the protocol into their own systems.
The National Bank of Abu Dhabi (NBAD) has started using technology for some of its transactions, especially for cross-border transactions, as it allows its customers to transfer money in real time.
Ripple is currently the third largest cryptocurrency after Bitcoin and Ethereum in terms of market capitalization. It is also the largest competitor to Bitcoin.
The Ripple cryptocurrency
Ripple official symbol is XRP. The price of a Ripple can also be combined with other currency symbols in pairs such as USD and EUR. Thus, the quoted name of Ripple against the US dollar is: USD/XRP.
Many professional traders strongly recommend trading first with a demo account before moving through live markets.
There are certain advantages of this virtual currency. One of which is that it does not rely on a single company to secure and manage its database of transactions and therefore, there is no waiting when confirming any block.
There is a difference between Bitcoin and Ripple settlement times. As for the difference between the encrypted Bitcoin and Ripple coins, the time of Bitcoin increased to 168 minutes during the 27th of March 2017 while the Ripple currency took an average of only 3.7 seconds.
The money transfer between Spain and Mexico was done through BBVA and it turned out that Ripple only needed a few seconds while the normal transfer would have taken about four days to clear.
Cryptocurrencies share many similar characteristics and Ripple is a bit like Bitcoin yet there are some differences, including:
- Ripple offers faster leveling time.
- Ripple uses the iterative consensus process while Bitcoin uses the so-called “mining” process.
- Ripple is a digital currency versus network transactions while Bitcoin is a decentralized digital currency. Ripple is basically a transaction network that also contains the XRP currency.
Is it possible to mine Ripple?
No, Ripple cannot be mined. Ripple started with a fixed number of digital coins and has no expansion according to the Ripple protocol rules. Therefore, mining is not required to extract a new coin. The total value of the XRP created amounted to about 100 billion Ripple coins but the currency flow is controlled by the company.
Ripple announced its intention to freeze about 88% of Ripple’s assets in addition to selling one billion Ripple coins each month so freezing and a steady flow will allow traders and investors to rely on a certain level of predictability in relation to its offer.
How Ripple works
Ripple emphasizes its important role in the global settlement network which allows financial parties such as banks to reduce their transaction costs. At the same time, Ripple also offers a premium enhanced service with direct and instant transactions.
All payments are encrypted and are designed to fit the existing infrastructure of banks. Ripple highlights the following as its main features:
- Distribution: Banks can deal directly with each other without an intermediary contact.
- Security: Privacy of transactions.
- Scalability: High-standard levels of increased processing.
- Interoperability: Ability to connect multiple networks with each other.
The Ripple Network is essentially enabling faster payments almost instantaneously and is cheaper and more secure with direct access. Not surprisingly, Ripple is being increasingly used by the banking sector which has not benefited much from modern technology compared to some other industrial sectors.
Does Ripple use blockchain technology?
Ripple uses a structure that handles payments in a manner similar to the blockchain concept. According to Ripple, it uses a log book, a subscriber to process transactions allowing them to work across borders and in any batch size. XRP helps facilitate transactions between the two parties in the absence of a direct exchange. The Ripple currency has no counter-party risk as it does not depend primarily on a third party.
Who invented Ripple?
Ripple is believed to have been founded by a scientist named Ryan Fugger but has undergone remarkable development since its inception. Ripple began to grow during 2004 when Ripple Pay was created by Ryan Fugger in 2011. The system was redesigned making it faster and more energy-efficient than Bitcoin and in 2012, “OpenCoin Inc.” was formed a period later. Briefly, the RTXP protocol was developed based on the concepts of Fugger. The protocol provided for the ability to bypass fees and waiting times for the traditional correspondent banking system. Since 2012, Ripple has also focused on expanding the banking market.
Ripple trading methods
The first step to speculating on Ripple is to decide how you want to take advantage of its movements. You can trade Ripple in one of two main ways:
- Buy the Ripple currency from a stock exchange and keep it in the hope of selling it and making gains.
- Leverage trading has been used to speculate on Ripple price movements. When you trade with leverage, you do not have to put the total value of your position in advance so you can get more exposure without risking additional capital. However, your profit and loss will be calculated based on the overall size of your position so there is potential to amplify profits as well as losses.
How does Ripple work?
Ripple works as a peer-to-peer network for payment, a decentralized network called RippleNet which allows near-instantaneous transfers of any trading currency, whether traditional US dollar, pound sterling or virtual currencies such as Bitcoin or Litecoin. XRP itself acts as a bridge that enhances the network.
All payments made using RippleNet are kept in a public register. Transactions are accepted by consensus so there is no central authority that disrupts the business.
By linking multiple gateways together, RippleNet can convert almost any currency through any transaction and can also be used to transfer and exchange commodities such as gold. Gates always price anything traded through XRP which means you can use it as the basis for any transaction. Convert the currency to XRP and then convert it back on the other side. XRP is converted immediately and in a very cheap way because it requires fewer gateways.
What factors affect the price movements of Ripple?
Ripple works differently from other cryptocurrencies significantly and the intention behind it has never been to replace cryptocurrencies. Therefore, there are several unique factors that may affect the price movements of this instrument including the following:
- The company: Unlike other virtual currencies, XRP is not produced by mining. The producer is completely in control of the offer which gives it great control of the price of the Ripple which has aroused the concern of some traders.
- General perception: Ripple is often referred to as the most misunderstood virtual currency worldwide. Ripple’s strong rise in 2017 is due to the belief of many investors that it will challenge Bitcoin and other cryptocurrencies further contributing to its global payment solution.
- Banks and institutions: Ripple’s main users are banks and other investment institutions.
- Other virtual currencies: Investors interested in virtual currency in the large market value of Ripple along with its low costs will find a great opportunity to buy. Ripple will follow the rise in the cryptocurrency market but if the market goes down, it can also fall quickly.
- Digital exchanges: If one of the major virtual cryptocurrency exchanges such as Coinbase for example announces its inclusion of Ripple, millions of potential buyers will have access to the currency which could raise its value.
Who supports Ripple?
Ripple works independently of any central bank and in a similar way to other cryptocurrencies such as Bitcoin, Ethereum and Litecoin.
This is a huge difference compared to known currencies such as the US dollar and the euro where these currencies are traded as well as printed in both the United States and the European Union through their respective central banks.
Ripple decides on the flow of its currency through the market which is set at one billion Ripples each month; It flows according to the Ripple protocol.
What are the risks of XRP trading ?
As with any financial asset, there are risks that the price will move up or down so the Ripple currency is vulnerable to market volatility depending on the supply and demand. However, price volatility is what allows traders to trade.
Given Ripple’s wide acceptance as a financial network by major financial firms and banks, it seems unlikely that there will be any major unrest in the near future.
Last but not least, each Ripple account should have a small reserve of about 20 Ripple currencies with a transaction fee of about 0.00001 XRP per trade. These procedures are implemented to counter and fight hackers who want to overload the network but in general, these costs are considered very low and almost negligible.
Can Ripple be considered safe for trading?
The answer is yes, as trading with Ripple is as safe as trading Bitcoin, Ethereum, Litecoin or any other asset but it also comes with associated risks.
What is the future of Ripple?
In 2017, Ripple (XRP) has attracted the attention of many investors because its network is much faster in processing payments and has announced major global partnerships represented by some 60 organizations around the world including renowned companies such as UBS, RBC, UniCredit and Santander which will also connect about 40% of Japanese banks to Ripple.
RBS and BAML will use Ripple for both retail and commercial payment services. NBAD uses Ripple through global financial transactions. These events contributed significantly to its rise from just around $0.1000 during the beginning of 2017 to its highest level at $3.3381 by the end of 2017. However, after reaching an all-time high, its value crashed in 2018 to its lowest level in 2018 at only $0.2448.
The future is uncertain for Ripple which means that the use of appropriate trading products for cryptocurrencies is important. By trading on CFDs, traders invest on Ripple and other cryptocurrencies depending on their point of view.
Ripple CFD trading with Q8 Trade
A CFD is a consensus contract in which the difference in the price of the XRP is exchanged between the time you open your position and until you close it. CFDs can be bought and sold. Trading CFDs allows traders to predict whether the price of an asset will rise or fall without having to own assets. There are also advantages in trading CFDs, including:
- Options within a huge market
- Liberalization of capital
- Possibility of buying and selling
- Reversing the basics
What steps should be followed when trading Ripple with Q8 Trade?
- Creating an account: Before opening a CFD trading position, you first need an account with a leverage provider.
- Prepare a trading plan: A comprehensive trading plan can be useful to keep up with market movements, helping to maximize gains and profits while minimizing losses.
There are some key elements of each trading plan which makes it unique so keep in mind of the following:
- What you want to get including daily, weekly, and monthly goals.
- Whether you want to trade Ripple exclusively or trade in other additional markets.
- To what extent are you willing to take risks in each trade? This may help you know where to place stop-loss orders.
- The ratio of your profit to risk or the potential profit on which the risk is based.
- Searches: After learning how Ripple works and the factors responsible for moving Ripple’s price, you still have to make sure that you are up-to-date with the latest developments surrounding XRP. You may also want to consider technical analysis at this stage so you can decide when you want to trade.
- Doing the trade: This is done using the web trading platform or one of it mobile apps to open your first position. Entering the size of your position which helps determine your total profit or loss and can also add a stop which would close your position if the market moves against you to a certain extent. If you are expecting a higher Ripple value, click Buy.