Bitcoin vs. Ripple: An Overview
From the outside, the cryptocurrency investing universe seems limited to bitcoin. As the most well-known cryptocurrency, bitcoin is the leader in market capitalization and overall traction with investors.
But there are several other options for those interested in diversifying their portfolio and experimenting with coins that offer a different take on the concept of digital currencies. Ripple’s XRP is one of them. In May 2022, the cryptocurrency ranked sixth in terms of total market capitalization. Let’s take a closer look at what distinguishes XRP from Bitcoin and other top digital tokens.
Key Takeaways
- Ripple is the company that is behind XRP, the cryptocurrency.
- Bitcoin transaction confirmations may take many minutes with high transaction costs, while XRP transactions are confirmed in seconds with little cost.
- XRP is a technology that is mainly known for its digital payment network and protocol.
- Many major banks use the XRP payment system.
Bitcoin
Bitcoin operates on a public blockchain ledger that supports a digital currency used to facilitate payments for goods and services. The bitcoin network is based on the blockchain concept, a public ledger of verified transactions and record keeping.
Miners verify transactions on an ongoing basis and add them to the Bitcoin blockchain. In exchange for their time and the computing power necessary to validate the ledger in this way, miners are rewarded with BTC upon successfully validating transactions.
Ripple
XRP is the native cryptocurrency for products developed by Ripple Labs. Its products are used for payment settlement, asset exchange, and remittance systems that work more like SWIFT, a service for international money and security transfers used by a network of banks and financial intermediaries. XRP is pre-mined and uses a less complicated method of mining as compared to Bitcoin.
In news reports, XRP and Ripple are often used interchangeably. Both are actually different. Ripple is the name of the company and network behind the XRP cryptocurrency.
The company was founded as a peer-to-peer trust network that leveraged social media. Users within a network could bypass banks and make loans and open credit lines with each other. But the network failed to take off.
In 2012, three years after Bitcoin ushered in the cryptocurrency era, Ripple changed tracks and became OpenCoin—a network for money transfers where large businesses and financial services firms acted as counterparties to transactions.
XRP, its cryptocurrency, was launched in the same year with 80 billion tokens going to the company and 20 billion to its co-founders. The purpose of XRP was to serve as an intermediate mechanism of exchange between two currencies or networks. OpenCoin became Ripple Labs in September 2013.
Ripple describes itself as a global payments network and counts major banks and financial services amongst its customers. XRP is used in its products to facilitate quick conversion between different currencies.
Key Differences
The main differences between Bitcoin and XRP are as follows:
Both Have Different Methods to Validate Transactions
Instead of using the blockchain mining concept, the Ripple network uses a unique distributed consensus mechanism to validate transactions in which participating nodes verify the authenticity of a transaction by conducting a poll. This enables almost instant confirmations without a central authority.
The result is that XRP remains decentralized and is faster and more reliable than many of its competitors. It also means that the XRP consensus system consumes negligible amounts of energy as compared to Bitcoin, which is considered an energy hog.
XRP Is Cheaper and Faster than Bitcoin
Due to the complicated and intensive nature of mining used in the cryptocurrency, Bitcoin transaction confirmations may take many minutes and are associated with high transaction costs. XRP transactions are confirmed within seconds and generally occur at very low costs.
Similar to the bitcoin transaction processing fee, XRP transactions are charged. Each time a transaction is performed on the Ripple network, a small amount of XRP is charged to the user (individual or organization).
XRP Has More Coins in the Market
One billion XRP were pre-mined at launch and have been released gradually into the market by its main investors. In contrast, Bitcoin’s supply is capped at 21 million, meaning there will only ever be 21 million Bitcoin in existence. BTC’s artificial scarcity has helped generate investor interest in its potential as a store of value.
XRP and Bitcoin Have Different Circulation Mechanisms
Bitcoins are released and added to the network as and when miners find them. They do not adhere to a release schedule and their supply depends mostly on network speeds and difficulty of the algorithm used to mine coins.
A smart contract controls the release of XRP. Ripple planned to release a maximum of 1 billion XRP tokens each month as governed by an in-built smart contract; the current circulation is 55 billion.
Any unused portion of the XRP in a particular month will be shifted back to anescrowaccount. This mechanism ensures that there will be no possibility of misuse due to an oversupply of XRP cryptocoins, and it will take many years before all the cryptocoins will be available.
Overall, XRP is better for lower processing times and lower transaction charges than bitcoin.
Bitcoin vs. Ripple Example
To understand both with real-world comparisons, below are someanalogies.
Peter, living in America, visits Walmart and pays for his purchases in US dollars. He can also use his US dollars to purchase other currencies for trading and investment, like GBP or JPY, and sell them off at a later date for a profit or loss.
Bitcoin is an equivalent digital currency—an alternative to real-world US dollars, for example. Peter can make a purchase and pay for it in bitcoins, or he can purchasebitcoins for trading and investments and sell them off at a later date for profit or loss, just like trading any other fiat currency like the GBP or JPY.
If Peter in America wants to send $100 to Paul in Italy, he can do so by instructing his American bank to execute the transaction. After taking necessary charges, Peter’s American bank will issueinstructions using the present-day SWIFT system that will credit Paul’s Italian bank account with the equivalent euros (or USD). This process may involve high charges at both ends and takes a certainnumber of days for processing.
Enter Ripple, the payment and settlement system that also has a currency, the XRP.
Ripple’s payment system uses XRP tokens for the transfer of assets on the Ripple network. The same $100 can be converted instantly by Peter to equivalent XRP tokens, which can be instantly transferred to Paul’s account over the Ripple network.
Upon suitable verification and authentication of the transaction by the decentralized Ripple network, Paul will receive the XRP tokens. He will have the option to convert it back to USD's or any other currency of his choice, or even retain it as XRP tokens. The verification process is faster than those of bitcoin and traditional money transfer systems.
The Bottom Line
While Ripple works in a bit more complicated way, the above example explains its basic workings. The Ripple system scores better than the bitcoin network for its lower processing times and lower transaction charges. On the other hand, BTC is generally more widespread and better known than XRP, giving it the advantage in other ways.
Bitcoin remains a truly public system that is not owned by any single individual, authority, or government. The Ripple network, although decentralized, is owned and operated by a private company with the same name. Despite both having their unique cryptocurrency tokens, the two popular virtual systemscaterto different uses.
Investing in cryptocurrencies and other Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or other ICOs. Since each individual's situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein.
FAQs
Transaction Details
XRP transactions are both cheaper and faster than Bitcoin transactions. Since Bitcoin requires computers to solve complex cryptography problems, it can be time-consuming. On the other hand, XRP transactions take just seconds to process and confirm.
Is Bitcoin better than Ripple? ›
Transaction Details
XRP transactions are both cheaper and faster than Bitcoin transactions. Since Bitcoin requires computers to solve complex cryptography problems, it can be time-consuming. On the other hand, XRP transactions take just seconds to process and confirm.
Is Ripple and Bitcoin the same? ›
Key Takeaways. Ripple is the company that is behind XRP, the cryptocurrency. Bitcoin transaction confirmations may take many minutes with high transaction costs, while XRP transactions are confirmed in seconds with little cost. XRP is a technology that is mainly known for its digital payment network and protocol.
Is Ripple still good to invest in? ›
A ruling in the SEC's lawsuit against Ripple Labs, the company behind the XRP cryptocurrency, could come in mid-2023. If the court rules in Ripple's favor, XRP's value could skyrocket. However, a ruling against it could send XRP to zero. Given the nature of the risk involved, long-term investors should avoid XRP.
Is Ripple coin worth investing? ›
If you're looking for a low-cost way to begin investing in cryptocurrency, XRP might be a good option due to its growth potential. Be prepared for the coin to dip or spike sharply based on the final SEC court judgement.
Can Ripple reach 100 dollars? ›
To reach $100, XRP must climb 270 times. At $100, the market capitalization of XRP would be $5.1 trillion. If XRP rose at a 25% annual pace, it would take at least 26 years to hit $100.
Does Ripple still have a future? ›
A scant handful of experts predict that XRP can reach $10 in the near future — if ever. If the bear market reverses, XRP could follow the trend of bitcoin and begin to rise again. According to Trading Education, experts agree that $10 or even $25 is achievable for Ripple.
Will Ripple ever be as big as Bitcoin? ›
A lot of people made a lot of money out of Bitcoin. Most of them invested in the early stages many years ago and sold recently near the top. Industry experts are predicting the next big thing may not be Bitcoin but Ripple.
Can XRP reach $500? ›
To reach $500, XRP's market cap will be worth $25.9 trillion, which would be higher than the GDP of America today. It would be incredibly impractical for XRP to reach this level.
How risky is Ripple? ›
Plus, the current price is a low barrier of entry for crypto newcomers, as well as a good opportunity for established investors to diversify their portfolio without taking a large amount of value out of other assets. Put simply, Ripple (XRP) is a low-risk investment with lots of potential rewards.
XRP could reach 1000 by 2034 if it were to DOUBLE in price every year. XRP will never reach $1000 unless there is an extensive burn program.
What if I invest $100 in Ripple? ›
This means that investing $100 in Ripple (XRP) today could see you with more than 140% returns in the short term, 300% in the medium term, and 390% in the long term.
What will $100 of Bitcoin be worth in 2030? ›
The research report put together by Ark Invest sees Bitcoin hitting price targets in 2030 of $258,500 in the bearish forecast, $682,000 in the average market and $1.48 million in a bullish market.
How much your $100 investment in Ripple will be worth if XRP reaches $1? ›
At this rate, you will have 262.05 XRP tokens. When it reaches $1 in value, your $100 investment will be worth $262, an approximately 262% return on investment (ROI).
Why is Ripple so cheap? ›
XRP is a cryptocurrency that runs on the Ripple network. The main reason behind its low price is that the US security and Exchange Commission (SEC) is suing Ripple for $1.3 billion.
What are the cons of Ripple crypto? ›
Disadvantages of Ripple
-It is not easy to track XRP's value as investors are not aware of when its large quantities could be issued into circurlation. -It is less decentralised compared to other cryptocurrencies because it keeps a default list of transaction validators.
Do banks use Ripple? ›
RippleNet Members
Ripple collaborates with financial institutions worldwide; more than 100 financial institutions have joined RippleNet, including: Santander (USA) Canadian Imperial Bank of Commerce (Canada)
How much Ripple can I buy for $1000? ›
US Dollar to XRP
| $ US Dollar | XRP |
|---|
| 100.00 | 233.67 |
| 250.00 | 584.18 |
| 500.00 | 1,168.36 |
| 1,000.00 | 2,336.72 |
4 more rowsThe Ripple XRP coin price is expected to hit the following milestones according to our XRP price prediction forecast. End of 2023: Recovering from its SEC issues in 2023, Ripple XRP is expected to shine and hit a high of $0.75.
What's the best crypto to buy now? ›
Summary: Top 10 cryptos compared
| Price (USD) | Market cap (USD) |
|---|
| Ethereum (ETH) | $2,720.62500 | $327,359,821,810.50 |
| BNB (BNB) | $468.63000 | $73,976,076,178.50 |
| XRP (XRP) | $0.63736 | $33,061,927,572.00 |
| Cardano (ADA) | $0.54946 | $19,223,661,265.50 |
6 more rowsMay 1, 2023
According to Ripple Coin News, the price of Ripple might reach $30 in ten years. Smartereum is even more positive, predicting that Ripple will hit $250 to $300 in the next ten years.
Which crypto will explode in 2023? ›
With this in mind, this market insight speculates on the next cryptocurrency to explode in 2023, in addition to some upcoming projects for investors to consider.
...
1. AiDoge (AI) – Next Meme Crypto to Explode in 2023.
| Presale Started | 26 April 2023 |
|---|
| Chain | Ethereum |
| Hard Cap | $14,900,000 |
| Min Investment | None |
| Max Investment | None |
1 more rowMay 5, 2023
Analysts, traders, and investors are constantly looking for the next big thing. While Bitcoin is far from fading, other cryptocurrencies may emerge to replace it as the standard for digital financial transfers.
Can Ripple reach $10,000 dollars? ›
Will XRP reach $10,000? In theory, it could reach a value of $10,000 in 216 years (keeping in mind the past track record of 10.13x growth in one month). However, this method is not the only factor to consider and it is not practical either.
Why is Ripple better than Ethereum? ›
Ripple and Ethereum serve very different purposes, with Ripple primarily targeting banks and major companies that require fast money transfer services, whereas Ethereum serves as both a platform for decentralized applications and as a huge smart contract base.
What will $100 XRP be worth in 2030? ›
XRP (XRP) Price Predictions 2023 - 2031
| Year | Minimum Price | Average Price |
|---|
| 2027 | $2.20 | $2.33 |
| 2028 | $2.62 | $2.75 |
| 2029 | $3.04 | $3.17 |
| 2030 | $3.47 | $3.59 |
5 more rowsXRP Price Summaries
XRP's price today is US$0.4257, with a 24-hour trading volume of $411.54 M. XRP is +0.27% in the last 24 hours. It is currently -7.20% from its 7-day all-time high of $0.4587, and 3.38% from its 7-day all-time low of $0.4117. XRP has a circulating supply of 51.84 B XRP and a max supply of 100 B XRP.
What is the highest price XRP reached? ›
The current price is $0.43 per XRP. XRP is 88.88% below the all time high of $3.84. The current circulating supply is 51,837,820,505 XRP.
Why is Ripple banned in US? ›
The SEC accuses Ripple, CEO Brad Garlinghouse and co-founder Chris Larsen of breaching U.S. securities laws by selling XRP without first registering it with the regulator. Ripple contests the SEC's allegations, maintaining the view that XRP should be considered a digital currency rather than a security.
Why are people not buying XRP? ›
Most exchanges that list XRP are not allowed to operate in the United States. In addition, the cryptocurrency exchanges permitted in the U.S. do not list XRP in response to an investigation by the Securities and Exchange Commission (SEC). So, if you're in the US, we think it's already clear why you can't buy XRP.
In 2020, the U.S. Securities and Exchange Commission initiated a lawsuit against Ripple alleging the company and its executives illegally sold XRP, a cryptocurrency its founders created in 2012, to investors without first registering it as a security.
How much will XRP be worth if they win? ›
Notably, if XRP prevails in the case, the panel of financial experts in Finder's January 2023 report anticipates that the price of XRP would trade at $3.81 by the end of 2025. Nevertheless, if the SEC wins in court, it will instead reach $0.98.
Will XRP hit $300? ›
Ripple Coin News predicts that Ripple could hit $30 in the next 10 years. Andreas Kaplan, in his article written for Smarterem, says that “most people within the business agree that Ripple's value can go up to the $200-$300 range in ten years.”.
Will Shiba Inu ever reach $1 cent? ›
With the current circulating supply, Shiba Inu is unlikely to reach 1 cent any time soon. The overall market cap of Shiba Inu has been fluctuating around $6 billion for the last couple of weeks.
Can you cash out Ripple? ›
Once your Ripple is deposited, you can navigate to the exchange's trading page and select “sell” for XRP. Then, enter the amount of XRP that you want to sell and your chosen selling price in USD or another supported currency.
Can you sell Ripple for cash? ›
If you want to sell XRP for cash (e.g. USD or EUR), you'll need to send us identification and proof-of-residence documents. You can learn more about our different verification levels here. Start selling XRP! Once your account is funded, you can sell XRP and other cryptocurrencies.
Can you make money off Ripple? ›
Although long term investments in Ripple can be very profitable, using one of the many trading strategies available for XRP can yield significantly more over the same period of time as investing.
How much will Bitcoin be in 10 years? ›
Answer: Bitcoin could be worth between $800,000 and $1 million in 10 years based on analysts' predictions. The $1 million price target is anticipated in 2030.
How much will 1 Bitcoin be worth in 5 years? ›
Bitcoin (BTC) Overview
Bullish Bitcoin (BTC) price predictions range between $120,825.22 and $228,225.42 by 2030. Market analysts believe BTC could reach $93,975.17 by 2025.
How much is 1 Bitcoin worth in 10 years? ›
Within the cryptocurrency community, the consensus is that Bitcoin values will continue to rise in the near future and that one BTC coin will most likely be worth between $800,000 and $1 million in ten years.
Can Ripple (XRP) Hit $100 or $1000? It is unlikely for Ripple to hit $100, according to TU analysts. And it's even more unlikely for the token to reach $1,000. This is because for XRP to reach $1,000 per coin, its market cap would have to reach at least $100 trillion, which we're very unlikely to see any time soon.
How high could Bitcoin go? ›
And, post this mini-bull run, there are several discussions running around that the world's largest digital coin, BTC, could even witness a level of $10 lakh by the year 2025.
How to buy XRP in usa? ›
You can buy XRP with fiat currency on a number of different crypto exchanges. Here are a few exchanges where you can exchange U.S. dollars for XRP: Bitstamp. Bitfinex.
...
If you're looking to buy and trade XRP with Tether, here are a few exchanges that pair USDT with XRP:
If Ripple loses the case, the SEC could levy fines on a large number of crypto projects. For Ripple, a loss could negatively impact the project and its executives and open the door to a stricter industry environment. U.S. Securities and Exchange Commission.
What's special about Ripple? ›
Ripple (XRP) offers a powerful payment settlement system and currency exchange with lightning-fast transaction speeds and low transaction fees. Its innovative approach to financial transactions makes it a unique and attractive option in the ever-evolving world of cryptocurrency.
Can Ripple hit $500? ›
Businesses with these kinds of prices have to be highly monopolistic and given cross-country regulations on money transfers, such market shares are likely to be highly unsustainable. In short, all these scenarios look unrealistic and far-fetched. Therefore, we would say XRP is unlikely to reach $500.
Is Ripple the best cryptocurrency? ›
Ripple is a money transfer network designed to serve the needs of the financial services industry. XRP is the native cryptocurrency on the Ripple network, and it consistently lists among the top 10 cryptocurrencies by market capitalization.
Can Ripple reach $1000 dollars? ›
If you're wanting to get an in-depth overview of the XRP and its future, you're at the right place. This article reviews this coin's prospects and what it holds in the future for the crypto market and investors. Plus, we've answered the question, "Can XRP reach $1000?" Overall, this is unlikely in the coming years.
How high can XRP realistically go? ›
The XRP price can reach a maximum level of $1.27 with the average price of $1.14 throughout 2026. By the end of 2023, the XRP price is forecasted to be on average $0.5129.
What could Ripple be worth in 10 years? ›
Ripple Coin News predicts that Ripple could hit $30 in the next 10 years. Andreas Kaplan, in his article written for Smarterem, says that “most people within the business agree that Ripple's value can go up to the $200-$300 range in ten years.”.
Ripple and Ethereum serve very different purposes, with Ripple primarily targeting banks and major companies that require fast money transfer services, whereas Ethereum serves as both a platform for decentralized applications and as a huge smart contract base.
Will XRP go up if they win lawsuit? ›
Notably, if XRP prevails in the case, the panel of financial experts in Finder's January 2023 report anticipates that the price of XRP would trade at $3.81 by the end of 2025. Nevertheless, if the SEC wins in court, it will instead reach $0.98.
Will Ripple ever reach $5? ›
Depending on where the legal chips fall, it is absolutely possible that XRP's price could skyrocket to $5 or more in 2023. At the same time, a harsher verdict could also send the token far below its current price of $0.36 per token.
