Advanced (order book) trading for XRP using Bitstamp and the Ripple Client

[hennessyhemp]

I found this tricky enough I thought I'd attempt a quick tutorial to share what I learned about buying XRP with the Ripple client.

I originally funded my Bitstamp account with BTC, traded it to USD, then converted it to XRP on Bitstamp at market price because I
didn't realize you could take the advanced route and get to an actual orderbook, just like BTC-E or any other exchange has.  

These are the steps to getting to the more advanced order book.  If you are familiar with linux, this reminded me of adding a trusted
source in many ways...except you limit how much trust you give.

Step 1.  Load Bitstamp with BTC...would probably also be possible with USD, but for this example, I'm trading BTC for XRP.

Step 2.  If you don't have one already, sign up for a wallet at Ripple.com.  Once you have an account head back to Bitstamp, but keep Ripple up in another tab.

Step 3.  Hit the Withdrawal button on your account balance page in Bitstamp.  On the left, you will see various options, ripple being one of them, click on it.

Step 4.  When you're at the Ripple Payment screen, it says you have X amount of dollars and x amount of BTC the destination must trust this address...
with "Trust This Address" being a link, click on that link and copy the ripple address it lists.

Step 5.  Head back to your Ripple wallet, click advanced, and under Trust, click the "+" button.  Add the ripple address you just copied as the Name, and how much BTC or USD you want to send to the order book as your Amount, then Grant Trust.

Step 6.  Head to the Trade screen and click on Order Book.  If one appears, you've done everything correctly.  On the top of the screen click receive and copy your Ripple wallet address.

Step 7.  Go back to the Bitstamp screen and use this address to wire the btc to.  You will then need to confirm it through email.

Step 8.  Watch as funds arrive at your Ripple wallet almost instantly in the form of BTC, you can now trade directly on your orderbook, cheers.

EDIT:
So one of the people who followed these directions informed me that Ripple won't let him trust a gateway until he has XRP.  

I believe this can be solved by converting a small amount of BTC...say BTC0.01 into $USD on Bitstamp, then buying XRP (ripple), then send it to your new Ripple wallet address listed under the Receive tab in Ripple.  That should successfully fund you with enough XRP to go back in and Trust Bitstamp as a gateway...when he finishes doing this, I've asked him to report back so I could update this post.

If you happen to do it before he does, please post your results on this thread so we can make this easier.

UPDATE:  10/14/2013...

Bitstamp now also requires verification, which makes this whole process slightly more annoying, but once verified, you're good to go.  We have confirmed that the method I have laid out regarding buying a small amount with the Bitstamp client and sending it to your ripple wallet address will give you enough XRP to effectively Trust Bitstamp as a gateway.

So there you have it, the not so easy, but highly worthwhile method of trading XRP using an orderbook like BTC-e or Kraken (which now trades XRP directly...which was not available when I first wrote this!).


If you found this helpful I always appreciate tips:

XRP: rJY6zKMNxrwnJhA3fPNSHGigstrhwskt9B
BTC: 1KZeE1GU3ZBemiZAFBz81emgkeyusc3h8Z
LTC: LTiXWmtekhkfCRUCt4PHbJxSk3dvAZhYR4
NMC: NGRbfp7w2zKXb44tXWr6DWUaP3UkyBvk9p
XPM: APgwKFVzKBQzSSvCtDDy2jw9XbXJPBh8RT
DGC: DSN9nqRLSHJckEyL4QByxMuoamGhovxkiJ

[matt608]

Thanks for the tutorial.  I already bought some  ripples at the Bitstamp price and sent them to my ripple wallet.  I want to try buying some more by sending BTC from my bitcoin wallet to my ripple wallet and buying them there in the ripple wallet.  If I fund my ripple wallet with BTC from my bitcoin wallet will it appear really fast or does that only happen from bitstamp?

[spoid]

sounds like my grandma won't be using ripple anytime soon

[hennessyhemp]

Thanks for the tutorial.  I already bought some  ripples at the Bitstamp price and sent them to my ripple wallet.  I want to try buying some more by sending BTC from my bitcoin wallet to my ripple wallet and buying them there in the ripple wallet.  If I fund my ripple wallet with BTC from my bitcoin wallet will it appear really fast or does that only happen from bitstamp?

Almost instantaneous  

Probably my favorite part of using Ripple.

sounds like my grandma won't be using ripple anytime soon

Nope...I didn't say it was easy...this is the advanced method...the BTC>USD>XRP method is "easy" but you are subject to Bitstamp's market rate, which according to some reports can be up to 30% higher than current rates on the Ripple client itself.

BTW, once you have it listed as a trusted source, you can skip most of the steps and simply withdrawal to ripple...as long as you have it "trusted" for at least as much as you plan to send.

[matt608]

Almost instantaneous  

How do I send BTC to my ripple wallet?  Cant seem to figure it out... :s

[hennessyhemp]

How do I send BTC to my ripple wallet?  Cant seem to figure it out... :s

Via Bitstamp as the gateway...see step one.

The orderbook here is in fact the Bitstamp orderbook.  The "trusted source" is adding access to it through the ripple client, that is why I said if the order book appears, you did it correctly.

[matt608]

How do I send BTC to my ripple wallet?  Cant seem to figure it out... :s

Via Bitstamp as the gateway...see step one.

Ah ok... so I have to wait for the BTC to arrive at Bitsamp, it can't be moved instantly from my bitcoin wallet to the ripple wallet.  Will do that!

[hennessyhemp]

nope, but it will move freely from bitstamp to ripple...haven't yet tried the reverse order.

[tclo]

nope, but it will move freely from bitstamp to ripple...haven't yet tried the reverse order.

Yes it is pretty fast going back and forth.  There is occasionally a glitch but not lately.

[bibbit]

nope, but it will move freely from bitstamp to ripple...haven't yet tried the reverse order.

The bitcoin bridge is pretty sweet. On the ripple client Send screen, enter a bitcoin address. Instead of sending within ripple, it will shoot that amount of bitcoins out of ripple and to the bitcoin address. The ripple side is nearly instantaneous while the bitcoin side has to wait on the transaction to be verified on the blockchain.

Note: The bitcoin bridge is currently only hosted by Bitstamp (there can be other bridges in the future), so the best conversion rate will come if you hold BTC.bitstamp in your ripple account. You can send other currencies and the system will automatically do the conversions, but your best exchange rate will come if you send BTC.bitstamp, since there will be no exchange, just a straight redemption.

[hennessyhemp]

Update...so far I've had a report that this process didn't work for someone because they needed to have XRP in their account to grant trust to the Bitstamp gateway.

My proposed solution was to send some btc to his bitstamp account, trade a small amount into usd (ie BTC0.01) directly on Bitstamp, then use the USD to XRP market price on Bitstamp to purchase some XRP straight into the receive address in his Ripple wallet (all of which happens on Bitstamp).

He sent this in reply:

"So I followed all the steps and think its correct but missed another step being that of how to set the base currency issuer? Just used my recieve address for that as well under the start of the trade tab so I could even get the order book to come up. Well something is wrong cause sending btc from stamp is failing."

I don't know where his issue lies...if anyone can help, please post so I can update this thread.  Does anyone know what the minimum XRP amount is to allow trust to be given?  Is BTC0.01 too low...I figured that would yield around 100 XRP, and figured that would be enough to let him access the advanced order book, but I was just guessing...should it be more?  Like BTC0.05?

I will probably be doing this again soon and update my post with screenshots to make it more clear, though if you literally follow the directions in order, it should work.

[2Kool4Skewl]

"So I followed all the steps and think its correct but missed another step being that of how to set the base currency issuer? Just used my recieve address for that as well under the start of the trade tab so I could even get the order book to come up. Well something is wrong cause sending btc from stamp is failing."

I don't know where his issue lies...if anyone can help, please post so I can update this thread.  Does anyone know what the minimum XRP amount is to allow trust to be given?  Is BTC0.01 too low...I figured that would yield around 100 XRP, and figured that would be enough to let him access the advanced order book, but I was just guessing...should it be more?  Like BTC0.05?

Regardless of the XRP in the account, as long as you are purchasing XRP with something, BTC, USD, EUR, etc the trade should complete within the ripple client.

Here is what to do.

1 - Trust Bitstamp for whatever you are transferring into your Ripple wallet (BTC, USD, EUR).  This is the Bitstamp address -> rvYAfWj5gh67oV6fW32ZzP3Aw4Eubs59B

2 - Go to the Trade tab and type in the currency code for what you just transferred in from Bitstamp along with '/XRP'.  (BTC/XRP, USD/XRP, EUR/XRP)

3 - Set your base issuer to Bitstamp.  Click on "change issuer" and use Bitstamp's address again -> rvYAfWj5gh67oV6fW32ZzP3Aw4Eubs59B

[id10tothe9]

how do I then trade with XRP after I have XRP or BTC on my Ripple account?
and what is the issuer? I have a fresh new ripple.com account, so when I go to trade it's empty and says I must select an issuer to trade currencies. (newbie here so any explanation appreciated )

[mymenace]

sounds like a nightmare

[hennessyhemp]

sounds like a nightmare

It's a little complicated right now, but complication brings dedicated users to the table, dedicated users bring simplification, and the cycle repeats in this fashion until it becomes accessible to everyone.

This is an advanced guide meant for users who are familiar with Order-book style trading.  Once you get there and get setup...you definitely need to know what you're doing, as buy and sell orders can be tricky sometimes, and entering them manually does not have safeguards...this is why you see some outrageous offers on the bid and ask side...every now and again someone presses the wrong key or makes a typo that leaves the recipient much better off than they should be, and there's not a damn thing you can do about it. (someone bought Feathercoin at 1BTC:1 FTC the first day it started trading on BTC-e).

[bitcoinBull]

how do I then trade with XRP after I have XRP or BTC on my Ripple account?
and what is the issuer? I have a fresh new ripple.com account, so when I go to trade it's empty and says I must select an issuer to trade currencies. (newbie here so any explanation appreciated )

An issuer is a gateway. When you click "change issuer" in Advanced -> Trade, and put in a gateway's issuer address, you are asking to view the order books for for that gateway's IOUs. Say you set a trustline to Bitstamp for BTC, withdrew BTC from bitstamp to ripple, then now you have a balance of "BTC.Bitstamp" (bitstamp BTC IOUs) on ripple. To trade those for XRP, you go to Advanced -> Trade, select BTC/XRP, and put in Bitstamp's issuer address (its the rvYAfW... one). And an order book pops up.

The reason there are so many steps, I suspect, is that Ripple wants the early adopters to understand what it's about and how the system works. That's a good thing. We get to see behind the curtain, before it goes mainstream with all the magic hidden from the average user.

[hennessyhemp]

That's a good thing. We get to see behind the curtain, before it goes mainstream with all the magic hidden from the average user.

My sentiments exactly.  Bitcointalk is a fantastic place for being there first with regard to Crypto...like XRP giveaways...already made money I didn't have previously, just because I said, sure, I'll take some for free.   

[Racer8]

Nope...I didn't say it was easy...this is the advanced method...the BTC>USD>XRP method is "easy" but you are subject to Bitstamp's market rate, which according to some reports can be up to 30% higher than current rates on the Ripple client itself.

Can confirm bitstamp's rate is much higher - avoid!

[hennessyhemp]

Update...process is still mostly the same, but they have now added a Trade tab rather than having to click on Advanced.

To briefly summarize the process again:

A. Buy Bitcoin
B. Send to a Verified Bitstamp Account
C. Grant Trust to Bitstamp through a Ripple Wallet and withdraw bitcoin straight into your Ripple account.*

You may be able to secure your first XRP's (75 is all you need to grant the proper trust line) that you will need via Peercover and a credit card.

Peercover is actually looking like an interesting inlet to XRP, and by extension Bitcoin.

[jmerme01]

sounds like my grandma won't be using ripple anytime soon

Haha- this response is spot on