Ripple Vs. Bitcoin: Things Investors Must Know
Ripple and Bitcoin are two popular cryptocurrencies serving different purposes. While both present a rosy picture to attract investors’, which one should be added to one’s portfolio? You can never know the right answer if you don’t know the prime differences between the two. To help you make wise crypto trading decisions, we’ve listed below the essential differences between the two that every investor should know. So let’s head quickly to the differences shared below.
Both have Different Methods to Validate Transactions
Ripple uses a unique distributed consensus mechanism that allows participants to verify the authenticity of transactions by conducting a poll. It allows for almost instant confirmations without the need to contact a central authority. XRP is still decentralized, and it is more reliable and faster than its rivals.
This means that XRP consumes very little energy compared to Bitcoin, which is considered an energy hog. Bitcoin, on the other hand, relies on a proof-of-work mechanism to validate transactions that takes a few minutes. Even Dogecoin uses the same transaction validation mechanism as Bitcoin yet consumes lesser energy. If both Ripple and Bitcoin are not interesting to you, the DOGE to INR price chart may entice you to invest.
XRP is Cheaper and Faster than Bitcoin
Bitcoin transactions confirmations can take many minutes due to the complex and intensive mining nature, leading to high transaction costs. But XRP transactions can be confirmed in seconds and are generally very cheap.
Ripple vs. Bitcoin – Real-World Examples
If you’re shopping from a retailer that accepts cryptocurrencies as an alternative payment method to fiat currencies, you can select to pay for your shopping order via the accepted fiat currency or Bitcoins. But if you have to make a cross-border payment of $100 to your acquaintance, your bank will issue instructions through the SWIFT system to facilitate the international money transfer after paying the necessary fees. This will allow the recipient to be credited with the equivalent amount of their accepted fiat currency. It may result in high fees at both ends, and processing can take up to a few days.
Enter Ripple, the payment and settlement system with a currency, XRP.
Ripple’s payment system uses XRP to transfer assets over the Ripple Network. Using it, you can instantly convert $100 to the equivalent XRP tokens which can then be transferred instantly to the recipient’s Ripple account. He will then be able to either convert the token to USD or another currency of his choosing or keep it as XRP tokens. If you want to make the transfer in INR, you can check the Ripple price in INR before making the necessary amount transfer.
Different Circulation Mechanisms for Bitcoin and XRP
Bitcoins are released to the network when they are found by miners. They don’t follow a release schedule, and their supply is dependent largely on network speeds and the difficulty of the algorithm used for mining them.
The release of XRP is controlled by a smart contract. Ripple had planned to release 1 billion XRP tokens per month, governed by an embedded smart contract. The current circulation is more than 50 billion.
Any unutilized XRP from a given month will be transferred back to an Escrow account. This ensures that there is no possible chance of misuse from an oversupply of XRP crypto coins. It will take many years for all crypto coins to become available.
Final Take on Ripple Vs. Bitcoin
Ripple operates intricately, but the above illustration explains its basics. Ripple is better than Bitcoin for its faster processing times and lower transaction fees. BTC, on the other hand, is more widely known and well-known than XRP. This gives it an advantage in many other areas. Bitcoin is a true public system and does not belong to anyone person, authority or government.
Although Ripple is decentralized, it is still owned and operated privately by the same company. However, both systems have their own cryptocurrency tokens. We would advise investors to carry out their own research before making any investment decision.