Whether you’re a new investor in the cryptocurrency market or have experience in crypto trading, you’ve likely come across Ripple (XRP) and Bitcoin (BTC). In the thrilling world of cryptocurrencies, these two are considered as the most popular and widely discussed digital currencies.
Understanding the key differences between Bitcoin and Ripple (XRP) can help you navigate the crypto market better and become a seasoned investor, as both cryptocurrencies serve very different purposes.
In this post, we learn more about Bitcoin and XRP, along with the key differences between the two, to help you make an informed decision.
XRP is the native cryptocurrency of Ripple, a blockchain-based digital payment network designed to serve the needs of the financial services industry. XRP runs on the XRP Ledger, a blockchain engineered by Arthur Britto, Jed McCaleb, and David Schwartz.
Investors can acquire XRP as a crypto investment for exchanging with other cryptocurrencies or to facilitate transactions on the Ripple network.
What is Bitcoin?
Bitcoin is a decentralised digital currency that is primarily exchanged through a peer-to-peer network without centralised authorities. It was introduced in 2008 by an anonymous creator known as Satoshi Nakamoto.
Bitcoin is the world’s first decentralised cryptocurrency that uses blockchain technology to secure and verify transactions.
XRP vs Bitcoin: Key differences
The key differences between Bitcoins and XRP are summarised in the below table and explained in more detail in the next section.
| Coin | Bitcoin | XRP |
|---|---|---|
|
Ownership
|
Publicity-Bitcoin is not owned by anyone.
|
Private company – Ripple is owned and presently operated by Ripple. |
|
Algorithm
|
Proof-of-work or SHA–256.
|
RPCA or Ripple Protocol Consensus Algorithm.
|
|
Block size
|
1 MB
|
20 MB
|
|
Transaction cost
|
$10 BTC |
0.00001 XRP
|
|
Maximum supply
|
21 million BTC tokens
|
100 billion XRP tokens
|
|
Market cap |
4%
|
56% |
|
Transaction time
|
10 minutes
|
4 seconds
|
|
Price per USD |
$41,060.87 USD
|
$0.6018
|
Here are more detailed explanations of the differences between Bitcoin and XRP:
1. Ownership
Bitcoin is essentially a decentralised cryptocurrency with no pre-mined or central authority. It mainly relies on a distributed network of miners and nodes for both security and consensus.
In the case of XRP, Ripple Labs holds a significant portion of XRP tokens. This type of centralisation is already a topic of debate about XRP’s decentralisation and its independence from the company’s control.
2. Algorithm
The Bitcoin network requires a massive amount of electricity to secure owing to its Proof-of-Work consensus mechanism. Consensus mechanisms are primarily the way decentralised networks verify the state of the blockchain.
In Bitcoin’s PoW protocol, miners or network nodes compete against each other to answer a complex mathematical equation accurately.
Ripple, on the other hand, utilises a distributed ledger technology, which is not the same as blockchain. Ripple Protocol Consensus Algorithm (RPCA) is a unique distributed consensus mechanism that offers Ripple with its fast transaction speeds.
3. Block size
The size of a block in cryptocurrency is equal to the amount of data it stores. So, the largest amount of data a blockchain block can hold is referred to as the block size. In the case of Bitcoin, the block size is limited to 1 MB.
Whereas XRP’s block size is 20 MB, which is much larger than the average block size of other cryptocurrencies.
4. Transaction cost
The average transaction cost in Bitcoin is around $10 based on a range of factors, including network congestion. However, it is variable and may change as per the market.
Ripple, on the contrary, utilises a fixed transaction fee system where a standard transaction costs around 0.00001 XRP. Ripple has kept its fees low intentionally to help banks and financial institutions carry out large transactions daily.
5. Maximum supply
Bitcoin has an upper cap of 21 million tokens and the mining rewards that a Bitcoin miner earns get halved every 4 years to ensure that the new BTC is mined at a declining rate.
On the other hand, the 100 billion XRP tokens have already been pre-mined and will be gradually released into the market. Out of these, Ripple Labs owns approximately 6 billion of the tokens, while ~55% of the entire supply is locked up in escrows.
6. Market cap
The market cap in the case of Bitcoin is 56%. However, it is just 4% in the case of Ripple XRP.
7. Transaction time
A transaction on Bitcoin takes around 10 minutes to complete on average. Several factors affect the transaction speed here, congestion on the network being the most prominent one.
On the contrary, transactions on the XRP or Ripple network take around 3-5 seconds as fast transaction speeds are very important for Ripple to function as a payment system and remittances.
8. Cost per USD
Bitcoin’s price changes constantly because the crypto market is active 24 hours a day, 7 days a week. Bitcoin’s price today is US $41,049.41, with a 24-hour trading volume of $23.58 B. Whereas the cost per USD for XPR is $0.6018.
9. Use cases
Bitcoin is a crypto currency with no central authority or any third-party controlling its demand and supply. This makes it suitable to pay for various services such as booking hotels or purchasing goods.
Ripple, on the contrary, focuses primarily on international payments, currency exchange and remittances. Investors can use Ripple to transfer money abroad and exchange currency way quicker as it is cheaper as well.
TradingLeagues for BTC and XRP trading
If you are new to BTC or XRP trading and wondering about where to start, TradingLeagues offers an excellent platform to learn the tricks of trading while playing a range of exciting games.
It is an excellent solution for covering the limitations of simulators and paper trading platforms.
By simply joining the TradingLeagues and playing the top trading games on the platform- Classic Leagues (for advanced players), Battle Leagues(for beginners), Selection Leagues (for intermediate players), and Target Leagues (for beginners)- you can learn the basics of trading in BTC and XRP.
Classic Leagues is one of the most popular games on the app that allows players to compete with each other as they engage in day trading. The key highlight of this league is that it allows you to learn more about investing while also competing in an environment that is completely skills-based.
Other features
- It allows you to check the 'Leaderboard,' which showcases the complete list of participants with their avatars and the winning positions.
- Offers real-time charts for tracking price movements.
- Helps you find the best time for purchasing/selling and gives you options for applying basic technical indicators as well.
The key highlight of playing games on TradingLeagues while you trade in BTC and XTP is the chance you get to win real money and employ various game strategies simultaneously.
Conclusion
Bitcoin (BTC) and Ripple Labs (XRP) are both excellent investing options based on what exactly you’re looking for in terms of cryptocurrency. While Bitcoin is more popular, it has a very limited supply. In contrast, XRP comes in a higher supply and is much faster and cheaper as well.
Overall, depending on the purpose, both make a great choice for crypto investors. The need is to thoroughly check and consider the differences in both options and accordingly decide on the more convenient currency option.
