Ripple vs Bitcoin?
What is the similarities and differences between Ripple and Bitcoin?
The world of cryptocurrency is a very vast one, with over 1600 cryptocurrencies available, the competition has been stiff. Although not every one of these coins has been able to keep up with the race; some are getting stronger by the day.
Digital money, which is also referred to as the future currency, is gaining grounds. It may be futuristic, but in this modern world, many investors all around the globe have subscribed to it so that when it goes as viral as expected and becomes the acceptable form of exchange widely accepted globally, those early investors would be first beneficiaries.
Although Bitcoins is the first cryptocurrency, launched in 2009 and it is still the most popular of them all, but since then, many others have been coming up trying to build upon what Bitcoin has been able to do. Basically, they have all been looking for ways to be above bitcoin in the global digital market.
Ripple, like all other altcoins, is rising strongly and from statistics, it is clear that it is rising steadily and experiencing impressive growth. In the year 2019, at this writing, Ripple is third in the global market ranking. Though Bitcoin still maintains the top spot, Ripple has fared well so far, increasing the hopes of investors.
Having said all these, what are the similarities and the differences between Ripple and Bitcoin?
What is Bitcoin?
Bitcoin is a cryptocurrency whose original owner is Satoshi Nakamoto, it started in January 2009. It is a peer-peer Electronic Cash System, it is a decentralized digital currency that operates without a central bank or a singular administrator. It involves no third party and it can be sent from user to user directly since there is no need for any intermediary.
The transactions carried out are verified by network nodes using cryptography and they are recorded in a public ledger called a blockchain. How Bitcoins are created is by serving as a reward after a process called mining is undertaken. It can be used in the exchange of products, goods, services and even other currencies.
Bitcoin makes the transfer of huge funds possible and encourages international trade, though this has been misused a lot for illegal businesses to thrive since there are no central banks to regulate and supervise it and since the users are anonymous to some extent and cannot be traced as individuals are warned not to expose their details for security reasons, still investors are high on this because it has its many uses like it is the most popular of all the cryptocurrency and have been accepted to some extent, it has more credibility for business. Though it has its shortcomings, like how much energy miners consume, it is also prone to hacking and scamming because it is done online. This has raised some security issues over the years and so as much as investors are plunging in, there are those concerns aside from the fact that its prices usually fluctuate thus reducing the value of the money invested but still, it is leading.
What is Ripple?
Ripple is a cryptocurrency. It is a real-time gross settlement system and a remittance network which was created by Ripple Labs Inc. a US-based Technology Company. Ripple was released by its original authors Arthur Britto, David Schwartz, Ryan Fugger in the year 2012 and it is constructed on a distributed open-source protocol which supports tokens representing fiat currency, cryptocurrency and commodities. Ripple is widely used by banks and its transactions are confirmed in seconds. It proposes to enable a more secure, fast and almost free global financial transactions of any size with no chargebacks as it is not also controlled by the central banks.
The ledger employs a decentralized native cryptocurrency called XRP, Ripple has been widely used by banks especially in the Asian countries and other payment networks as settlement infrastructure technology.
It relies on a shared ledger in which information is stored, containing all Ripple accounts. The network is then managed by a network of independent validating servers and their duty is to compare accounts. These servers could belong to anyone including banks or marketers.
Ripple validates the transactions and payments are delivered within seconds. Payments on Ripple are irreversible.
Bitcoin versus Ripple
One major similarity is that they are both cryptocurrencies. Pineapple and Apple are both fruits but they do not look nor taste the same way. Other than the fact that they are fruits, they are totally different. The same analogy goes for these two cryptocurrencies, Bitcoin and Ripple. They have more differences than similarities so we would check them out contrasting them with each other, knowing their strengths and weaknesses. This cannot cover the entire basis so ensure you consult experts before drawing your conclusions and making your investments.
Similarities and differences
Time of development:
Bitcoin is the first, the original cryptocurrency ever, it is the father of them all. It was introduced in the year 2009 as a direct effect of the financial crises that happened in 2008. Though it came first, it is still young, it is just ten years old. Many new laws are being enacted as it develops such that you cannot rely on any rule as it can be changed at any time. So what worked yesterday might not be obtainable anymore that is why those trading with Bitcoin must be able to be up to date keeping in touch with the trend so they do not run at loss.
Ripple was created in the year 2012, three years down the line since Bitcoin came, though it used to be ranked as the second, now it is ranking third among the cryptocurrencies, though its system of operations are way different from then Bitcoin, many still prefer Bitcoin as it can be used as a fiat currency while Ripple cannot
Aims of development:
Bitcoin was introduced to serve as a system of exchange, it is like mobile or digital money that can be used in place of cash or money in the bank. It is used in the exchange of goods and services and some online stores accept Bitcoins as a means of payment even though it may not be accepted in a normal brick and stone store. That is, by the way, the major reason why Bitcoin bypasses the central bank system or any third party interference in the transference of funds, such as the government so that money can be available to individuals at their disposal.
While Ripple was made for a separate purpose, it serves the banking and financial institution and enables them to transfer huge sums from country to country and facilitate payments across fiat or government-issued currency. It makes banking transactions across different kinds of currencies less expensive.
Time of confirming transactions:
Bitcoin can be time-wasting, some transactions may not be quickly verified especially if the fee is low, many miners would want to work on anyone that attracts high fees as its an addition to them, so there is the delay, Ripple then created a system that works faster. Because its transactions are pre-mined, unlike Bitcoins that need miners, the transactions are verified within seconds, it may take a longer process especially in transferring large sums but it takes just a few seconds to verify its delivery.
Cost of transaction:
For Bitcoins, it attracts high transaction cost, miners do not want to focus on transactions with low fees as mining can be both time and energy-consuming. Though Ripple still charges little XRP for transactions. This is validated because of their different system of operations. Ripple seeks to facilitate easy and fast transfer between banks and countries while Bitcoins deals with individuals to a large extent.
Energy consumption:
In Bitcoin Due to the mining activities taking longer time, with so many miners, the hours spent on the internet vis-à-vis the energy consumed to stay online and keep the system on is so much in comparison to that which Ripple consumes as its transactions are done faster and so it consumes lesser energy.
Method of operations:
Bitcoin is to a large extent a public system as it is not owned by a single individual, though it operates on a peer-peer system allowing anyone to mine it as long as they have the means and the desire to do so. It is a decentralized system using a blockchain technology which can be complicated but it allows for a greater level of accountability and credibility still without any central control.
While Ripple is majorly known for its digital payment network and protocol using its cryptocurrency the XRP for payment settlements, remittance system and asset exchange. It uses a network of servers that validates the transactions, these servers are what validates or ensures the security of each transaction and because it has no mining system like Bitcoins, the validation is done swifter.
In conclusion, based on the information given above, you can now make a more informed decision on the digital coin you would prefer.