Over the past few weeks, the price of XRP (the currency behind the Ripple network) has gone up a lot. There's been a lot of interest from investors. As we're receiving questions, we want to explain what Ripple is and how to buy it with Bitcoin. Luno does not support Ripple at the moment and is not affiliated with the company.
On cross-border payments
Cross-border payments with traditional banks are slow and expensive. It takes multiple different organisations to make a simple transfer and takes as long as 3-5 days. Fees tend to be high too.
It is often faster, albeit not cheaper, to take physical cash on an aeroplane and give it to the recipient, than to make a bank transfer.
What is Ripple?
“Ripple” can mean one of three things: a company, currency or network.
Ripple is a privately funded company and the creator of the Ripple Transactions Protocol (or the Ripple network.) XRP, also known as Ripple, is the currency.
They aim to provide "secure, instant and nearly free global financial transactions of any size with no chargebacks". They state that a transfer takes mere seconds. The network can handle up to 1000 per second.
While this might sound similar to Bitcoin, there are differences . Bitcoin is a decentralised currency — a store of value and a means of payment— whereas Ripple focuses on a single use case: sending money as fast as information.
Ripple is subject to some suspicion (and good rebuttals), mainly because the supply decreases over time, that it's centralised and, focused on banks and companies, not customers.
Despite the criticism, Ripple has the third highest total value of any cryptocurrency. It's faster than Bitcoin and works by converting money into XRP, transferring, then changing into local currency.
How to buy Ripple with Bitcoin
Below is a simple step-by-step guide to buying Ripple in Luno-supported countries.
1. STEP ONE: GET A LUNO ACCOUNT
Sign up for a Luno account and verify your identity.
2. STEP TWO: DEPOSIT MONEY INTO YOUR LUNO WALLET AND BUY BITCOIN
3. STEP THREE: FIND A BITCOIN-TO-XRP EXCHANGE
CoinMarketCap has an extensive list of exchanges that allow you to buy and sell XRP. Look for the XRP/BTC currency pair ranked by 24h volume.
Another popular solution is an "instant exchange" like ShapeShift or Changelly. Both require you to send Bitcoin (from Luno), and it will convert it to XRP.
👉 Note that we can’t make any recommendations for third party platforms. You'll need to do your homework and decide on an exchange that works best for you.
4. STEP FOUR: SEND YOUR BTC AND BUY XRP
Depending on the platform you’re using, you’ll be provided with a Bitcoin address. You can send the Bitcoin from Luno to your preferred XRP exchange.
Once the funds arrive, simply follow the platform’s instructions on how to purchase XRP.
Since day one, we’ve been keeping a close eye on the progress, use cases and adoption of Ripple and most other cryptocurrencies. We'll keep monitoring the payments, cross-border and remittance landscape and keep working hard to build the financial system of the future.