In the modern world, as digitalization and advancement rule over, it is quite an obvious matter that there would be the development of virtual money. Overtime, cryptocurrency is becoming popular in commerce. Developers continue to create forms of this type of currency following the rise of Bitcoins. Bitcoins are known to be original and leader of the cryptocurrency. Putting right behind comes Ripple, which is a network behind the cryptocurrency.
To make a comparison between the two, one needs to know about the details of both. Bitcoin and ripple differ significantly, like the two opposite poles of a compass.
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Bitcoin vs. Ripple
Bitcoin is a digital currency, instead of the traditional money we know, that is used for the purchase of goods and other services. It is run by public blockchain technology and is commonly known as Bitcoin cryptocurrency. The blockchain technology has verified transactions and keeps their records.
Currency is controlled by a group of systems and not by banks or the government. The purpose of creating this digitalized form of money was to avoid going through the government process of creating currency and provide the people with money directly.
Ripple, on the other hand, is not a currency but a payment system, for the banks and commercial organizations for money exchange and a better remittance system. Ripple is based on the digital currency, XRP, and managed by independent groups and a ledger. It was developed by the Ripple Company, to make a direct transfer of resources.
It is a process that is controlled by computer and other technological systems to decide on the values of any data from groups with multiple agents. This is used in cryptocurrencies to keep records of transactional data which is the trusted mechanism. Both bitcoin and ripple use this for the digitalized system of virtual money, with a difference in their methods. This is the sole factor that differentiates bitcoin and ripple.
Features of Bitcoin
Bitcoin has a mining advantage to release BTC tokens. The system of this currency works by mining, that is, proof of work (consensus mechanism) to authenticate the transaction and the miners gain profits. It is easy for anyone in the world to become a miner with simply the help of their computer and a connected device. The price of Bitcoin depends on the mining network. If the network is big, the cost gets higher as the production expense raises.
Bitcoin has more monetary value and widely known cryptocurrency as it spread globally. The transaction is, however slow and requires a fee, which is still lower than the traditional system of payment. A maximum of 7 transactions is done per second. The balances are recorded using numerical algorithms by complex calculations with the help of public and private key processes. The public key is similar to a bank account number and the address to send the money. The private key is like an ATM PIN for authorized Bitcoin transmissions.
The amount of bitcoin known to exist will only be 21 million. The use of bitcoin reduces double-spending. It marks the transaction when a value of bitcoin is spent and eliminates successive spending of that bitcoin. Bitcoin is used in places such as PizzaForCoins, OkCupid, CheapAir, Zynga, and some retailers on Etsy. It is based on a free system without any controllers, developed to make work of the financial world easier.
Features of Ripple
Ripple is not the currency, rather XRP is the actual cryptocurrency. The monetary value is changed into XRP. Ripple added a new feature to increase XRP coins through a small contract by companies. This ensures that no coins are misused for ample supply. The unused ones are sent to an escrow account in a specific month. The network uses a consensus mechanism different from bitcoins for validation of transactions.
The validation is done by conduction of poll, operated by servers or nodes. The participants are selected as trusted ones to vote and listed. This unique node list (UNL) is in control of the network that protects against malicious objects. The transaction system is, therefore, faster, taking place in a matter of seconds. The charge of ripple is also lower than bitcoin. Ripple allows the smooth transfer of any currency.
The system is under the hands of a management team that decides for actions to be taken, even though it works by decentralization that is without any intermediary. Thus even though the transaction happens with ease and transparency without an intermediary, the Ripple system has limitations. Ripple is used by many banks and even some market places have intended to use the system for its effectiveness. Many organizations have thoughts on bringing ripple to their system. This is why Ripple is gaining popularity as well. The system is yet to be established.
Along with the advantages and disadvantages of both Bitcoin and Ripple, it is clear that the digitized currency system makes life easier. They seem more effective, easy, and time-saving. Anyone would be encouraged to make investments with these forms of currency. However, since they are not necessarily in the regulation of any party, they don’t promise security.
Also, the future of them is quite uncertain, though bitcoin might be considered a safer choice for it not having a controlling body. They may easily be on the top or fall drastically. One needs to think carefully before deciding on investments because there are risks of great loss in the market.
Bitcoin is the first and original cryptocurrency that emerged after the development of the system. It is still widely used and popular across the world. Ripple works in a complex way than bitcoins but has greater and faster ways of transaction. But both bitcoin and ripple have made significant changes in the transfer of currency systems.
Transactions are made all over the world with less hassle. They have saved time and reduced the difficulty in handling money. However, both of them have limitations and don’t allow people to choose one over the other. They differ in their ways and one can’t be said to be better than the other. Both of them would improve as time passes by.
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