Though cryptocurrency has always been associated with Bitcoin and vice-versa, things have changed quite a bit over the past many years. Many new names have come to the market and one such name that is indeed causing quite a ripple is Ripple. Yes, we are talking about Ripple cryptocurrency. It has become quite popular within a short period of time because of certain features that are not only the same as that of Bitcoin but perhaps even better in some cases. For example, one of the biggest reasons for the success of bitocoin was its decentralized mode of operations. The same features and something more is being offered by Ripples. If you follow people and articles that revolve around cryptocurrencies, it is possible that you will come across many discussions that center around Bitcoin vs Ripple. In fact , there are a section of cryptocurrency users who believe that it will not be long before Ripple becomes as good as Bitcoin if not better. So, where does the truth actually lie? Let us try and find answers for the same over the next few lines so that the readers have a better idea about Ripple vis-à-vis Bitcoin. We are sure it will help our readers to know more about the reasons as to why you should buy Ripple.
Bitcoin Still Rules The Roost
While there is quite a bit of talk about Ripple becoming a big name to reckon with in the cryptocurrency industry, there is no doubt that even today Bitcoin continues to be the dominant players in the world today. It offers quite a few things which customers can never offer to ignore. For example, the transaction fees charged by bitcoin are much lower when compared to other traditional online payment mechanisms. Further, the operation continues to be highly decentralized and the problems associated with government fiat currencies are not applicable to it. Bitcoin has been around for many years now and it has won the trust and confidence of hundreds of thousands of users in the currency industry. Bitcoin also has evolved and it has been able to bring out some innovations that are quite attractive and perhaps even path-breaking. It continues to show marvelous growth, despite the fact that new and powerful players like Ethereum have entered the market. In terms of overall market share, it is quite obvious that Bitcoin towers much higher when we look at other players, old and new.
Will It Last Forever?
All creations of mankind have never had a successful and unbeaten track record for thousands of years. The same could be the case with Bitcoin. There are reasons to believe that there run of unhindered and unchallenged leadership in the cryptocurrency markets will not last forever. As we speak and read this article, there are many big names in the cryptocurrency market who are ready to take on Bitcoin strongly. One such name is Ripple and though it may look a bit premature, it may not be complete dominance for Bitcoin because Ripple has some exciting new things to offer and it might pose serious challenges to Bitcoin the market leader in the months and years to come. We need to face that fact that the cryptocurrency marketplace is becoming quite crowded and there are many tokens, digital coins and ICOs that are seen happening in the market place. Competition is good for any market and Ripple might be able to take advantage of the competitive market scenario and may even offer a big run for money to the established players like Bitcoin.
What Makes Ripple Quite Interesting?
There are a few obvious reasons as to why Ripple could be a tough competitor to Bitcoin in the years to come. It continues to move forward at a rapid pace and offers quite a few things to the customers. It is making more adaptable and versatile, keeping in mind the changing dynamics of the market situations. It would be pertinent to mention here that as we read this article, Ripple has quietly moved the third as far as Coin Market Capitalization is concerned. It is third behind Bitcoin and Ethereum. But the gap between Ripple and Bitcoin is quite substantial. Hence, there will be a normal question as to how Ripple will be able to overhaul and overtake Bitcoin. The next few lines perhaps might bring some clarity on the subject. We are happy to share a few things that could set apart Ripple from Bitcoin.
Some Basics About Bitcoin
There is no doubt that Bitcoin is the largest and oldest cryptocurrency in the market even today. This is a form of electronic cash and it makes use of a unique peer-to-peer system to make things happen. This cryptocurrency was introduced in the market with the main objective of providing customers with an alternative to fiat currency. Bitcoin operates with the help of a public blockchain ledger. It was put into practice as a digital currency with the main objective of payment of goods and services. Standalone it is named as Bitcoin but when it is paired with other currencies it is referred to as BTC. The backbone of Bitcoin is blockchain. This is akin to a ledger that is distributed in the public. It is verifiable and keeps record of all the transactions made using this mode of digital method of payments and receipts. The transactions are validated by miners and they are added to the Bitcoin blockchain. Miners also have the capability of finding new bitcoins.
The balance bitcoins are kept for use by the public and with the help of private keys. These are not exactly keys in the traditional sense but are long strings of letters and numbers. They are linked together with the help of a complex mathematical encryption algorithm. Incidentally the algorithm is the same as the one that was created in the first place. The public key functions as an address through which the world sees individual accounts. This is where other people can send bitcoins to. There is also private key and it is similar to ATM Pin.
The price of Bitcoin is determined by the size of the mining network it is able to create. The larger the network, the more expensive and difficult it becomes for producing new bitcoins. It is basically a question of demand versus supply equation. As the cost of production of new bitcoins increases, the price of bitcoin also increases.
How Could Ripple Be Different
The overall objective and design of Ripple is to ensure that it offers an inexpensive, fast and secure payment that moves across international border. This is done through a medium called Ripplenet. This is a network that is made up of payment providers and banks across the worldwide. Ripple has been able to make its presence strongly because of a few obvious reasons. It has a proven and time-tested digital payment protocol system when compared to its cryptocurrency, XRP. It operates through a platform that is decentralized and has peer-to-peer operational facilities. It has again stood the test of time and does allow for smooth transfer of money irrespective of the form it is available in. Hence, it does not matter whether the money is in the form of Bitcoin, Yen, Litecoin or USD amongst other major currencies.
The core of Ripple comprises of a robust asset exchange, payment settlement and remittance system. It works on the same lines as that of SWIFT. Many of us may be aware that SWIFT is used for security and money transfers across international borders. A network of financial intermediaries and banks make frequent use of this digital and non-fiat currency platform. When we talk about XRP, we are referring to a bridge currency that helps connect various currencies. It comes with a fundamental design. It does not discriminate one cryptocurrency or fiat currency against another. This is unique and makes it incredibly easy for the users to exchange one type of currency and replace it with another. It also would be pertinent to mention that each currency on the ecosystem has its own gateway. In other words, bitcoins can be exchanged for Ripple and vice-versa or for that matter any tradable cryptocurrencies.
Distributed Consensus Mechanism
While Bitcoin uses blockchain mining, Ripple makes use of a unique system known as DCM or Distributed Consensus Mechanism. It works with the help of a network of services for the purpose of validating transaction. A poll is held on the networks and this determines, through consensus, the validity of the transaction and also its authenticity. It also helps in the customers and other stakeholders to get instant confirmation without the need for any central authority. This goes a long way in maintaining Ripple’s decentralized system apart from helping it to remain reliable and fast.
When we talk about the initial development of Bitcoin, it was primarily as a digital currency. The main intent was to ensure that it functioned well as a method of payment for goods and services.
On the other hand the initial objective and intent for Ripple was to have a reliable and efficient network for banks to settle payments. Apart from that, it also functions as a trustworthy money transfer system and also as an independent currency exchange. The core objective of Ripple was to have a system in place that could help in direct transfer of assets and that too in real-time. This has made the whole thing more transparent, cheaper, and also more secure when compared to the existing payment methods, including SWIFT.
When it comes to maintenance, Bitcoin makes it happen with the help of a group of developers. They are passionate about their skills and crafts. They work in a highly decentralized system and it is not controlled by any bank, third parties or even government. There is mystery surrounding the person who is responsible for all these. However, there is an entity by the name Satoshi Nakamoto who could be behind all this.
On the other hand when we talk about Ripple, we are referring to an official company that has clearly defined goals and objective. Further, there is also an array of investors known by the name Ripple Company. The company was founded in the year 2012 by two persons by the names Jed McCaleb and Chris Larsen. The company as of 2016 had offices in the UK, Luxembourg and Australia.
Mining & Technology
As mentioned above, Bitcoin works on blockchain technology and it uses mining extensive. Mining works as a proof of work and also is useful for having new bitcoins. On the other side, Ripple makes use of an iterative consensus ledger and uses network of validating servers to do the job. It uses this alongside XRP cryptocurrency tokens. The management of the entire Ripple Network is done by a range of independent servers. These servers automatically compare the various transaction records on a continuous basis. Each second, it is obvious that a new ledger of Ripple would come into existence. The design structure of Ripple is done in such a way that it does not permit for any type of mining. This is perhaps one of the most obvious and differentiating factor between Ripple and Bitcoin.
When an entity uses Bitcoin, he or she will usually receive a reward. This could be in the form of bitcoins. On the other hand Ripple or XRP has some 100 billion coins that are in the pre-mining stage. Of these 38 billion are in the market and the rest are in the market. They are likely to be released in the market on a periodic basis.
Mining is the major strength of Bitcoin and lack of mining is the major differentiating factor as far as Ripple is concerned. The distribution rate between these two cryptocurrencies is also different and the same is the case as far as transactions are concerned. While some produce more, others produce less in a specific time period.
The above differences in structure, technology and way of operation would certainly have given us a reasonably good idea about the differences between Bitcoin and Ripple. The intents and objective of both the cryptocurrencies are quite different. While bitcoin may be the quintessential cryptocurrency, the surge in the growth of Ripple cannot be brushed away as a flash in the pan. It is growing fast and it is set to give Bitcoin a real run for its money in the years to come.