XRP, formerly known as Ripple, is still the third-largest cryptocurrency by market cap at the time of publishing. While its price is not particularly high, the coin still has a lot of use, and its daily trading volume is over $1 billion even during price drops.
As you may know, XRP’s usefulness comes from the fact that it is used for powering different payment solutions, created by its parent company, Ripple. Read more about what XRP is and learn how to buy Ripple.
A must-do before you buy Ripple
There are two things that you must do — set up a cryptocurrency wallet, and carefully choose a digital asset exchange.
1) Setting up your crypto wallet
You may have heard that crypto exchanges have their own wallets, which is where you would usually deposit your coins when you want to trade them. This is also the place where your newly-bought coins are stored. However, these wallets should not be used for storing coins over long periods.
In fact, you should only use them during the trade. As soon as you deposit your coins, you should start trading. On the other hand, if you decide to store your funds on an exchange, you should know that the exchange will be responsible for your coins. While this might sound like a good thing at first, keep in mind that your coins might be taken from you if the exchange gets hacked, goes bankrupt, or alike. Because of this, it is important to get your coins out of the exchange wallet, and transfer them to your private wallet if you don’t plan to start trading anytime soon.
Basically, you are only borrowing its wallet, but it still remains fully available to the exchange. This is a problem, because you don’t really own your coins if an institution such as a crypto exchange has access to them. If you wish to be the sole owner of your coins, you need to transfer them to a private wallet. You can learn more about crypto wallets by reading our article about them.
There are many dangers in leaving your coins in an exchange’s wallet, such as being exposed to hacking attacks, falling to an exit scam, or having your account and funds frozen by the exchange. It is much better to avoid risks and simply get your own, private wallet, and then transfer the coins you don’t plan to use for trading into it.
2) Choosing an exchange
The second thing to do is to pick a proper exchange you wish to trade on. You might think that it doesn’t matter which exchange you choose, as long as it offers XRP trading pairs, right?
Well, that is not exactly the case. Of course, it is important for an exchange to offer XRP (not all of the exchanges have it listed), as well as to service the region in which you are located. It should also accept fiat currencies, if you are buying XRP with your euros, dollars, or another fiat currency. If you already own Bitcoin, Ethereum, or some other coin, you need to find an exchange that offers trading pairs which would put XRP against the coins you own.
However, that is not all, and you must choose an exchange according to other criteria, too. If you are interested in which exchanges are available to which region, we have talked about that in our article on how to buy Bitcoin.
How to choose the best exchange to buy Ripple (XRP)?
When choosing an exchange, you need to pay attention to several specific details about the exchange you are interested in. As mentioned, they need to offer XRP, accept fiat (if you are buying it in exchange for traditional currencies), and alike. But, you should also pay attention to:
1) Is the exchange regulated?
Most of the exchanges these days are regulated, at least when it comes to the big ones. This is important, because being regulated by the authorities means that the exchange has proper security, and that it is not a scam. In other words, by using a regulated exchange, you reduce the chances of being tricked out of your money by the exchange itself. A few years back, before the regulators took the crypto space seriously, numerous scammers launched fake exchanges and stole the investors’ money as soon as they deposited a large amount of crypto into their wallets.
These days, however, with the exchanges being approved by regulators, this is unlikely to happen. There is still a risk of the exchanges getting hacked or crashing, although high security often ends up being enough to prevent such incidents. However, even if it does happen, the exchange will have to compensate you for your loss.
2) Does Ripple (XRP) have an AML policy?
As mentioned, regulated exchanges have to follow a certain set of rules in order to be approved by the authorities. This means that they are likely to have an AML (Anti-Money Laundering) policy, but you should still check to be certain. An exchange without a policy like this is a bad idea, because it could be shut down by the government itself, or as we mentioned before.
Just because most exchanges are regulated, that doesn’t mean that you should let your guard down. Remember — the crypto space still remains risky and uncertain, so you do not want to take unnecessary risks.
3) Is it easy to use?
Another thing to keep in mind is that not all of the exchanges are equal. In fact, they tend to be quite different when it comes to the user interface, as well as in terms of features that they offer.
Some exchanges offer a great number of tools, charts, and all kinds of additional options. For a professional trader who likes to keep all of those things close at hand — this is just what they always wanted. However, for someone who is new to crypto trading, it can be incredibly complicated and intimidating.
With that in mind, you might want to consider picking a user-friendly exchange, which won’t burden you with all this additional information.
4) Always look into the security
It goes without saying that security itself is one of the most important aspects of every exchange. This is the place where you are depositing your money, after all. That is why it needs to have as many security measures as possible, such as DDoS protection, 2 Factor Authentication, cold wallets for storing funds, and more.
An exchange without the proper security is exposed to hacking attacks, and if one ends up happening when your money is stored within the exchange’s wallets — you might be robbed of it. If that happens, you might be compensated, or not, depending on how much money the exchange itself has, and how much ends up being stolen from you and others.
Interestingly enough, it might be smarter to use an exchange that was already hacked in the past. While this might seem contradictory, the fact is that a hacked exchange likely knows its weaknesses, and is either keeping an eye on them, or it already patched them up, which makes it safer than the one which did not have its own flaws exposed.
The exchange which is regulated likely has proper security measures already, so you can consider them good enough. Even so, you should always remember to do your research and find the best ones among them.
That is pretty much all you need to know in order to buy Ripple (XRP) as soon as possible. Simply put, you need a good, regulated exchange with strong security which has listed XRP and has a good number of trading pairs. It also needs to accept fiat, if you don’t own other coins.
Other than that, you should set up a wallet that supports XRP, and you will be all set to finally begin working with Ripple’s coin.