How is Bitcoin different from Ripple?
"How is Bitcoin different from Ripple?": Behind this question there is a long controversy, specifically since many question whether XRP should be compared to BTC, since they seem to be two poles apart.
Bitcoin vs. Ripple
Before talking about their similarities or differences, it is important to know each one separately.
What is Bitcoin (BTC)?
It is the first cryptocurrency and, therefore, the one that gave way to the creation of the rest of the cryptos that exist in the market today.
The nature of Bitcoin is specifically characterized in decentralization. That is to say, there is no entity behind it but it is the crypto users who give it value.
Therefore, the price of Bitcoin is determined by everyone who participates in its buying - selling process, the simple Law of Supply and Demand.
This means that the value of Bitcoin is based on the trust of its users, its usefulness and popularity.
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What is Ripple (XRP)?
The fundamental aspect from which we must start is that Ripple is both a platform and a Cryptocurrency development company. That is, Ripple is a private company that is developing a payment network, known as RippleNet, on a distributed ledger database (Ledger XRP)
The goal of RippleNet is to serve as a network connecting banks and businesses with the goal of facilitating the hassle-free experience of sending and receiving money globally.
XRP is the token used to represent the transfer of value through the aforementioned network. Therefore, it is the cryptocurrency associated with this system.
From this we must emphasize the conclusion that XRP and Ripple are not the same.
XRP Price on Crypto Online Crypto Trend Tool
What is the difference between Bitcoin and XRP?
So, now that we know each of these cryptocurrencies, it's time to test Bitcoin vs. Ripple.
Different purposes: Bitcoin was born in response to the financial crisis of 2008 and, therefore, its purpose is to be a currency without intermediaries, that is, without banks. While Ripple was born in 2012 to be used by financial institutions.
Decentralization: Bitcoin is 100% decentralized while this feature is widely questioned for XRP.
Transaction validation: Instead of using the concept of mining, the Ripple network uses a consensus mechanism.
Mining and circulation: Bitcoin uses a proof-of-work and mining system to circulate new BTC. However, Ripple was not designed to be mined. Unlike BTC, it is a Smart Contract that is responsible for the launch of XRP. So, according to the Smart Contract, Ripple planned a maximum launch of 1 billion XRP every month.
Ripple is privately owned - and has a less open and democratic Blockchain. Unlike Bitcoin which, anyone with the means can mine it. In fact, 60% of XRP tokens are owned by Ripple. Marking an important difference between Bitcoin and Ripple.
Usage: Bitcoin is used as a payment method, speculative asset, and store of value. However, Ripple was not developed as an alternative to cash. Ripple's fundamental goal is to make banking transactions between different types of currencies less expensive and more efficient.
Transaction speed: XRP's speed is about 3.5 seconds each and its transaction fees are very low. While Bitcoin transactions are slower and more expensive.
How is the Ripple Network Maintained?
Ripple's money transfer systems are trusted by banks around the world. To ensure this trust without losing its transparency, Ripple employs a combination of both centralized and decentralized protocols.
Ripple Labs chooses the protocols that validators must follow. In addition, it publishes a Unique Node List (UNL) of trusted and verified validators. Ripple users are not required to use these validators for transactions, although it is recommended. In addition, validators operate independently updating your record without having to confirm with a central system first.
This raises the following question - "Is Ripple a centralized or decentralized platform?"
Ripple is a centralized system when it comes to protocols and acceptance of entry into the network. It is decentralized when it comes to how you validate transactions.
Ripple products, including XRP, are created to be moved quickly and efficiently. Ripple Labs' global network of active users, along with the ability to integrate payments into applications, ensures a use case for XRP. This can be attractive to traders who consider XRP to have potential for long-term use.