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1. Choose a crypto exchange or broker
Both a crypto exchange and a crypto broker can help you buy XRP, but the two are slightly different.
An exchange is a platform on which buyers and sellers can trade cryptocurrencies. A broker is an interface that interacts with exchanges on your behalf.
Some exchanges only deal in crypto, so if you’re new to investing and need to buy crypto using fiat currency (AUD in Australia), make sure you choose an exchange that accepts it.
If you choose a broker instead, be aware of its rules around moving your assets off a brokerage platform. Some brokers don’t allow you to move your holdings out of your account, which is typically a red flag in the eyes of most crypto investors. Moving crypto assets into a private wallet, especially a hardware wallet, enables investors to adopt security best practices and the self-custody ethos strongly advocated among experienced hands.
2. Choose a payment method
Most exchanges let you add funds to your account from your credit or debit card, bank account, crypto wallet or other payment service. Transaction fees may apply, and your payment method may affect the amount you’ll pay.
When you use a credit card, the card issuer treats it as a cash advance, which is subject to a higher rate of interest than a normal purchase.
3. Buy your XRP
Within your chosen exchange, head to the XRP market and enter the amount you would like to purchase. Most exchanges allow you to use either a market order or a limit order.
A market order will execute immediately, buying your XRP at the market rate when you press buy. A limit order works slightly differently, allowing you to choose the price at which you want to buy. You could set the price lower than the market price and hope XRP dips down to fill your order.
It is important to note that if the price you set the limit order at doesn’t get hit, your order could sit dormant until it expires. In this case, you will not buy any XRP and will keep your initial capital.
4. Select secure storage
Unlike a bank account holding fiat currency, cryptocurrencies like XRP aren’t protected by the Financial Claims Scheme (FCS). This means you would not be immediately entitled to reimbursement if your XRP were stolen, you lost your access codes, or the exchange or broker went bust.
A broker may not give you a choice about where your XRP is stored, but while an exchange may provide an integrated crypto wallet, you’re free to store it in wallets elsewhere—whether ‘hot’ or ‘cold’.
Hot wallets are stored online, making them more convenient but also more exposed to hackers.
Cold wallets are external storage devices such as hard drives or solid-state drives. They’re arguably more secure, but if you were to lose your own access codes, you may never be able to access your assets.
Whichever you choose, you may be charged a fee for exporting your XRP to an external wallet.
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