Is Ripple the “Next-Generation” of Money Transfer?

There has been a lot of chatter over the last year when it comes to cryptocurrencies. One particular currency that has made headlines, turned common people into millionaires and grabbed the attention of regulators is the “king” Bitcoin. Such has been the volatility of this particular cryptocurrency that in one study its variance was calculated at over ten folds than that of S&P 500 (Bloomberg, 2017). Another shortcoming of Bitcoin is that investors primarily use it as a speculative asset, without any real use other than to make capital gains.

It is precisely due to this reason that a series of other cryptos have been developed, proving to be much more useful in terms of their application and less volatile in absolute terms. One such Crypto is Ripple, which has risen substantially over the last year, from a mere $0.0054 in Jan 2017 to its peak of $3.5 in the first month of 2018. Though Ripple has fallen substantially over the last few weeks ($0.93 as of this writing), wide variety of its uses, particularly in banks and money exchanges, should take this crypto past its peak.

What is Ripple?

Ripple can be classified as a transactions network provider that enables banks and other financial institutions to transfer funds or any other asset much more efficiently and at a low cost. The currency associated with Ripple is called XRP and is practically used for the same purpose of quick transactions between two customers and with minimal cost (less than 1 cent per transaction). Firms using Ripple have substantially reduced the lead time to transfer funds. On average 1000 transactions can be processed by Ripple in under 3 seconds.

Ripple and the Blockchain

Ripple uses a different variation of the block chain network used by Bitcoin and other cryptos. Bitcoin allows individuals to transfer the currency and decentralizes the verification of the transaction through a process called “mining”. In other words, anyone on Bitcoin’s block chain network can verify a particular transaction and earn some of this currency as a result.

On the other hand, Ripple does not completely conform to the traditional blockchain mechanism. If for example, bank A wants to pay bank B for the goods it has purchased through Ripple; Bank A will have to communicate with intermediaries called “Gateways” who first verify the transaction and then transfer the funds or an asset to Bank B. Please note that these intermediaries are trust worthy individuals who have done a reasonable job transferring assets from one party to another in the past.

Gateways not trusted or used in the past by either party are not used by the Ripple network. So, for example, if Bank A and Bank B have no trusted intermediaries between each other, they cannot use Ripple’s network to transfer any asset. Therefore, the only other way to transfer funds is through the XRP, which is similar to transferring Bitcoins from one individual to another with other users on the network checking the authenticity of the transaction.


One major difference between the two is that unlike Bitcoin, which has a maximum of 21million coins and are produced solely through mining, Ripple has already created 100 billion XRPs and distributes it according to the demand for the currency. Also, there is no limit to the creation of XRPs.

Buying Ripple in Pakistan

Due to its low price and loads of potential, Ripple has the capability to provide abnormal returns to the investors. Moreover, it costs around 100rps for an investor in Pakistan to buy a single XRP, which is much more affordable than other cryptos such as Bitcoin and Ethereum.

Unfortunately, buying Ripple in Pakistan isn’t as easy as buying some of the more famous currencies. However, there is one prominent way you can do that:

  • Set up an account on a reliable exchange such as and buy a fraction of Bitcoin or Etherium
  • You will be asked to verify your account through an email and subsequently by adding your phone no. and need to upload some other documents (drivers’ license, ID card etc.) for security reasons
  • You can choose variety of options to fund your Coinbase wallet. Options include Credit/debit card or bank transfer
  • Once you have sufficient money in your account you can buy Bitcoin or Etherium
  • Once you have bought either one of these cryptos, you can exchange them for other cryptocurrencies by opening up an account on– a website that lets you exchange cryptos
  • In order to transfer cryptos from Coinbase wallet to Binance wallet, you need do the following:
    1. Go to your Binance account and get your unique Bitcoin or Etherium wallet address (you will find your wallet address under the funds tab)
    2. Copy this address and paste it on Coinbase’s website by clicking on send under the accounts tab, entering the amount you wish to trade, and then choosing the currency you would like to transfer
    3. Coinbase charges a small fee for transferring the currency to Binance. Please note that it might take several hours for the currency to get transferred. So sit tight and do not panic!
    4. Once the currency is transferred to your Binance wallet, you can easily exchange it for Ripple, by checking the price of Ripple per quantity of Bitcoin or Etherium. You can also post your own price if you believe that the price quoted by the exchange is higher than your valuation. If that price is accepted by a buyer, then you are good to go!

Ripple and the future

Ripple, primarily one of the largest money exchanges in the world, and American express, one of the largest credit card firms in the world, have started testing one of Ripple’s services in their processes that would substantially reduce costs for the customers and increase efficiency.

Further, around 100 financial institutions have signed up with Ripple, so as to use its services. Moreover, rumors are circulating that the government of Saudi Arabia and the largest bank in the world by asset, JP Morgan, will be testing Ripple in their transactions. If all of these entities successfully implement Ripple in their processes, then surely the price of XRPs should go higher than what it is at the moment.