Differences Between Bitcoin and Ripple | Jubiter.com

Differences Between Bitcoin and Ripple

Ripple was created with a vision to serve as a super-fast, zero-fee payment processor and currency exchange that interconnects banks and other financial institutions.

The initial idea of Ripple has its roots back in 2004, although it was launched in 2013 as a cryptocurrency (XRP). Ripple has been established in the top 3 cryptocurrencies with a market cap of $33,395,022,171 (April 2018).

The Core Differences Between Bitcoin and Ripple

Maximum Supply

Bitcoin has a finite amount of coins – 21 million - that will ever be created, that come in circulation as the miners validate transactions and discover new blocks by solving a complex algorithm, using the Proof-of-Work method. Ripple consists of 100 billion tokens (38 billion in circulation) that were pre-mined, and the creators hold almost 20 billion of them.

Transaction time

Transactions in the Bitcoin network can only be settled in Bitcoins (Lightning Network will offer cross-chain transaction capabilities). Ripple acts as an exchange, where users are able to execute payments in fiat currencies that are settled off-chain. This is why financial institutions (more than 100 according to the company) consider Ripple as a substitute to the time-consuming SWIFT protocol and have shown interest in Ripple’s software, but not its tokens.

Fees

In Bitcoin, there are applicable fees that are dependent on the size (in kilobytes) of a transaction; users can speed up a transaction by paying a premium fee to incentivize the miners. Ripple, on the other hand, charges a minimum 0.00001 XRP fee, to avoid the network overload. In return for his fee though, Ripple destroys tokens, that will gradually result in reducing the number of the total XRP in circulation and increasing the value of the existing ones.

Scalability

When it comes to scalability, the average Bitcoin transaction time is 10 minutes while Ripple can validate a transaction in only three seconds. Ripple can handle a massive 1000+ transactions per second, compared to Bitcoin’s three transactions per second. However, the adoption of SegWit that will lead to the implementation of the Lightning Network might change the setting in the near future.

Decentralization

Bitcoin is a completely decentralized cryptocurrency that provides transparency in a pseudonymous manner. The Bitcoin core team has the ability to apply changes to the network (soft forks), but every activity requires the majority’s consensus (at least 51%) in order to avoid irreversible changes in the Blockchain. Ripple’s governance is run by a central hub, with the ability to freeze funds and reverse transactions. Decisions about changes in the Ripple’s Blockchain require the network’s consensus as well, through identified validator nodes, which is obtained by a proprietary amendment system.

Every movement of Bitcoins can be traceable by every member of the Bitcoin Blockchain, without revealing the identity of the holder. In addition to the above, Ripple can trace any users’ data similar to a bank.