Ripple, along with Ethereum, are two of the most exciting projects in the world of blockchain today despite being on opposite sides of the spectrum.
Ripple is a central finance service that allows banks around the globe to transfer funds easily and swiftly. Ethereum is a worldwide computing platform that allows decentralized applications (dApps) to build on top.
What is Ripple?
Ripple refers to the title used by the name of the company as well as the currency. Ripple, the company which is doing business under the name Ripple Labs Inc., is a provider of worldwide payment solutions that provide a more efficient and cheaper method to move money anyplace around the globe.
Ripple coin, also known in the form of XRP, is a cryptocurrency that is used in several companies’ payment methods. The company claims the Ripple network to be 1,000 times quicker and 1,000 times less expensive than a Bitcoin payment.
In addition, that XRP transactions are significantly less costly than traditional methods of transferring money. For traditional bank transactions, transfers can be completed in seconds instead of days or even hours.
Ripple (the firm) has formed partnerships with over 100 banks that will use its xCurrent system for payment settlement that will settle cash transactions with almost instantaneous efficiency.
At the beginning of 2019, the business announced that MoneyGram, one of the largest money transfer firms, would use XRP for its payments.
What is Ethereum?
Ethereum is rooted in Bitcoin. In the aftermath of the 2008 financial crisis, Bitcoin was created and sought to satisfy the demand for an electronic currency that didn’t require banks.
The network evolved into a bank, with every Node (computer server) keeping the complete list of Bitcoin transactions.
Through decentralization, no central organization can influence the network. This is why many developers are eager to join this chain and create their dApps on top of it. Exchanges, derivatives, and other financial applications can work without a central authority. Moreover, users around the globe can communicate peer-to-peer.
The ability of Ethereum to extend its capabilities in ways that we’ve never imagined is one of the reasons that have been its main reason for being so well-known over such a brief period.
It’s more than just another money; if the adoption rate continues to increase this way, it could be a disruptive technology.
Ether is the network’s internal currency of Ethereum. However, it is frequently called Ethereum, which makes Ethereum broad enough to refer to the network, technology, or even the currency.
Ripple Vs Ethereum: The Main Objective
With its decentralized platform, which allows people to do business and trade without being controlled by any central authority, Ethereum was created to compete with financial institutions. In turn, Ethereum serves as a platform that allows people to meet to discuss ideas and agree on how to implement different enhancements.
- The peer group is also gathered for projects they support with Ethereum. In addition, it’s used to allow the creation and development of new coins that fall under the ERC20 standard.
- However, Ripple was developed to assist financial institutions instead of competing with them. The blockchain initiative aims to make it easier for blockchain financial transactions implementation for institutions of finance. The initiative is more central than decentralized. Therefore, any modifications must be approved by all parties.
- RippleNet that Ripple is the powerhouse behind it is a cryptocurrency solution that is rapidly gaining recognition for its ability to facilitate cross-border transactions. Transaction settlements that are instant and two-way communication are additional options the system offers.
- While Ethereum is viewed as an electronic token and means of exchange, Ripple presents itself as an efficient instrument to facilitate international trade.
Ripple Vs. Ethereum: Coin Distribution
The XEP Ledger for Ripple is believed to be updated using Protocol Consensus Algorithm, which is different from proof-of-work methods used by rival cryptocurrencies. Because the cryptocurrency’s native coins were initially pre-mined, mining XRP isn’t an alternative.
- At the beginning of the project, at the time of its launch, more than 100 billion tokens of XRP had been produced; of these, Ripple currently has 7 billion. Additionally, Ripple has authority over nearly 55 billion XRP tokens through an Escrow account.
- Ethash is a proof-of-work method that is utilized to support Ethereum. However, it is also used to sustain Ethereum on the other side. The primary cryptocurrency used by the network, Ether, can also be used as a payment method to run distributed applications on Ethereum.
- Contrary to Ripple, Ethereum can be mined, which involves using computers set up by miners to tackle cryptographic issues. Additionally, sixty million Ether were created for the presale market in 2014, of which 20 percent (or 12 million) were allocated for development funds.
Ethereum vs Ripple: Technology and Future Development
Ripple is an open-source electronic payment network that permits immediate payments with minimal costs. The protocol of the network allows transactions to be made between currencies without the need for a unifying authority.
Ethereum is, on the contrary, a piece of software that permits validation and the execution of codes using the Ethereum blockchain. Ethereum can also support decentralized applications similar to traditional computer programs, with a higher level of security and less chance of interruption.
Scalability of Ripple vs Ethereum
Ripple and Ethereum cannot be effectively assessed without considering the two blockchains’ scaling capabilities. Scalability is the number of transactions the blockchain can handle within a certain period.
- Compared to Ethereum and other cryptocurrencies, Ripple has an advantage due to its blockchain’s capacity to process up to 1,500 transactions every second. This is greater than Ethereum can handle and has attracted the interest of the mainstream financial sector to the Ripple network.
- In comparison with Ethereum, Ripple is faster in processing transactions. Every two minutes Ethereum will complete a transaction. Contrarily, Ripple may complete a transaction every four seconds.
Ripple & Ethereum- Advantages and Disadvantages
Let’s discuss the Ripple first. Here are the benefits first.
Ripple has made the whole payment process, which includes cross-border transactions, quicker, more efficient, and clear.
In the XRP network, transactions are completed in a matter of minutes, making it a perfect choice for institutions with large amounts of money.
Ripple can bridge the gap that exists between the world of digital currencies and the traditional financial system.
However, the main problem the Ripple is the fact it’s by nature private and not decentralized, as about a majority of the tokens are held by the Ripple Labs team.
Ethereum is a publicly-owned blockchain network. Therefore, it is the entirely secure and transparent same way.
Ethereum is concentrated on running the code that powers any decentralized application, which is why it has gained so much recognition.
While the Ethereum network continues to operate, Ether as a currency will be required. Furthermore, the use that is a part of Ethereum, Smart Contracts, continues to grow.
Due to its speed of transactions and the number of transactions it can complete in a single second, Ripple defeats Ethereum when dealing with currency transfers.
The advantage Ethereum can offer Ripple when handling a wide range of complex interactions between various parties has resulted in its use for things like smart contracts.
Since both blockchains have advantages in their areas of expertise, the Ethereum and. Ripple conflict will likely last for a long time.