What Is Ripple XRP & How To Get Ripple on GateHub Exchange
Welcome to video 4 in my series about cryptocurrency. In this video we’re going to talk about Ripple.
Oh, the allure of a cryptocurrency that is in the top 5 and is trading under $2. So, what we’re looking at here is coindesk.com, I’ll zoom in here on URL so that you can see exactly what page I’m on. This website right here hands down does a better job in my opinion of explaining what Ripple is than any other website that I’ve visited. You know here it talks about Ripple being not only a digital currency but also as a payments protocol and they’ve got some other examples here that are really really good. And I love this example right here say for example, that Alex is in the United States and Beth is in Europe so since 1974 the banks have use a system called Swift for this and the problem with Swift is that it takes you know 1 to 3 days to get a transaction through. With Ripple using XRP, the transaction time would be instantaneously. So, back to our example, Alex goes to his agent and gives the agent cash. Agent A calls agent B and says hey I’ve got the cash and agent B gives the cash to Beth. So, she’s got it instantly.
In this example, no actual cash has changed hands between agent A and agent B. So, there’s got to be a ledger involved where agent B knows that he’s going to get paid back by agent A. So, further down they talk a little bit about well what if agent A doesn’t know agent B? But they have a mutual friend agent C and essentially it just kind of builds from there until it looks like this.
So, here we’re going to take a look at the live Ripple network and as you can see there are a finite number of nodes in the network. Ripple’s taking a lot of criticism about this because even though it is still decentralized it is closed and there’s only I think it’s 55 nodes in the system. So, down here a little bit further they talk about well who keeps track of all the IOUs? And right here the part that resonates with me is that the IOUs are updated by everyone simultaneously in the Ripple network. Well that to me sounds a lot like Block Chain technology. So, you’ll never hear anything about mining Ripple and the reason for that is because it has been 100% pre-mined and I guess the inventors of XRP have decided to let out a little Ripple at intervals that they see fit.
So, in our international example because the dollar is exchangeable with XRP and the euro is exchangeable with XRP, XRP can be used to fulfill the obligations of the transaction and do it much cheaper than the Swift system and also do it instantaneously.
All right, so I have taken us here to ripple.com and wanted to show you that there are a number of different ways to get XRP which is the symbol for Ripple and if we pan down here you can see we’ve got this Bitstamp “how to buy XRP on Bitstamp,” Kraken and the third one was Gatehub. I just happen to settle on Gatehub, there’s actually more of them here now than there was when I was in here the first time and that was about a month or so ago.
So, I’ve taken us here to gatehub.net and obviously you’ll sign up to create an account and once you log in this is my home page right here I haven’t added an image of myself. This is one that quite frankly you are going to have to be a little bit patient for. Setting up the whole account, it took a good 2 or 3 days to actually get money in the account. You can’t do anything with your Ripple account unless you have XRPs in your Ripple account and the only way to get XRPs in your Ripple account is to move some Bitcoin over from your Coinbase account. And if you’ve watched the previous video then you know all about how to put money into a Coinbase wallet or you know it doesn’t have to be Coinbase but let me use Coinbase as the example. Gut here I am on my home page and you can see that I have a wallet.
So, the first thing you’re going to want to do is you’re going to want to create a wallet. So, we can go over to the “wallet” tab right here and all you’re going to want to do is just add a wallet like that. So, if I remember correctly from when I first signed up you create a wallet but then of course you’ve got to put Bitcoin in your wallet.
Ok, so, before you go and hit “deposit/receive” what you’re going to have to do is you’re going have to connect a gateway. So, let me go ahead and click “connect a gateway” and we’re going to be connecting with Bitcoin so I’ll click that and then I’ll hit “confirm” again and the gateway is connected. And that is all you can do until they verify your account.
But essentially what your next step is, is you’re going to go and you’re going to go to the “deposit/ receive” you click on it and this is where you’re going to want to click on “BTC” because most likely that’s probably what you’ve got. And then it says “use the following Bitcoin address to deposit funds” and you can see that they have a minimum deposit here I think which roughly comes out to 20XRPs or 20 Ripples. So, what you’ll do is you’ll cut and paste the number here, you’ll go to your Bitcoin wallet, this is a dummy account with no information in it. But essentially what I would do is I’d come over to my Bitcoin wallet, I’d obviously have money in here and if you didn’t see that video that’s video 2 “how to fund your Bitcoin wallet,” I click on send and I get a pop up that looks similar to this right here and it’s as simple as pasting in that long number that corresponds with my Bitcoin account over on Coinbase. Say how much money I want to send, optional message and remember there’s a minimum amount that you have to deposit in the Gatehub to have 20XRPs to be able to do anything with it.
Ok, so one more thing that happened with me when I first signed up was that even after I had established my Bitcoin gateway and sent money from my Coinbase account I did get an e-mail from Gatehub saying that I was missing a trust line. So, I actually had to click on the email and then it confirmed the trust line and then my transaction was taken care of a couple hours after that. So, not sure if that’s a normal thing or just something that happened to me but just wanted to make you aware of it.
Once your trust line and all that other nonsense takes place you will log in and you will probably see a Ripple and you’ll see Gatehub Fifth. Now it’s time to convert your BTC into XRPs and the way you want to do that is one of two ways.
The first way or the easy way is just to go to the exchange and what you’re going to want to is you’re going to want to come over here and you you’re going to want to do the drop down and obviously I don’t have any BTCs in my account right now but you’re going to select BTC and say ok I want to take my BTC and I want to convert it to over here you’re going to have XRP. Well I’m going to do it the opposite way just that you can see what it looks like. And if you go to “all available,” once you enter your password you’re going to have a little green button here and then you’ll be able to do an exchange.
Obviously, I’m not going to change my XRPs to BTCs right now because I’m going to pay an exchange fee for that and even though this right here says 0.00% when I exchanged my Bitcoins to my XRPs it was a 0.20% exchange fee. So, that’s why I said exchanging is one way to do it but you’re going to take a 20% hit right there by using the exchange.
Another way that you could do it, is you try to trade your BTCs for XRPs or your Bitcoins for Ripple. Ok, I’ve clicked over to the trade tab but I want to show you a trade between US dollars an XRP because it’s when you’re first looking at all this information it’s a little overwhelming, but I think that if I can show you a trade between the US dollars and XRPs it’ll help you to better understand what happens when I flip this to Bitcoins to a Bitcoin to X R P transaction.
So, essentially what we’re looking at here is the last 5 days and this right here as I’m mousing over you can see the price of Ripple as it compares to the US dollar which is something I think most of us can understand. And if you look at this number right here you can see the trend and that trend is about somewhere around January 5 it was trading at $2.77 and as of right now it’s trading at $1.90; ok? So, that is what this curve is showing us. So, it’s a little confusing when you go commodity to commodity but when you go dollars to commodity it’s a little bit easier to understand.
Ok, so, now I know that Ripple’s last trade was $1.90. But what if I don’t want to pay $1.90? What if I wanted to buy Ripple; right? And I wanted to buy oh I don’t know, I wanted to buy 50 of them but instead of $1.90 I don’t want to pay a dollar, I want to get a bargain. I’ll sit around and this is like playing the market. Instead of buying it at $1.90 or the last price which is a $1.94 I only want to pay $1.80 for it. Well we come down to this chart right here and you can see that a $1.80 I’m way down here on the green chart; ok? Now, as of right now, this second, Ripple is trading at the very lowest, very lowest at $1.90; at the very highest at $2.30; ok? So, if I’m willing to pay market price right now which is what the asking prices this is what the seller is asking. Now the difference between the bid price in the ask price, $1.90 is what the seller is asking for and $1.917 so almost 2 cents is what you’re going to pay for it and that differentiation is called the spread and spread goes to the market maker which in this particular case is Gatehub. Gatehub makes a fraction on every trade; ok? Any time you’re interested in buying something you’re going to pay the bid price, you’re going to pay the higher amount. Any time you’re ready to sell something you’re going to sell it for the ask price and that’s the price you pay to have all of these tools at your disposal.
So, the more unreasonable I want to be on my pricing say I wanted it for $1.50 well I’m not even on the chart now, I’m not going to get it for $1.50. The chances for getting it for $1.50 are slim to none. So, what if I wanted to get a for $1.85? Ok, so I could put that buy order in and it would execute when it executes and that’s essentially how this trade works.
Ok, so making a final comparison between doing a trade and using the exchange let’s see how we do. Well I want to buy 20XRP and I want to buy it using Bitcoin. And I want to pay the going rate which is this one right here. So, the going rate right now is what is 0.00014732, so I’m going to write that number down.
All right let’s go to the exchange and see how we would do on the exchange. All right XRP, I got to flip them and I want 20 of these. All right check it out it is currently at 0.00014732 but I’m going to pay a 20% fee on top of that.
Ok, so, using these 2 numbers right here as the bid and the ask you can see that the difference is roughly, what is that? Around 6%. So, I would rather pay a 6% fee then a 20% fee, so just a little benefit there of using the trade instead of using the exchange.
I hope you found that helpful. I love this stuff, I’m still learning. I’m very bullish on cryptocurrency because I believe so strongly in the Block Chain technology and we’ll just have to see what happens.
So, future videos to come please like, subscribe, comment. I’m going to do some mining videos starting with a mining set up video and who knows where we’ll go from there. I hope you enjoyed it, I hope you got something out of it and I will see you in the next video, see ya.