Cryptocurrency is incorporating itself in our lives at a fast pace. Many DeFi projects have been started recently to fill the gaps in blockchain system. Nevertheless, the crypto world has become more complex with variety of options. There are around 1600 crypto coins in the world right now. A while ago we wrote a blog on top 10 crypto coins in 2020. All of them are unique in one sense or the other. Nonetheless, Bitcoin is leader of all. It is the oldest and most popular cryptocurrency. Consequently, the liquidity for coin is very high. You will always find a buyer for bitcoin in crypto market.
Another crypto coin XRP is making news these days. XRP is the coin issued by company named Ripple. Here is this guide we will explain how Bitcoin and Ripple are different from each other.
Founded by a person or persons with the pseudo name Satoshi Nakamoto in 2008. Satoshi was also responsible for the development of the first-ever blockchain. Bitcoin is a peer-to-peer electronic cash transfer system. The supply of BTC (abbreviation for bitcoin) will cap at 21 million. It is the top most expensive crypto coin.
Founded by Jed McCaleb, an American programmer, in 2012. It is a currency exchange network that enables comodity, cash and asset transfer around the globe. In its operation, Ripple resembles SWIFT.
Ripple has its own virtual currency called XRP. XRP is at the fourth number in list of cryptocurrencies according to market value. The number of total pre-mined XRP coins is 100 billion.
Public Ledger Vs. Payment System:
Bitcoin is built on a public ledger, known as blockchain. Blockchain contains information about transactions. Whereas, bitcoin is a digital currency that allows users to pay for goods and services. Blockchain supports bitcoin the same way central banks support paper money. However, the essence of blockchain is decentralization. Essentially, this means that blockchain is not dependent on a central authority.
Verification of every transaction in blockchain system is necessary. Bitcoin miners with powerful supercomputers verify every transaction happening on the network. In return for this labor, miners get the BTC as a reward for a certain quantity of verifications.
Ripple is very different in its functioning. It is a payment transfer system. It settles payment, money exchanges, and remittances among individuals or groups. You can send out your money beyond international borders by leveraging the services of Ripple. Additionally, you can exchange money for XRP of equal value and use the later for payments.
Miners’ Verification Vs. Consensus Mechanism
As mentioned earlier, Bitcoin uses a verification system to make sure that a transaction of a certain value has happened among particular users. The blocks in blockchain contain information about those transactions. Every user or developer (represented by a node in the network) can view the info.
Ripple uses a different sort of transaction validation system known as consensus mechanism. It is a distinctive network of servers. Every server or node is involved in the validation of the transaction. For instance, when a transaction happens the system conducts a poll. The servers make sure the authenticity of it. Resultantly, a broad consensus confirms and validates the transaction without the intrusion of central authority.
Bitcoin’ mining system uses a lot of power to run high functioning computers doing the mining. Ripple on the other hand requires a little amount of power. Furthermore, Ripple is more speedy and reliable than bitcoin. This gives XRP an edge over other cryptocurrencies.
Bitcoin employs two technologies, proof-of-work system and mining, for the release of new tokens. Earlier we explained the mining process (verification system using powerful computers). The proof of work is a bit different. It involves efforts to stop corrupt attacks from computers such as sending out of spam emails or denial of services. Subsequently, blockchain ledger remains distributed or public.
Ripple’s crypto coin XRP is pre-mined. News XRP is released using a technology called smart contract. Smart contracts execute themselves automatically after developers write terms of agreements in code. The transaction carried out under the code are irreversible. Besides, users can track them along the way.
Ripple releases a maximum of 1 billion coins every month. Around 50 billion are circulating at this stage. The surplus XRP goes back to the escrow account. For every transaction of value using Ripple platform, a fee is charged in XRP.
Uses of Bitcoin Vs. Ripple:
In the world, people utilize bitcoin in place of paper money. Whereas Ripple is popular for assets, money, or commodities transfer. The later has applications in the banking system.
Bitcoin is a public network and not owned by a single company. However, Ripple is a private company. One can exchange USD for XRP on the Ripple network without involving intermediaries. Notwithstanding, BTC can be exchanged for USD on third-party platforms.
Ripple’s edge over BTC:
- XRP has a low transaction fee of $0.004. The BTC transaction fee is $40.
- The transaction at the Ripple network takes 3-5 seconds to complete. BTC takes approximately 1 hour to verify transactions.
- Ripple executes 1500 transactions per second. BTC has around 10 number of transactions per second.
- The energy requirement for Ripple to operate is very less. On the other hand, BTC requires approximately 250 kWh of energy per transaction.
- Lastly, Ripple will have a coin supply of 100 billion. Conversely, the BTC supply of coins is limited to 21 million.
The need for XRP is evident through the above-mentioned qualities of the network. Bitcoin and Ripple both are part of cryptocurrency world. However, both cater to the distinctive needs of users. Ripple has more appealing due to its efficient transaction system whereas BTC is popular for liquidity. Henceforth, if you are interested in using crypto then choose the currency which best suits your needs.