Ripple is a blockchain-based digital money transfer network that essentially caters to the requirements of the financial services industry. It has its cryptocurrency, XRP. In terms of total market capitalization, this digital currency has always been a strong performer and currently ranks sixth among all cryptocurrencies.
The Ripple network can be defined as a network system that facilitates global payments for major financial institutions and services. It enables exchanges for not just cryptocurrencies but also several fiat currencies.
Comparing Bitcoin And Ripple: What’s The Difference?
Cryptocurrencies can be difficult to understand because there are so many different types, and their features can be quite complicated. However, the basic principles of Bitcoin and Ripple are easy to grasp when you know where to start. This section of the article will help you understand the basics of each currency, so you can choose the one that’s right for you.
- Transaction fees and speed
The mining process for Bitcoin is complex. This leads to a longer time for the verification of a Bitcoin transaction that may take several minutes and also its fee is comparatively higher. The transactions that involve the XRP on the Ripple network are faster. They take a few seconds for transactions to be validated. Also, the standard transaction fee has been fixed at a minimal fee of 0.00001 XRP.
- Verification process
Bitcoin employs the blockchain mining concept for the verification of transactions. The Bitcoin blockchain is open to anyone to be able to mine new Bitcoin and verify transactions.
On the contrary, the XRP ledger enables only a select few participants on the network to verify the transaction process and secure the network. To verify transactions, XRP uses a consensus system that includes several bank-owned servers. These transactions are compared to the latest version of the XRP ledger and are verified only if accepted by a majority of the validators.
- Circulation of coins
In the case of Bitcoin, on the verification of a transaction, it is stored in a block. For the new block to be formed, miners solve a complex mathematical puzzle generated by the Bitcoin algorithm.
So, for a new coin to come into circulation depends on the network speed with which transactions are processed and the difficulty level of the puzzle. Unlike Bitcoin, the introduction of XRP is controlled by a smart contract. This in-built smart contract governs the release of a maximum of 1 billion XRP tokens per month. It also has a provision for shifting the unused tokens to an escrow account. This ensures that there is no oversupply of XRP tokens that may lead to its misuse.
- Total number of coins
The maximum number of Bitcoins that will be in circulation has been limited to 21 million. This limit of the number of Bitcoin has worked in its favor as it is seen as an asset that has a store of value among investors. Before the introduction of XRP, 1 billion tokens had already been mined that are being gradually released into the crypto market by its investors.
Bitcoin is used both as a currency and a commodity. It can be used to buy products and services and at the same time can be sold and bought as a commodity. Traders buy and sell them intending to garner maximum profits. Bitcoin has attracted an increasing number of people willing to trade in it in the last few years.
However, Bitcoin trading is not easy and for this reason, many trustworthy trading apps such as bitqs.online have emerged that help potential traders make profitable ventures.
Ripple is a network that focuses on the transaction requirements of financial institutions that have helped it to create a niche in this specific market segment.
Litecoin has many similarities with Bitcoin as admitted by its creator Charlie Lee, who introduced Litecoin as the “lite version of Bitcoin” but there are several differences between the two. The one common feature between the two cryptocurrencies is that they employ the proof-of-work consensus mechanism.
Each crypto coin has its distinguishing features setting it apart from the others. You can study its pros and cons and based on it, incorporate that coin into your portfolio to widen your financial options.