If you are not an investor, it may seem to you that Bitcoin is the only cryptocurrency out there. The reason is that this digital asset happens to be the leader on the market, and everyone talks about it.
However, there are a lot of cryptocurrencies these days. Some of them are new, while others are quite popular. As of now, there are four major digital assets on the market – Bitcoin, Ether, Binance, and XRP. In this review, we will try to understand the difference between Bitcoin and XRP is. So, you should learn what these coins are about before you start looking for a BTC to XRP exchange.
What is Ripple?
Ripple happens to be the name of the network and company behind the XRP digital asset. Initially, it was a peer-to-peer company trust network, using which people could bypass banks to open credit lines and make loans.
In 2012, the company changed tracks and launched its own digital asset – XRP. The purpose of the cryptocurrency was to be an intermediate exchange mechanism between two networks or coins.
Ripple claims that it is a global payments network on its official website and refers to a few well-known financial services and banks as their clients. The XRP coin is utilized in the company`s products to provide quick conversion between various crypto coins.
What Is Bitcoin?
Bitcoin happens to be a digital asset, which was introduced in 2009. The cryptocurrency is known for its lower transaction fees compared to traditional online payment options. Another distinguishing thing is that BTC is operated by a decentralized authority, which makes it different from government-issued currencies.
What are the main differences between Bitcoin and XRP?
Obviously, the two digital assets have a few distinctions, and here are some of them:
1. They validate transactions differently.
Ripple utilizes a distributed consensus mechanism instead of the blockchain mining concept. It implies that there are nodes to get the authenticity of a transaction verified. As a result, confirmations are almost instant. XRP is decentralized, more reliable, and much faster than the bigger part of its competitors. It also implies that the consensus system of XRP consumes much less energy compared to BTC, which is known as an energy hog.
2. XRP is cheaper and faster than BTC.
BTC transaction confirmations can take a few minutes and are famous for high transaction costs, which are caused by the intensive and complicated nature of mining. At the same time, XRP transactions tend to be confirmed in a matter of a few seconds, while the costs are low. If you use Letsexchange or any other online service, you will see that XRP transactions are charged with a small processing fee.
3. Ripple has more coins in the market.
Ripple has released approximately one billion coins, while BTC has only 21 million units. It means that Bitcoin`s scarcity is artificial, and it generated investor interest as a means of storing value.
4. Their circulation mechanisms are different.
BTC coins are issued and added to the network only when miners find them. There is no release schedule, and the supply is dependent on the difficulty of the algorithm and network speeds. When it comes to XRP, there is a smart contract to control the process. The company planned to let a maximum of one billion tokens every month, so the circulation makes up more than 50 billion these days. In the case of any unused number of coins, the portion is shifted back to an escrow account. Such a mechanism exists to make sure that there will be no oversupply of XRP digital assets.