If you think Ripple mining is a way to make easy money, you are in for a disappointment.
Unlike Bitcoin (BTC), Ethereum (ETH), and many other cryptocurrencies that can be mined using mining software, Ripple (XRP) bucks the trend.
While Bitcoin miners and Ethereum miners made fortunes buying up huge computing power in low-cost electricity areas to produce digital currencies, Ripple miners don’t exist.
When it comes to Ripple, there is no point buying servers to solve the complex math equations needed to mine cryptocurrencies.
The reason Ripple mining is not possible is based on how Ripple is released to the world, and it’s not the same way other cryptocurrencies come into existence.
How Other Cryptocurrencies
Come Into Existence
Most cryptocurrencies need to be mined in order for supply to grow. Mining is the process of locating a cryptocurrency using high-end hardware and mining software.
The way it works is a miner will use powerful hardware (CPUs & graphics cards) to solve math puzzles on blocks, which comprise encrypted transactions.
Each block is added to a chain, called a blockchain, which is the core concept on which cryptocurrencies depend in order to come into existence.
Miners earn fees for verifying transactions and keeping the blockchain running.
When a block is solved, the supply of crypto coins increases and a portion of them are distributed to the miners.
Over time, it becomes ever more difficult and costly to mine coins, but as long as the price of a cryptocurrency is higher than its mining cost, a profit can be earned by miners.
But if mining is the typical way to increase the supply of crypto coins, why can you not engage in Ripple mining?
Why Ripple Mining Is Impossible
Unlike other cryptocurrencies, Ripple coins are released to the world a different way.
The entire supply of 100 billion Ripple coins already exists and Ripple Labs releases coins steadily over time.
By mid-2022, all Ripple coins are scheduled to be released via an escrow process, whereby 1 billion coins are “released” each month.
Because many coins are used, it is theoretically possible that all Ripple coins in escrow will not be released until approximately a decade later.
The approach taken by Ripple Labs has been met with controversy among cryptocurrency advocates because the founders pocketed 20% of the supply, an amount considered to be exceedingly high.
In their defense, half of the Ripple founders’ supply has already been donated to non-profits and charities, and a chunk of CEO Chris Larsen’s stash was donated to the Ripple Foundation for Financial Innovation.
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Ripple vs Bitcoin:
Which Cryptocurrency Is Best?
Unlike Bitcoin, which is truly decentralized, Ripple has been criticized for using a few validation nodes.
But Ripple has become very popular as a significant competitor to Bitcoin because of its ability to support real-time money transfers.
It also known to be significantly faster at processing transactions than Bitcoin and uses less electricity than Bitcoin.
Ripple is also currency agnostic, meaning it can support money transfers in virtually any major fiat currency.
The way it works is the Ripple Path-finding Algorithm searches for the fastest and cheapest path between two currencies.
For example, if you wanted to convert U.S. dollars to euros, the fastest path might be a single hop between one currency and the other, or it might be a multi-hop path between say USD to NZD to GBP to EUR.
>> Related: ZCash Vs Ethereum – Which Cryptocurrency Is Better?
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Should You Buy Ripple?
Each of the major cryptocurrencies has unique advantages but none are perfect.
Bitcoin is by far the best known but it is nowhere near as fast Ripple. It also lacks the anonymity of Zcash or Monero.
Ethereum can be bought or sold as a cryptocurrency but it is best known for its smart contracts. In fact, many other cryptocurrencies launch using Ethereum blockchain technology.
Another Ripple competitor, Litecoin, has been long mooted as the best cryptocurrency for payments.
Along with these cryptocurrencies, hundreds of other cryptocurrencies exist, but should you buy them, and if so, what are the best cryptocurrencies to buy?
Like stock market investing, a conservative approach to cryptocurrency investing involves buying a diversified list of cryptocurrencies rather than trying to pick a single winner.
So how do you buy cryptocurrencies?
How To Buy Ripple
The best known digital currency exchange is Coinbase, which supports trading in the major cryptocurrencies like Bitcoin, Bitcoin Cash, Ethereum, and Litecoin.
Other digital exchanges, like Kraken and Gemini, support a much broader list of cryptocurrencies.
And increasingly other brokers, like Robinhood, are making cryptocurrency trading more accessible to the general public by waiving transaction costs.
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But fees are only one of the factors that should influence your decision to buy cryptocurrencies. The most important criterion is security.
Hackers are constantly trying to break through the defenses of cryptocurrency exchanges so the best way to buy Ripple or any other cryptocurrency is to find the most secure digital currency exchange.
Next, look for low transaction costs in the cryptocurrencies you wish to trade.
Coinbase is probably the easiest one when it comes to buying and selling cryptocurrencies. You can even buy Bitcoin, Ethereum, or Litecoin using a credit card.
Like other top exchanges, it features two-factor authentication and top notch security protocols.
>> Coinbase vs Kraken: What Is The Best Cryptocurrency Exchange?
>> Litecoin vs Ethereum: Which Cryptocurrency Is Best?
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