Bitcoin vs Ripple: which cryptocurrency is the most suitable as a payment currency?.
Contents
Bitcoin over Ripple or vice versa? If you check most of the reviews, you will usually find that Bitcoin is good for retail purchases, while Ripple stands out for its fast transfers. Despite everything, both Bitcoin and Ripple require a deeper explanation to understand which is most suitable for use as money. So let’s check.
What do they have in common?
Bitcoin and Ripple are digital items and are backed by blockchain technology. They support people around the world to use this blockchain to transfer funds. Projects have their own currency that can be purchased online as an independent exchange. Analyze several exchanges to find the best XRP to BTC rate in the market.
Bitcoin – what about it?
BTC is a pioneer in the realm of cryptocurrencies. His father is unknown programmer Satoshi Nakamoto. He intended to create a novel international payment system that ensures the flow of digital money on a person-to-person basis. In other words, it aims to remove any middlemen from the transaction. Therefore, it is also called “decentralized” because it is not overseen by any institution. The transactions are hereby approved by the involved BTC network – miners. Joining the miners is very easy – just connect your device to your computer. As a reward for their time and energy expenditure, efficient miners receive extra BTC. Currently, the maximum BTC supply is 21 million tokens. For now, there are 17.1 million of them in circulation and this number is constantly growing. However, it will never exceed 21 million.
Ripple – is it the new Bitcoin?
The story behind Ripple is completely different. In 2012, the payment system was created by the American company Ripple Labs to help banks send virtual money both domestically and around the world. It came with a native token – XRP, which anyone can buy and sell. Blockchain works on the same principle. Thus, the total coin supply is projected to be 100 billion, while there are currently 60 billion coins in the market.
Technical matters
Bitcoin
It takes 10 minutes for the transaction to be confirmed by the blockchain. Regardless of the sender’s and receiver’s location. It is currently able to execute 7 transactions per second. This is a serious scalability problem that the network must solve to stay ahead of the competition. In the beginning, the fees were small. As Bitcoin became popular, it expanded significantly. To illustrate, at the end of 2017, the hectic time of the day, transaction costs were as high as $40.
Ripple
Talking about transaction confirmation speed, it only takes a few seconds. There are virtually no fees as the usual cost to send an asset is 0.00001 XRP. Ripple can carry 1,500 transactions per second. The overall picture looks great for the interbank industry. Moreover, if there is a liquidity problem, XRP can serve as a bridge, saving banks time and money.
Consensus mechanism
Bitcoin works on a proof-of-work mechanism that requires gigantic amounts of electricity. It allows the use of really expensive hardware, which eliminates the chances of a Bitcoin reward for those who don’t have it. The model also contributes to high fees, poor performance, and scalability issues.
The Ripple blockchain operates under the Byzantine Federal Agreement. It consumes less energy than its counterpart. This fact increases its productivity and guarantees low fees.
Bitcoin or Ripple: Which to Use?
The Ripple blockchain is more efficient than Bitcoin’s. Much faster and scalable operations, low costs make it more attractive. Besides, Ripple’s consensus engine is environmentally friendly due to its lower power consumption. And Bitcoin? It continues to be the leading cryptocurrency in terms of market share and current usage. on top of that, another solid update is coming – the Lighting network – promising to take the coin to a new level.
