Different systems and different economics, but rising as good investment options.
Both Ethereum and Ripple use the same blockchain technology but serve different purposes to the masses. Launched in 2015 and founded by a Russian-Canadian developer Vitalik Buterin, Ethereum is the first blockchain project that introduced smart contracts and allowed to create apps whereas Ripple blockchain was created in 2012 and was built and launched by a private organization called Ripple Labs. The objective was to create a blockchain protocol to introduce a decentralized cross-border payment.
Both Ethereum and Ripple have their unique coins (Ethereum’s Ether and Ripple has its XRP tokens). Both of these cryptocurrencies play a huge part in diversifying the crypto sphere and offer a different take on the concept of cryptocurrencies. With this article, we will take a closer look at what distinguishes Ethereum from Ripple and what each of them has to offer to the crypto market.
As investment options and to know where the Ethereum price or Ripple price will go, we need to understand both first.
ETH and XRP Overview
Ethereum was created as the next evolution of blockchain. Whereas Bitcoin acts only as a financial system, Ethereum is move like a distributed computer. The Ether coin was designed to be used within the Ethereum network as a value that would power the whole ecosystem. Since then, the importance of the coin has grown and is accepted as a form of payment widely.
Coming towards XRP, it is the native coin of the Ripple Ledger and it was built to cater to the needs of truly decentralized global banking payments. Both the XRP Ledger and the XRP coin runs independently from Ripple, although the parent company Ripple uses both these for multiple tasks. The XRP Ledger serves as a blockchain on which parties can construct solutions, similar to the Ethereum blockchain.
Ethereum: a Virtual Computer
Ethereum is more than a digital currency, it is a development platform as well. It comes with its programming language Solidity and combined with this programming language; developers can create their applications based on Ethereum Blockchain called decentralized applications (dApps). The cost for operating is Ether token. The Ethereum network is now the second largest in the world, behind Bitcoin.
The smart contract capability has led to many innovative solutions in the market, such as modern DeFi (Decentralized Finance) applications such as Uniswap and Compound. Another concept is the Decentralized Autonomous Organization (DAO), where the users in control of the platform and decide on the operational aspects such as new services, changes to existing ones and the financial models used.
Ripple: Moving Money
Ripple is enhancing the banking system and the overall user experience. Enabling faster, more secure payments at a much lower cost. Designed for corporate finances, it is aimed at banks and financial institutions for a cross border exchange and transmission of money. In 2018, MoneyGram (News - Alert), the world’s leading money transmitter announced using XRP in its payment flows. Later on, it advanced the money game by forming partnerships with over a hundred banks globally to utilize its xCurrent payment settlement system to settle cash transactions with extreme efficiency.
Ethereum VS Ripple
While both Ethereum and Ripple can serve the same purpose, and have several aspects in common since both stem from the same technology (blockchain), there are differences.
Transaction Speed
Ethereum blockchain takes approximately a minute to transfer funds and can take up to a few hours (but that largely depends on the network load and the fee submitted) since it can process only a maximum of 15 transactions per second. On the other hand, when a user sends XRP coins, it takes 4 seconds before the transaction is verified, this makes the Ripple blockchain about 4 times faster than Ethereum.
Fees
With limited transactions possible per second, the fees are getting more expensive on Ethereum. For instance, it takes around $5 these days, but has been known to go as high as $50 in high activity. When it comes to Ripple, the transaction fees are lower and the standard fee is 0.00001 XRP, which at roughly $1.13 per XRP at the time of writing, is practically free.
Scalability
Ethereum can only process about 15 to 30 transactions per second. On the other hand, Ripple XRP can process about 1,500 per second, which is significantly way more than Ethereum. XRP users don’t have to worry about waiting time when the load increases.
Price Comparison and Future
At $1.13, Ripple price is extremely small in comparison (Ethereum price is around $3,200). XRP hit its all-time high in January 2018 ($3.40) while Ethereum crossed a whopping $4,356 this year in May.
There is no doubt that Ripple and Ethereum are the two of the most promising projects in the blockchain space despite targeting opposite ends of the spectrum. In 2022, Ethereum will launch its much-awaited update of version 2.0. The update is said to bring several benefits, including more transactions per second, increased security, and to adapt going green by reducing carbon footprint.
On the other hand, XRP doesn’t need to do anything as such. It is already efficient and technologically a better option. That being said, XRP has still to prove a lot before rivalling Ethereum’s value, which doesn’t seem to be such a far stretch.
As investments, both have shown to be extremely potential and a bright future ahead.
