Back in the year 2017, when a cryptocurrency (specifically Bitcoin) just found its way onto the spotlight, it brought a whole new perspective in the world of finance and how cryptocurrencies came into inception.
Among the vast array of digital coins, came Ripple, created by Ripple Labs Inc and acts as a digital payment solution system in origin until it developed its own currency now known as XRP.
Fast forward to this year and XRP trading has become a profitable venture. Featuring as a lightning fast, cost-effective, and scalable asset rivaling other prominent digital currencies, XRP also works as a digital token for representative value across the Ripple Network and can be a mediator of cryptocurrency and fiat currency.
How Ripple works
Ripple is a decentralized currency (a currency with no central bank) which is exchanged peer-to-peer through a network of digital gateways called RippleNet. A secured public ledger keeps track of the exchanges and payments throughout the gateways. As for XRP, these gateways prices every transaction through this.
Ripple works differently compared to other cryptocurrencies as unlike them, they were not intended to replace fiat currency. This makes Ripple almost one of its kind.
XRP is different from Bitcoin in a sense that it isn’t produced through mining. Instead, the company behind it manufactures XRP themselves for supply. This would mean that RippleLabs has complete control over it which might be a let-down for some people looking to invest in it.
Steps for trading Ripple
Open an Account
Before you can start investing in any position, you’ll need an account with a leveraged broker. There are many certified and authentic brokers out there that you can find online along with their user reviews and overall experience.
Developing a trading strategy
Next step is to develop a simple and easy-to-understand trading plan that can be beneficial for you in the long run. Many educational and research materials can be found online and before you can pick one to stick to, you may have to consider a few variables to better your plan’s effectiveness.
Do your research
Make sure to make use of technical tools that come with your broker’s trading platform. Depending on which broker you’ve made an account with, you will be able to see the value of XRP’s price movements in the market, giving you valuable insight on its future direction and to make a well thought out decision in preparation.
Place a trade
Once the previous steps are looked into, you may open your first position. The basic “buy low, sell high” tactic is the main goal here if you are looking to make a profit out of it.
Bottomline
Ripple’s XRP wasn’t built like a cryptocurrency and it sure wasn’t intended to. However, its properties are very similar to one which makes it a viable option to make profits. While the supply/demand aspect of XRP is still in the works and has made some traders worried or not like the odds, Ripple still has a positive outlook from the rest and has the potential to create great investment opportunities.