Ripple vs Bitcoin – Cryptocurrencies Compared
Regarding the Ripple vs. Bitcoin dilemma, one thing everyone can agree on is that both projects have performed exceptionally well so far.
However, as the original cryptocurrency, Bitcoin has always been the number one coin regarding the value, market cap, adoption, and real-world use.
At this point, there are nearly 10,000 altcoins on the cryptocurrency market to choose from if you decide to diversify your portfolio. One of them is the XRP coin.
So, let’s see what sets apart the XRP from BTC regarding supply, BTC and ripple price performance, and scalability aspects of their networks.
Ripple vs Bitcoin – XRP as a Bridge Currency
Suppose you are familiar with the main features of Bitcoin and history before we tackle Bitcoin vs. Bitcoin comparison. First, let’s see some main features of Ripple XRP.
XRP is the digital currency created on the Ripple payment platform. On this platform, any currency can be exchanged for another, whether it’s digital or not.
It is, therefore, possible to use XRP as a gateway to paying in Bitcoin without having to own Bitcoin, with another cryptocurrency such as Ethereum or with euros.
This specificity makes XRP a fast and straightforward means of payment. Thanks to its advantages, the Ripple platform has forged partnerships with several banks, including Bank of America, Banco Santander, or PNC Financial Services.
Unlike Bitcoin, XRP cannot be mined, and the maximum number of coins is set at 100 billion. There are approx 45 billion XRP in circulation.
The highest ripple price so far is $ 3.40 per token.
Ripple vs Bitcoin Scalability
According to the basic definition, scalability stands for the capacity of the network to process a growing number of transactions. So, let’s have a glance at the Ripple vs. Bitcoin scalability aspect, focusing on their transaction speed.
Bitcoin Transaction Speed
When sending funds to another person, the BTC blockchain needs around 10 minutes to confirm the transaction. It’s the same no matter where the sender and receiver are located.
Whether you’re sending money to someone in the same city as you or someone halfway around the world, it will always take around 10 minutes!
Compared to the time it takes to send money overseas with a bank, it is much faster to use Bitcoin. Particularly since banks can take up to three days to process the transfer. The issue is that Bitcoin is only able to process seven transactions per second. Thus, it is still far away from the speed of Ripple transactions.
XRP Transaction Speed
The Ripple works much better than Bitcoin – here’s why.
First and foremost, when sending XRP from one wallet to another, it only takes a few seconds for the transaction to be confirmed.
It makes Ripple a much better alternative to Bitcoin when it comes to transaction speed. XRP ledger is known as one of the fastest, with 1500 per second with transaction approval time of up to five seconds.
Even though BTC is the most popular crypto globally, the fact that it can only process a maximum of seven transactions per second is a considerable scalability issue that Bitcoin must address to fulfill the dream of becoming a global payments system.
All of the above stats make Ripple ideal for the multi-billion dollar interbank industry. Currently, banks must use a third-party institution, and as a result, transactions are expensive and can take around three days to settle.
Additionally, when banks are located in developing countries and need to trade in an unpopular currency, they often have to do multiple exchanges because of the lack of liquidity. Therefore, banks can use XRP as a liquidity bridge, saving institutions a lot of time and money.
Ripple vs Bitcoin Transaction Cost
Upon the launch of Bitcoin, the transaction fees were exceptionally low.
But as the system increased in popularity, users’ amount to pay has increased quite significantly. During its busiest time at the end of 2017, transaction fees cost as much as $ 40, unsustainable for micropayments.
Fun Fact: High Bitcoin Fees Was the Main Reason for the Creation of Bitcoin Cash!
On the other hand, Ripple is practically free regarding transaction costs, as the standard cost to complete a transfer is only 0.00001 XRP. To put that into real numbers, even when XRP hit its all-time high in January at $3.29, that would have represented a transaction fee of just $0.0000329. This means you can send over 30,000 transactions before paying $1 in transaction fees!
Ripple vs Bitcoin – Price Performance
Bitcoin’s Price History
Bitcoin is well known for its history of high volatility. However, 2017 was BTC’s best year yet, with BTC increasing its value by over 2000%. At the end of the year, Bitcoin hit its all-time high of $20,000, with a total market cap of just over $320 billion.
To put it in perspective, this resulted in a higher market capitalization for Goldman Sachs and Morgan Stanley! In January 2021, it hit the price of $40,000. A couple of days later, its price dropped to approx $30,525.
In terms of real-world use, more and more vendors are starting to accept BTC as a payment method, especially in Japan, where you can spend Bitcoin in over 200,000 different stores! Other well-known companies that accept Bitcoin include PayPal, Virgin Galactic, Microsoft, Expedia, and Overstock.
Nevertheless, it will take a long time before Bitcoin is used as the main global payment system. The main reason for this is that developers must fix their performance issues. For example, 10-minute transaction times, high fees, and scaling levels of just seven transactions per second are far from a sustainable payment system.
The good news is that the BTC team is working on the second layer of payment technology on top of Bitcoin called the ‘Lighting Network,’ which will hopefully take Bitcoin to the next level with fast, cheap, and highly efficient transactions. Scalable!
Ripple vs Bitcoin – Ripple Price Performance
As of March 21, XRP is ranked fourth in market cap, straight behind Bitcoin, Ether, and Binance coin. Just as for Bitcoin, the year 2017 was particularly interesting for Ripple’s price performance. At the start of 2017, it was only worth $0.0065. But by the end, it hit $2.40. Even though its price has declined ever since, it’s still considered one of the best investments in the cryptocurrency market, that’s due to its previously mentioned great scalability and the low cost of XRP transactions.
When it comes to the real goal of the parent company, Ripple Labs, they are building good partnerships with some of the biggest banks in the world. In fact, over 100 different financial institutions are currently testing the Ripple protocol, including Credit Agricole, Santander, and Bank of America.
In the future, it is estimated that the financial industry will use XRP to settle their interbank payments. The entire industry is worth billions of dollars every year, so if all goes according to plan, the value of XRP could soon reach new heights.
In Conclusion
Now you should have a fairly good idea of what sets these two crypto powers apart.
In many aspects, Ripple works much better than BTC. For example, the transaction execution is faster, cheaper, and more scalable. Also, the Ripple consensus mechanism is much better for the environment – it doesn’t waste large amounts of energy. Nevertheless, Ripple’s goals are different from Bitcoin’s, so don’t think of Ripple as “the next Bitcoin.”
BTC remains the number one cryptocurrency. And it is more suited as a store of value rather than a payment system similar to Gold or Silver.
So which cryptocurrency would you choose after reading this Ripple vs. Bitcoin guide? Have you decided to go for one over the other, or would you rather invest in both?
