While Bitcoin is a digital currency intended as a means of payment for goods

and services, Ripple is a payment settling, currency exchange and remittance

system intended for banks and payment networks. The idea is to provide a
system for direct transfer of assets (e.g. money, gold, etc.) that settles in almost
real-time, and is a cheaper, more transparent and secure alternative to transfer
systems used by banks today, such as the SWIFT payment system.

Bitcoin is based on blockchain technology, while Ripple doesn't use blockchain

but uses a distributed consensus ledger using a network of validating
servers and crypto tokens called XRP (sometimes referred to as Ripples).

XRP tokens

XRP – which is the actual cryptocurrency – is a token which is used on the

Ripple network to facilitate transfers of money between different currencies.
Existing settlement systems generally use US dollars as a common currency for
converting between other currencies. This incurs currency exchange fees and
takes time – which is why bank transfers between accounts in different
countries often take up to three days to process.

By first converting the value of the transfer into XRP, rather than USD,
exchange fees are eliminated and processing of payments is reduced to seconds.

Banks including Fidor Bank, Santander, the Commonwealth Bank of Australia

and a consortium of 61 Japanese banks have all said that they are trialing or
implementing applications utilizing the Ripple Network payment system.

XRP is a token used for representing transfer of value across the Ripple
Network. Different to bitcoin, where new coins are created (up the a capped
level) as rewards for participants offering computing power to maintain the
blockchain network, Ripple created 100 billion XRP coins at its inception.

Ripple recently added a new feature whereby, through a smart contract system
(escrows), the company

releases 1 billion of its XRP holding to themselves each month to help fund
business operations, incentivize customers, and sell to accredited investors. Any
unused tokens will be placed back into escrow. According to internal sources,
last month (which was the first month of escrow) Ripple only used
approximately 100 million and put 900 million back into escrow.

Where can I spend Ripple's XRP?

Ripple was never designed to be a currency or a method of payment. However,
there is a small list of merchants which accept payment in XRP tokens online.
For example, you can buy honey, hot sauces and jewelry. You can find a list of
vendors that are supposedly willing to accept Ripple's XRP, but things are
changing constantly and some that are listed there do not or no longer accept
it. The primary use case for XRP is intended to be for transfer of other
currencies (or indeed commodities such as gold or oil) over the Ripple
network." Each time a money (or asset) transferring organization such as a bank
uses the network to conduct a transfer and settlement, the cost is deducted in a
small amount of XRP. This is what gives XRP themselves their value – in some
ways they can be considered “fuel” for the machines which conduct these
transfers.

How can I invest in Ripple?

Ripple has certainly gained a lot of momentum and the list of organizations
which are using it indicates that the tokens themselves will become valued
commodities in their own right. In fact, last year, the increase in value of one
XRP token outperformed Bitcoin or any other cryptocurrency. At the start of
2017 one XRP was valued $0.006. They peaked, at the start of this year, at
£3.87, before quickly crashing down to their current value of around $1 per
XRP.

XRP are traded on cryptocurrency exchanges such as Binance and Poloniex.

Usually, it isn’t possible to buy them with existing government-issued (fiat)
currencies – you will have to buy Bitcoin or Ethereum first, then transfer them
to an exchange to trade them for XRP.

As to the question of “should you?” – well, as I am not a financial advisor I

wouldn’t give investment advice but it is fair to say that the uptake of Ripple by
major financial institutions is generally considered to be a strong indicator of
XRP’s future value. However, before investing in any crypocurrency you
should thoroughly research it first, and make up your own mind about whether
or not it is likely to be a valuable asset in the future. As we have seen, the value
of all cryptocurrencies is highly volatile, and can go down just as quickly as it
goes up. A solid piece