XRP was created in 2012 by engineers Jed McCalebm, Arthur Britto and David Schwartz, for use on their money transfer network, Ripple. This means that XRP is the native cryptocurrency of the Ripple blockchain.
XRP, which is up in value by more than 20% since the start of 2023, can be used to finance transactions on the Ripple payments system – an alternative to the global SWIFT money-transfer network.
Some investors use XRP to buy other cryptocurrencies, while others just hold on to the tokens to speculate on their value. Here’s more on XRP, including how to buy and alternative ways to invest in the cryptocurrency.
XRP, like any other cryptocurrency, is volatile. The UK’s Financial Conduct Authority (FCA) has warned time and again that anyone who invests in cryptocurrency should be prepared to lose everything.
What is XRP (Ripple)?
XRP is a cryptocurrency. It is the native cryptocurrency of the Ripple blockchain. In terms of market capitalisation, it’s the world’s sixth biggest cryptocurrency.
The Ripple blockchain is a money transfer network designed to serve the needs of the financial services industry. It was created as a rival to the leading global money transfer network SWIFT.
Transactions of any kind on the Ripple network have to be paid for using XRP. The standard fee to conduct a transaction is 0.00001 XRP. With XRP currently priced at 34p, that makes a transaction cost £0.0000034.
How to invest in XRP
You can buy XRP through a crypto exchange, or a crypto broker.
Crypto exchange platforms allow buyers and sellers to trade different cryptocurrencies directly, whereas a broker will interact with an exchange to acquire cryptocurrencies on your behalf before selling them on to you.
When choosing a crypto exchange, remember that some will only deal in cryptocurrencies. If you have not purchased cryptocurrencies before, you will need to choose an exchange that accepts fiat currency (such as Sterling).
Signing up to a crypto exchange or broker
If you opt for a broker, check its rules regarding coin storage. Some brokers won’t let you move cryptocurrencies out of your account. In practice, this gives you less control over where your XRP is stored.
The FCA has a list of registered cryptoasset companies to consider.
Decide how you’ll pay for your XRP
Once you have signed up to a crypto exchange, the next step is to fund your account. Most platforms allow you to do this via bank transfer or debit card, or from a crypto wallet.
It is not recommended to use debt to fund cryptocurrency purchases, for example by using a credit card.
You might be charged transaction fees for funding the account, which can vary by payment method.
Place an order for your XRP
Open your chosen crypto exchange and navigate to the XRP currency. If you have trouble finding it, you can usually use a search bar function.
Next, enter the amount you want to invest and follow the exchange’s prompts to complete your purchase.
Store your XRP safely
Cryptocurrencies are not protected by the Financial Services Compensation Scheme, unlike fiat currency held in bank accounts.
Once you have purchased your XRP, it’s up to you to store it securely.
If your XRP gets stolen, your account access details are lost, or the exchange you used went bust, you would lose all your holdings without being entitled to any compensation.
If you invest in XRP through a broker, you may not have a say in where it is stored. With a crypto exchange, on the other hand, you can choose to move your holdings elsewhere (although many offer integrated online wallets.) Some exchanges will charge you a fee to do this.
When selecting a crypto wallet, you have two options. ‘Hot’ wallets (like those offered by exchanges) hold your assets online. This can be more convenient, but your coins are also more exposed to hackers.
‘Cold’ wallets store coins offline. They take the form of hard drives or solid state drives, separate from your computer. Although cold wallets offer better security, you may lose access to your assets permanently if your access codes go missing.
FAQs
Is investing in XRP safe?
XRP is as unpredictable and volatile as any other cryptocurrency, which means there’s no telling what might happen to the value of your investment if you were to buy in.
The UK’s financial services watchdog has repeatedly warned would-be investors that they could lose everything they choose to invest if they bet on cryptocurrencies.
If you’d have bought XRP at its high point of £1.99 in December 2018 and held it until now, for example, your investment would have lost 83% of its value.
For the time being, the crypto market is also unregulated in the UK, which means there’s no redress for participants if things go wrong such as, for example, the collapse of the FTX crypto exchange.
But if you’re aware that the value of your investment can go down as well as up, you buy from a reputable crypto exchange and store your keys securely, buying XRP is ‘safe’.
What's the cheapest way to buy XRP?
Whichever crypto exchange you choose, it’s best to credit your account via direct bank transfers. Debit and credit card deposits typically attract fees of up to 3.99%.
How is XRP used?
Some people use XRP to buy other cryptocurrencies. Some invest in XRP to speculate on its value over time. Others use it to pay for transactions on the Ripple payments network.
Where can I buy XRP in the UK?
XRP is available from several crypto exchanges, from large ones like Coinbase and eToro to smaller ones like Bitstamp.
