Ripple and Ethereum are some of the most popular projects in the blockchain space, and they have the potential to introduce many innovations into the world, even though several differences set the two of them apart. But what exactly are the main discrepancies between the two blockchains? Well, first, the purpose of cryptocurrencies is different. XRP Ledger is a centralized finance product that people can use to transfer their money faster and more efficiently. On the other hand, Ethereum is a blockchain that has introduced various innovations, including dApps, NFTs, smart contracts, and DeFi. However, they share similarities, as the two blockchains have their own cryptocurrencies, which are in the top ten in terms of market capitalization. Plus, as people have become more aware of the advantages of digital coins, it seems like the value of cryptocurrencies will increase in the future if we were to take a look at the Ether and XRP price prediction.
What are the other differences that set the two cryptocurrencies apart? Keep reading to find out.
What is Ripple (XRP)?
Ripple is the name of the company that created XRP, the digital currency that allows people to send money faster and more efficiently. Behind the name, Ripple is an entire ecosystem with many applications, where the XRP Ledger is the blockchain that powers XRP. People have always appreciated XRP, as some consider it to allow better advancements, as it is cheaper and faster than transactions with other cryptocurrencies, including Bitcoin and Ethereum.
Plus, the transactions made with XRP are better if we compare them with the traditional alternatives that can take hours and even days to be processed. Instead, transactions with Ripple will be completed in a matter of seconds without involving many fees in this process.
What is Ethereum?
Ethereum is an important blockchain that powers Ether, which has become the second-largest cryptocurrency by market cap over the years. Ethereum was developed to overcome all the shortcomings of Bitcoin and offer users something better than what the first digital currency provided. Ethereum has taken advantage of Bitcoin’s good features, including its decentralization, which means that a central authority, like a bank or government, does not control the blockchain. However, thanks to this amazing feature, Ethereum has also added something else, including the possibility of supporting a lot of innovations, including DeFi, smart contracts, NFTs, and dApps.
Because of all the features that Ethereum has brought, some say that Ether could be a potential rival to Bitcoin, the largest cryptocurrency by market cap.
What are the similarities between Ether and XRP?
Even though there are discrepancies between the two cryptocurrencies, especially regarding the purpose of their creation, there are similarities that make them share quite the same features. For example, both digital coins are among the top 10 cryptocurrencies regarding market cap and they also support smart contracts.
Ethereum supports smart contracts from its infrastructure, while in the case of XRP Ledger, Ripple Labs has an open-source project specially created for smart contracts called “Codius,” which attaches smart contracts to any type of cryptocurrency.
What are the differences between Ether and XRP?
XRP is more centralized than Ether
There is a lot of debate, and people offer their opinions on whether XRP is centralized or not. If we would only take into account the fact that Ripple has already mined the supply of XRP, then yes, we could say that XRP is centralized. However, the validation of the transaction promises to be decentralized. On the other hand, Ethereum is 100% decentralized, as no one controls the blockchain and digital currency regarding the transaction verification or the supply.
XRP has a limited amount of digital currencies, which is not the case with Ethereum
Ethereum has an unlimited supply of digital coins created with a process called staking, where participants stake a number of their cryptocurrencies and receive some rewards for doing this. In the past, Ethereum worked on a Proof-Of-Work (PoW) consensus mechanism, but it transitioned because this process required a lot of electrical consumption, and it posed problems on the sustainability part.
On the other hand, XRP has a limited supply of 100 billion digital coins that have already been mined and will be released gradually by Ripple Labs. The company has locked up 55 billion XRP in escrow and said it would release 1 billion cryptocurrency monthly. However, this process could take more than 55 months, as Ripple has released less than the mentioned quantity, and also, the unsold digital coins released every month return to the escrow, so we will need to wait longer for the entire amount to be made public.
Ether has grown more than XRP
There are also differences regarding the value of the two digital coins. When first launched in June 2014, XRP coins cost $0.005. Then, they maintained quite the same value until December, when they reached $3.84, the highest value of the digital coin. On the other hand, Ethereum has evolved better as it grew faster, becoming the second-largest digital coin by market cap. Initially, Ethereum had a value of $0.31 per coin in 2015.
But it became a popular cryptocurrency quite soon, and in just two years, its value grew up to $400. In 2018 the value increased even more, reaching $1,558 per digital coin, but the price fell between 2019 and 2020. Then, Ethereum went again on an upward trajectory, reaching $4,733 in November 2021. The price of Ethereum is expected to increase even more in the future because of all the innovations this blockchain has brought.
The bottom line
As you can see, there are many differences between the two digital coins, which is not really a bad thing, as they serve different purposes, and people can choose whatever they need more.
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DISCLAIMER:Cryptocurrency is unregulated in the UK. The UK regulator, the Financial Conduct Authority, has repeatedly warned investors that they risk losing all their money if they buy cryptocurrency, with no possibility of compensation.
