How Is Ripple Different From Bitcoin?
No doubt, Bitcoin is still one of the leading digital currencies based on blockchain technology. Koinal is a reliable digital currency exchange platform where you can instantly buy or sell digital currencies.
If you are new in the cryptocurrency world and are confused about which cryptocurrency you should invest in, either Bitcoin or Ripple? Initially, you must know the differences between these cryptocurrencies. This guide will help you find how Ripple is different from Bitcoin.
But before going into details about what makes Ripple different from Bitcoin, you must know what exactly is Ripple and Bitcoin.
What is Ripple?
Previously known as OpenCoin, Ripple is a technology that not only serves as a cryptocurrency but also as a digital payment network.
Ripple was first created in 2012 that has a quite different purpose from Bitcoin. Ripple is well-known for its seamless payment protocol that ensures smooth cryptocurrency and money exchange.
In other words, Ripple is a currency exchange and remittance system that was intended for financial institutions to assist them in payment, settling across fiat currencies.
What is Bitcoin (BTC)?
Bitcoin is the most popular cryptocurrency that decentralized digital currency without a central bank or single administrator which can be sent from user to user on the peer-to-peer bitcoin network without the need for intermediaries.
It was announced in 2009 in response to the global recession of 2008. BTC is one of the secure and reliable means of payment for goods and services.
Bitcoin was first introduced by an anonymous group named Satoshi Nakamoto in 2008. Basically, Bitcoin is a decentralized, peer-to-peer digital currency that eliminates the need for intermediaries such as financial institutions and governments.
How Is Ripple Different From Bitcoin
One of the key differences between Ripple and Bitcoin is based on its utilization. Bitcoin is used as an alternative to fiat currency. With the help of Bitcoin, you can purchase goods and services as you do with fiat money.
However, Ripple is used for the transfer of other commodities and currencies over the currency exchange network. Of note, no third party or intermediaries are involved in the Ripple network.
Unlike Bitcoin that operates on blockchain technology and employs mining, more precisely, a proof-of-work system, Ripple uses an iterative consensus protocol to avoid double-spending issues.
Also, Ripple uses a validating server network along with XRP tokens. XRP design does not entertain any mining, and therefore, Ripple is different from Bitcoin. Moreover, a wide range of independent servers manages the ripple network which is constantly comparing transaction records.
● XRP Tokens
XRP tokens are the actual cryptocurrency that is used on the Ripple network that assists money transfer between various countries. However, Bitcoin is itself a digital currency.
XRP tokens represent a transfer of values across the network that is different from Bitcoin, where coins are created as rewards for users who offer the computing power to maintain the blockchain network.
● Transaction Validation
Unlike Bitcoin that uses blockchain mining, the Ripple network utilizes a distributed consensus mechanism through a network of validating servers to validate the XRP transactions.
With the help of this, instant confirmations are enabled without any central authority. This makes XRP reliable and faster than Bitcoin.
● Transaction Costs and Time
Bitcoin transaction takes a longer time, 10 minutes on average; however, XRP transactions can be settled in only 5 seconds, considerably faster than Bitcoin.
Furthermore, Bitcoin’s transaction cost is almost $40, whereas XRP has significantly lower transaction costs than $0.004.
● Market Capitalisation
What’s more, the market capitalization of Ripple stands at $35.42bn that has placed XRP third in the list of top-ranking cryptocurrencies.
However, Bitcoin still ranks at the top with a market cap of almost $192.96bn. This market cap of Bitcoin accounts for 41.8% of the total market capitalization of 1535 existing cryptocurrencies.
Now you know how ripple is different from Bitcoin. But remember, Ripple and Bitcoin both are based on different philosophies and principles. Both cryptocurrencies were created for different purposes. Therefore, both Ripple and Bitcoin have their own pros and cons.
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