What is Ripple

Ripple Cryptocurrency is an open payment system in beta. Its goal is to allow people to break free from the financial institutions like the banks, credit card and other networks that enforce fees and delays. As per market size and capital, Ripple is the third-largest cryptocurrency, sitting just behind Bitcoin and Ethereum.

Ripple now has billions of dollars’ worth of cryptocurrency on account. It was built as a digital payments network for real-time financial transactions, and is also the core owner of Ripple XRP, the digital coin which increased 40 times in 2017 alone.

To avoid confusion, the network is referred to as Ripple, and the ripple coin as XPR – Ripples. The frequency of releasing new coins into the system influences the price and rate. In total, there are 100 billion XRP that exist, and Ripple owns approximately 60 percent of the XRP. If you take all this valuation into account, it would be worth more than several US tech startups put together. XRP is majority owned and tied to a single company.

Ripple is constantly investing in its network and growing partnerships with global firms and financial institutions. Some of the banks that have signed on to use Ripple include BBVA, SEB, Start One Credit Union, and Cambridge Global Payments. As the market and network continue to grow, Ripple’s value has potential to further increase.

Advantages of Trading Ripple with AvaTrade

Trading Ripple with AvaTrade can be beneficial in ways that regular cryptocurrency exchanges do not offer, such as the following;

  • Short selling, also known as “going short”, by shorting an equity or currency of any kind you believe the value will fall. It means that you sell an asset without owning it. There is the hope that its price will fall and you can buy it back for a lower price to make a profit on the trade.
  • High leverage, in trading provides a trader the opportunity to trade on much larger amounts than he would have on his own. It is ultimately a loan from the broker to a trader. Leverage can increase profit, however can magnify losses as well.
  • Auto trading, known also as robot trading, uses computer software applications to employ trading strategies to buy and sell. These systems can be pre-programmed allowing computers to monitor the market and sales.

When trading with AvaTrade you are speculating on the price changes of the digital coin, and not physically purchasing it.

Ripple Model

Based on the Ripple website, their concept is a “basic infrastructure technology”.

The idea of Ripple was developed in 2004 by Ryan Fugger from Vancouver, Canada. During the following ten years, the digital coin was being developed until finally in 2014 various large banks started using Ripple and the payment networks. The Ripple system, for them, has advantages like the distributed ledgers, price and security. They offer this alternative to “remittance “or a “settlement system” option.

The company behind Ripple is “OpenCoin”. There are two separate entities that make up the Ripple; There is the payment network and the actual currency on the payment network. Building on the decentralised digital system, Ripple’s main idea is to work with different payment systems worldwide.

Ripple allows businesses to perform transactions within 3-5 seconds. The payments are processed and received automatically, and are irreversible. Various financial institutions worldwide have established partnerships and started using the Ripple system.

In many ways, Bitcoin and Ripple are similar. Like Bitcoin, the Ripple coin has a limited number of units that can be mined. Both can be transferred from peer to peer, and both have digital security keys to prevent face transactions of coins. Payment information on the ledger is private, however transaction information is public.

Ripple insists that they provide faster transaction times than Bitcoin, because confirmations of transactions can go through their network very quickly. There is no waiting on block confirmation, and transactions go through the network very fast.

The Differences Between Bitcoin and Ripple

Similarities:

  • Both are open source – not owned by any one company or any individual
  • Transactions for both can be anonymous and free on the internet

Differences:

  • Ripple is faster in processing transactions and more energy efficient than Bitcoin
  • Ripple is a decentralised transaction network which has a digital currency, Bitcoin is a decentralised digital currency
  • There is a set number of Bitcoins which is still slowly increasing
  • There is a defined number of XPR (Ripples) of 100 billion

Main difference:
Bitcoin wants to change what we are paying with; Ripple wants to change how we are paying.

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The maximum accumulated position size for Ripple is 1,000,000 RIPPLE (10 LOTS), details in our Conditions and Charges page