Note: BitIRA does not currently offer Ripple IRAs, though it may in the future. Currently, other crypto IRA types are available.
Ripple IRAs, An Alternative Retirement Investment
When most investors hear “cryptocurrencies,” they think “Bitcoin.” But, there are other digital currencies, each with its own token, exchange method and support technology.
Ripple IRAs are self-directed individual retirement accounts that use the Ripple digital currency. With this account, you can purchase an asset other than the stocks, bonds and mutual funds, which are the options normally offered in a conventional IRA.
Ripple, Ripples and XRP
Ripple is the umbrella term that people (sometimes incorrectly) use to describe a payment method, a technology and a digital currency. Let’s clear the confusion with a few definitions:
- Ripple is a payment network that uses a digital currency to send money around the world. The network is designed to speed up money transfer and cut the costs of financial transactions. This totally electronic transfer uses a public database that enables users to make payments and exchanges with a specified process.
- Ripple is also a company, which builds and promotes products based on the Ripples technology.
- Ripples technology enables transactions on the Ripple network. The technology includes distributed open source software, a ledger and a cryptocurrency.
- XRP is a cryptocurrency. Also known as the Ripple coin or token, XRP is used for payment, remittance and currency exchange in the Ripple network.
Different than Bitcoin
There are many differences between Bitcoin and XRP. But, if you are comparing XRP and Bitcoin investments, you need to know that:
- They have different users and uses.
Bitcoin is used by individuals and organizations as virtual currency. Ripple is used to transfer and exchange currencies by banks and other financial institutions.
- They use different methods to complete and validate transactions.
Ripple completes these tasks more quickly than Bitcoin—to the tune of four seconds versus five minutes.
- They have different ways of exchanging currency.
Unlike Bitcoin, the Ripple currency exchange network completes exchanges without a third party. Fewer parties translate into simpler, faster, and cheaper transactions.
- Ripples software supports automated scripts.
Ripples software can set up complex transaction scenarios and process them automatically. This approach eliminates delays of running the transfers manually. The result: faster, lower cost-transactions for Ripple customers.
All of these positive innovations may induce investors to buy and hold XRP as a long-term asset in their IRA accounts. Though Ripple IRAs are currently not available at BitIRA, they may be offered in the future.
Don’t wait for the future – create your digital IRA today
While we don’t currently support Ripple purchases in your digital IRA, we may in the future. Although BitIRA doesn’t yet offer Ripple IRAs, subscribing to our newsletter will inform you if the option becomes available.
In the meantime, have a look at how you can expand and diversify your retirement portfolio with a new and exciting asset class through one of our other tokens, including Bitcoin, Ethereum and Litecoin. You can find more information about setting up a secure cryptocurrency-based IRA here. If you have questions about investing in cryptocurrencies for your retirement or qualifying for IRA-based tax deferrals, contact us today at (800) 299-1567 to get started.