As an outsider onlooker, cryptocurrency seems like vast and an impossible field for exploring. In fact, the first question I usually get from my friends and family is about what the difference is between Bitcoin and any of the other coins they keep hearing about. And that’s an incredible question worth answering. I mean, really, they all seem the same, and they all can be used for similar end goals, is it just the fundamentals in one of them being valued higher than the other?
Especially for non-tech-savvy, it’s difficult to grasp the key principles of cryptocurrencies because they really are unlike anything we have had before. One can say they are currencies by having the “currency” suffix following it, yet they behave differently from any centralized currency we have now. One can also suggest they are an emerging technology, but the majority don’t follow any of the classic norms we see. The differences get even more drastic within themselves.
Let’s start with Ripple… or is it XRP? Well, Ripple is the parent company; XRP is its currency. Ripple started as P2P network where users could bypass banks for making loans and credit line. Seeing the success of Bitcoin billionaire, in 2012, Ripple founders developed XRP, which is one of the biggest cryptos as it stands. XRP was designed with very different ideas in mind. Firstly, Ripple is contracted, and XRP is now used by several central banks listed on Ripple’s official website.
Bitcoin, on the other hand, was made as sort of pet project by mainly one person: Satoshi Nakamoto. Turns out that was just an alias, though, and nobody can confirm who Satoshi is even today. You read that right, nobody can verify who the creator of Bitcoin is, yet Bitcoin is the crypto giant. It wasn’t made to be the giant it has become, but it was instead an attempt at creating an efficient concept that lots of people had tried but failed before him: Cryptocurrencies!
The first point-of-difference – usage-wise – comes from the fact that XRP is pre-mined. There’s some set amount of it on the market, and that’s all you get, at least until more is released. There’s another large amount of it held by Ripple and its founders, which has led to some debate about whether XRP is truly decentralized. Bitcoin requires active mining by users and verifies its transactions through this mining process as well, notably using PoW, PoS, and PoET concepts.
Also, Ripple’s transactions are faster and suffer from lower costs and fees. This is just due to the basic nature of active mining vs. pre-mined. Plus, there were about one billion XRP mined upon release, whereas there will only ever be 21 million Bitcoin, and we have already mined 19 million of it. As we reach Bitcoin’s limit, mining will become even harder, but XRP can be mined at the same pace as the first. There are already more than 50 billion XRP in the market.
At the end of the day, there are arguments for either side, and while this answer may seem complicated, there’s really nothing else I can say about it: the better one is just dependent on your personal preferences and ideals. XRP is lot faster and more technologically advanced than Bitcoin, and it has seen widespread formal financial adoption. Bitcoin is an underdog story, is the first and also by far the biggest crypto on the market. Bitcoin’s systems and technologies are becoming archaic, while XRP is easily future-proof. Bitcoin is truly decentralized, while XRP is debatable at best. So while, in some cases, XRP is seemingly better than Bitcoin, we must remember that both serve different purposes.
See what I mean? The conclusion truly depends on the individual. Just one disclaimer before I end this article: this isn’t financial advice and is an article discussing the pros and cons of two of the biggest cryptocurrencies out right now.