Ripple (XRP) is a popular digital currency, a financial instrument for investors, and a medium for trading. As of Q3 2020, Ripple was ranked third globally in terms of market capitalization after Bitcoin (BTC) and Ethereum (ETH). Read on to learn about how Ripple works, and how you can buy this digital currency.
Founded by Ripple Labs in 2012, XRP is both a remittance system and a real-time gross settlement system.
Referred to as a “PayPal of cryptocurrencies,” XRP allows remote, secure, and instant execution of financial transactions around the world.
Similar to other altcoins (cryptocurrencies other than Bitcoin), Ripple is a cryptocurrency used natively on its own software platform. The token is called Ripple XRP or just XRP. The system uses smart contracts to execute transactions.
Like most cryptocurrencies, Ripple has its own blockchain-based distributed ledger technology (DLT). Ripple’s crypto-ledger has a peer-to-peer and open-source platform that allows the seamless transfer of monetary value in any form. Any fiat currency or other altcoins can also be used to make transactions.
Perhaps the main difference between XRP and other cryptocurrencies is that Ripple is not a “trustless” network. Validators of the crypto-ledger collaborate, but the system prevents them from colluding. Unlike many other blockchain-based cryptos, XRP cannot be mined. Because of this, it cannot be dominated by large mining firms. However, XRP is a centralized currency because the largest treasury is controlled predominantly by insurers of the token.
The law of supply and demand applies to XRP. However, there are several external factors that influence Ripple’s price. These include future regularization of cryptocurrencies and the increasing digitalization of the finance industry.
Ripple Labs operates the payment platform and regulates the amount of XRP in the market. In fact, they hold more than 50% of all existing Ripple tokens to fund their operations and use these for fundraising.
Ripple Labs can make public offerings of XRP at their own discretion, which can significantly change the token’s value.
As mentioned, XRP is a unique currency because it’s not on a trustless network. It is instead supported by institutions and validators who can benefit the system. As a “semi-regularized” altcoin, XRP was positioned as a transmittable token to mitigate the friction and cost of bank to bank transfer of value using SWIFT.
Changes in the Global Finance Industry
Countries around the world are starting to adopt and formalize the use of cryptocurrencies. While increased regulations can shake things up, cryptos are bound to be used more frequently in the long run.
The term “whale” usually refers to individuals or parties that own an extremely large number of assets. In the world of cryptocurrency, Whale Bots are software that can massively execute transactions and move an enormous amount of assets from one currency to another.
While XRP is fundamentally different from Bitcoin and others altcoins, it is still not immune to large movements across currencies and crypto-platforms. Whale Bots can create artificial volatility and drastically influence the prices in a short amount of time.
To buy XRP you first need to have a cryptocurrency wallet. Many online marketplaces that sell XRP offer free digital wallets. These free wallets are ideal for beginners, but having an independent digital wallet works best in the long run. Wallets can store fiat currencies, Bitcoin and other altcoins, along with XRP assets.
Marketplaces can be accessed through the internet or a mobile app. First, load your wallet with a fiat currency like USD through a bank account or prepaid card. Afterward, select how much of the fiat currency to convert to XRP. Once converted, XRP can be stored inside the exchange wallet or sent to an independent wallet.
Look for an exchange that offers XRP and create an account there. Cryptocurrency exchanges are like traditional stock exchanges but they allow XRP trades without having personal contact with traders.
First experiences with crypto exchanges can be overwhelming since they are more optimized for experienced traders. Take time to read and understand how it works. To speed things up, consider transacting with XRP brokers for a fee.
No single person or website can tell when is the best time to buy XRP for certain. It’s a matter of technical analysis, timing, and appetite for risk. The best way is to always check XRP’s price. Most digital wallets have graphs where you can see real-time market fluctuations of the value of XRP with respect to fiat and other crypto currency trading pairs.
As a first-time XRP buyer, use fiat funds or other cryptocurrencies to trade. The market fluctuates dynamically, so wait for an affordable exchange rate. While possible, it is not recommended to use credit cards when buying XRP due to large transaction fees.
For people new to crypto-trading, an email address is required when registering for any crypto-marketplace or wallet. This will generate a special decryption key, which allows private access to the attached funds. Enable two-factor authentication and protect login credentials to keep funds safe.
Finally, remember the factors that influence XRP’s price. The value may rise in the long run but there are several variables that can make it volatile. When making an investment, only spend money that you can afford to lose or kept stored away.
There are a vast number of cryptocurrencies other than Bitcoin. They each have a monetary value and can usually be exchanged for BTC and other cryptocurrencies.
Altcoins have a unique purpose in their platform of origin. Altcoins have diverse utilities including internal smart contracts, side chain solutions, and other features of their respective blockchains. People also use utility tokens to purchase items or services from their corresponding platform or trade them for other altcoins.
One altcoin called PKT Cash (PKT) enables people to monetize their internet.
PKT is a bitcoin-based blockchain that launched in August 2019. It is mined using the world’s first bandwidth-hard proof of work called PacketCrypt. PKT has a one minute block time, making it 10x faster than Bitcoin. There are 6 billion PKT Cash coins that will be mined over 63 years. Instead of a 4 year halving like Bitcoin, PKT has a steady at 10% percent reduction to the block rewards every 100 days called a decimation.
20% of every mined block is paid to a Network Steward address. The Network Steward is elected by POS vote. The Network Steward’s role is to oversee R&D of the PKT Network. The Network Steward provides grants to open source technology developers that submit proposals to build and maintain the PKT Network. If the Network Steward coins are not spent within 129,600 blocks (approximately 90 days), then the coins are burned. As of April 2021, more than 300m coins have been burned, which is more than 10% of the coins mined to date.
PKT Cash is the economic incentive paid to miners who mine PacketCrypt. PKT Cash is rewarded to miners that connect their bandwidth to the PKT Network. PKT Cash is a native currency that provides the utility use case of paying for VPN speed at AnodeVPN, as well as paying for utility bills via PKT Pal’s bill pay services. PKT Cash is designed for low cost microtransactions, and will soon be able to transact for the buy, sell and trade of bandwidth leases in PKT’s decentralized bandwidth trading marketplace.
Just like many other cryptocurrencies, PKT Cash coins are mined using a proof of work. However, PKT Cash is mined using the world’s first proof of work algorithm called PacketCrypt.
Mining pools are required to mine PKT Cash. However, anyone can either set up a mining pool, or they announcement mine into a mining pool.
The two stages of the PKT Cash mining are as follows:
During the announcement mining stage, miners encrypt a bit of data and upload it into a pool. Anyone can announcement mine into the pool of their choice, or multi-pool mine into all pools.
In this stage, miners acquire and download the announcements submitted to their pool from the previous stage. They then validate the announcements and submit to blockchain to be able to get the block reward payouts. Block mining is only possible from within a mining pool and usually requires permission from the pool operator.
Are you thinking of buying and selling PKT Cash? You can start by getting a PKT Cash wallet here first. When you are ready, you may check out the PKT Cash Trading Group on Telegram to see the current bids. As of April 2021, PKT Cash cannot yet be purchased yet from exchanges or brokers online.
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