With cryptocurrencies and blockchain becoming a crucial part of our lives, people are spoilt for choice. Although the most famous cryptocurrency is Bitcoin, Ripple is also rapidly gaining attention among cryptocurrency investors and enthusiasts. Let’s have a look at the fundamental differences between Ripple and Bitcoin.
1. Main Agenda
Bitcoin was developed with the aim of paying for services and goods. Ripple, on the other hand, was created for banks and financial networks as a payment settlement, money transfer system, and currency exchange.
The main idea of Ripple was the creation of a system which facilitates direct asset transfers in real-time which are cheaper, more transparent, and secure than the existing payment methods, such as SWIFT payments.
2. Ownership and Developers
Created by Satoshi Nakamoto, Bitcoin is managed by Blockchain enthusiastic and miners. It is a decentralized system and isn’t-regulated by any bank, government, or third party. So, in a way, the system is managed by the public.
Ripple has been developed by the Ripple company, founded in 2012. In the years 2015 – 2016 the Ripple company had established offices in Australia, Luxembourg, and the UK. So, it’s owned by a private company.
Bitcoin is a blockchain-based currency using mining (proof-of-work) whereas Ripple uses a consensus ledger and validates server networks along with XRP cryptocurrency tokens. A new ledger of Ripple is created every second, and the network is managed by a range of independent servers validating the transaction records continually.
4. Mining rewards
Out of the 100 billion XRP tokens that were pre-mined initially, only 38 billion are available; the rest can be periodically released in Ripple Labs. The maximum supply of Bitcoin is just 21 million and is not pre-mined. Miners of Bitcoin are rewarded with a certain fraction of Bitcoin.
5. Issuance of coins
Bitcoins have global outreach and are more costly as compared to Ripple. Unlike ripple, which owns 60% of the XRP and the rest are distributed in the world, bitcoin has given the sole issuance to the people.
6. Transaction speed
Ripple is faster when compared to bitcoin. Bitcoin transaction confirmations take a minimum of 10 minutes on average, while XRP transaction confirmations take approximately 3 seconds which is 200 times faster.
7. Energy Cost
Mining of Bitcoins consumes considerable energy and can significantly impact a miner’s electricity bill. However, the electricity cost per transaction for Ripple is negligible. These are some of the essential differences that we found useful for existing and potential investors. Do you know any other differences? Let us know in the comments section.