Looking to invest in cryptocurrency but not sure which one is right for you? ethereum vs ripple are two of the most popular options, but which one is better? Read on to find out which crypto is better.
Overview
Looking at the current state of both Ripple and Ethereum, it’s hard to say which one is better positioned for success in 2023. Both have strong communities and active development teams.
However, Ripple has the advantage of being backed by major financial institutions, while Ethereum has the advantage of being the first major smart contract platform. In this article, we will analyze the pros and cons of these two points to find the right cryptocurrency for beginners.
What is Ripple (XRP)?
Ripple is a network for real-time gross settlement, currency exchange, and remittances developed by the US-based technology company Ripple Labs Inc.
The 2012-released Ripple platform enables tokens representing fiat currency, cryptocurrencies, commodities, or other value types like frequent flier miles or mobile minutes.
Ripple is a cryptocurrency that is used by financial institutions, as well as banks, to make transactions.
The thing that makes Ripple unique is that it can be used to make instant transactions. This is because the network uses a consensus algorithm. This means that all of the nodes in the network agree on the transaction.
What is Ethereum (ETH)?
Ethereum is a blockchain-based decentralized global software platform at its heart. It is most commonly known for its native cryptocurrency, ether, or ETH.
May use Ethereum to develop any secure digital technology. The users may also use it to pay for tasks done on the blockchain.
Scalable, programmable, secure, and decentralized are all features of Ethereum.
Ethereum’s smart contract functionality has led to the development of a new type of dapp, called a decentralized exchange.
Advantages vs. Disadvantages
Ripple
| Pros | Cons |
|
|
Ethereum
| Pros | Cons |
|
|
What Do They Have in Common?
There are a few things that make Ripple unique compared to other cryptocurrencies. One of the most notable is that Ripple was created by a company with the same name. This means that Ripple isn’t just a decentralized currency but also a company with a lot of resources and experience in the financial sector.
Ripple also has one of the largest market caps of any cryptocurrency. It’s currently the third largest cryptocurrency with a market cap of over $13 billion.
Ripple is also unique because it uses a different consensus algorithm than most cryptocurrencies. Instead of proof-of-work or proof-of-stake, Ripple uses a consensus algorithm called Federated Byzantine Agreement. This algorithm is designed to be more efficient and secure than other algorithms.
Finally, Ripple is unique because it’s designed to be used by banks and other financial institutions. Many banks have already partnered with Ripple and are using its technology.
Ripple Ledger Vs Ethereum: What Are The Differences Between 2 Networks?
XRH and ETH each have certain characteristics .So, which of the two is better? Let’s compare them and find out.
Mechanism
Ripple Ledger
Ripple’s ledger is based on a federated consensus model which uses an iterative voting process to validate transactions and update the network ledger.
In the Ripple network, there are validators that vote on the correctness of the transactions. The consensus protocol ensures that incorrect transactions are rejected by the network and that the ledger is updated accordingly.
Ethereum
Ethereum, on the other hand, uses a proof-of-work (PoW) consensus algorithm. In PoW, miners compete to solve complex mathematical problems in order to validate transactions and add them to the blockchain.
The first miner to solve the problem is rewarded with a certain amount of ether. Ethereum plans to eventually move to a proof-of-stake (PoS) consensus algorithm, which is more energy-efficient than PoW.
Programming language
The programming language of Ripple and Ethereum is JavaScript.
Technology
Ripple Ledger
- RippleNet uses an unusual form of blockchain technology, which approves transactions using what it calls a ‘consensus’ or ‘distributed agreement’ protocol. This essentially asks the network of gateways to agree upon an order for transactions, with it simply taking the majority view.
- Ripple Labs claims that this system has a number of advantages over other systems. It is, for example, less energy intensive than the ‘proof-of-work’ algorithms used by bitcoin and ether, while it also enables more than one participant to add transactions to each block.
- However, this is only possible because Ripple Labs approves the gateways, which has led critics to claim that it is not really a decentralized cryptocurrency.
Ethereum
- Ether uses a ‘proof-of-work’ algorithm to approve transactions, which means that computers in the Ethereum network compete to validate pending transactions.
- This system works because these cryptographic signatures (known as hashes) are very difficult to generate, but easy for other machines in the network to verify.
- The difficulty of generating them is adjusted so that only one complete block is generated every 15 seconds or so across the whole network. This method can be quite energy consuming even if it is incredibly secure and completely decentralized.
Decentralization
Ripple and Ethereum are both decentralized platforms that allow for the creation of decentralized applications (dapps). However, there are some key differences between the two:
- Ripple is a payment network that uses a distributed ledger to settle transactions. It is designed to be fast, efficient, and scalable. Ripple does not have its own cryptocurrency and instead uses a variety of fiat currencies, commodities, and other assets.
- Ethereum is a decentralized platform that runs smart contracts. These contracts can be used to create dapps. Ethereum has its own cryptocurrency, Ether, which is used to pay for transaction fees and to power the network.
- Ethereum is more decentralized than Ripple. Ripple is controlled by a central authority, while Ethereum is not. This makes Ethereum a better option for companies that want to be in control of their own transactions.
Downtimes
Ripple doesn’t have any downtime, but Ethereum has had some downtime in the past. Ethereum, on the other hand, has had some major issues in the past.
For example, in 2016 there was a major hack on the DAO, which resulted in the loss of over $50 million worth of ETH. Ethereum also had a hard fork in order to fix the issue, which caused a lot of controversy in the community.
Transaction cost (Gas fees)
The average transaction fee for Ethereum is about $0.16, while for Ripple, it is only $0.0047. This makes Ripple a better option for companies that need to make a lot of transactions.
Transaction speed
Ripple has a faster transaction speed than Ethereum. On average, it takes 4 seconds for a transaction to be processed on Ripple, while on Ethereum, it takes about 10 minutes. This makes Ripple a better option for companies that need to make a lot of transactions.
Network size
Generally speaking, Ripple has a much smaller network than Ethereum. This is because Ripple is designed specifically for financial institutions and has a relatively small number of users compared to Ethereum.
However, Ethereum does have a larger number of developers working on its platform and a larger community of users.
Scalability
Ripple Ledger
Ripple’s network has been designed to handle 1,500 transactions per second. However, the developers have claimed that it can scale up to 50,000 transactions per second.
Ethereum
On the other hand, Ethereum’s network can only handle 15 transactions per second. This is due to the fact that it uses a Proof-of-Work (PoW) consensus algorithm. PoW is very energy-intensive and it takes a lot of time to validate transactions.
However, Ethereum is working on a new consensus algorithm called Proof-of-Stake (PoS) which is expected to improve the scalability of the network.
Market cap
| NAME | Ripple Ledger | Ethereum |
| Volume 24h | $391,259,177 | $8,811,584,029 |
| Price | $0.3291 | $1,551.38 |
| Total Supply | 99,989,318,921 XRP | 122,230,714 ETH |
| Market Cap | $16,330,870,542 | $189,596,878,824 |
DeFi ecosystem
The DeFi ecosystem of Ripple Ledger is much smaller than Ethereum’s. In the past two years, Ethereum has been the most popular platform for DeFi applications.
The total value locked in Ethereum-based DeFi protocols has reached $13 billion, compared to only $1 billion in Ripple.
Ethereum has a first-mover advantage in the DeFi space. Ethereum also has a large community of users and developers. These factors have helped Ethereum build a strong ecosystem of DeFi protocols.
Ripple, on the other hand, is a newer platform. It was only launched in 2012. Ripple is also a permissioned blockchain, which means that it is not as decentralized as Ethereum. These factors have limited the growth of the DeFi ecosystem on Ripple.
NFTs
Ethereum is the most popular blockchain platform for NFTs and has become the industry standard. It offers a wide range of NFT-related features, including storage, management, issuance, and trading.
Ripple’s blockchain ledger also supports NFTs. However, it is not as widely used as Ethereum and has a more limited range of features. Ripple’s NFT features include storage, management, and issuance. It does not currently support trading.
At a Glance
| Ripple | Ethereum | |
| Consensus Mechanism | FBA | PoW |
| Transactions p/s | 1,500 | 15 |
| Market Value | 18 Bil | 44 Bil |
| Circulating Supply | 40 Bil | 100 Mil |
| Launch Date | 2012 | July 2015 |
| Team/Organisation | Ripple Labs | Ethereum
Foundation |
| Transaction Fees | <$0.01 | <$1 |
Potential Projects
Both Ripple and Ethereum have potential projects for investors to invest in.
On Ripple
Potential projects on the Ripple Ledger can be divided into three main categories:
- RippleNet: RippleNet is a network that connects banks and financial institutions using the solution provided by Ripple. Includes: xCurrent, xRapid & xVia. The trend of cross-border payments has a significant development trend. However, the current payment infrastructure is facing problems such as high transaction fees, long transfer times, and difficulty in monitoring. Therefore, Ripple created the RippleNet payment network to solve those problems.
- xCurrent: A payment solution with near-instant speed. It allows members of the RippleNet network to track cross-border transactions. xCurrent is built on top of a Ripple-developed protocol called Interledger (ITL)*, not XRP Ledger.
- xRapid: On-Demand Liquidity (ODL) solution for banks using XRP as an intermediary between various fiat currencies.
- xVia: xVia is an API-based standardized interface. It allows financial institutions and businesses to make payments through other members of the RippleNet network.
On Ethereum
There are a variety of projects that can be done on Ethereum. Here are some examples:
- Infinite Axie: As one of the most popular NFT games and a profitable coin, Axie Infinity is popular on the NFT market. Axie Infinity is a prominent Ethereum NFT project that enables participants to engage in a trading battle game in which they can train and cultivate Axies.
- Decentraland: Decentraland is an entirely three-dimensional online virtual realm. Since its introduction in 2020, the platform, which is based on the Ethereum blockchain, has made significant progress. The platform enables gamers to purchase land parcels with its native cryptocurrency token, MANA. Players can purchase land and explore Decentraland, and they have complete power over the platform using smart contracts.
- The Sandbox: The Sandbox is an additional well-known NFT project that is primarily recognized for its blockchain-based virtual environment and video game. It is a community-driven virtual metaverse game that enables the monetization of assets and gameplay on the blockchain network.
Ripple vs Ethereum: Which Is a Better Investment?
They are both different projects with different purposes. Ripple is more focused on banking and financial institutions while Ethereum is more focused on decentralized applications and smart contracts.
It really depends on what you are looking for in an investment. If you are looking for stability and a long-term investment, then Ripple may be a better choice. If you are looking for more speculative growth, then Ethereum may be a better choice.
Where to buy XRP and ETH?
The best place to buy XRP and ETH will vary depending on your location, payment method, and other factors. However, some popular exchanges that offer XRP and ETH include Coinbase, Binance, and Kraken.
FAQs about ethereum vs ripple.
Which one should I choose?
There is no clear winner when it comes to Ripple vs Ethereum. Both projects have their own strengths and weaknesses. Ripple is faster and more scalable than Ethereum, but Ethereum has a more active development community and a wider range of applications. Ultimately, the decision of which one to choose depends on your own preferences and needs.
Is Ripple more secure than Ethereum?
Ripple is more secure than Ethereum because it uses a different consensus mechanism called Federated Byzantine Agreement. This allows for faster and more secure transactions.
Which is more advanced?
In terms of technology, Ripple is more advanced than Ethereum. Ripple uses a unique consensus algorithm that allows for faster transaction times and lower costs. Ethereum uses a Proof of Work algorithm which is less efficient.
Is Ripple and Ethereum killer?
Ripple is not an Ethereum killer. While Ripple and Ethereum are both blockchain platforms, they have different purposes. Ripple is designed to be a payment system for banks and financial institutions, while Ethereum is a decentralized platform that runs smart contracts.
Will Ripple be as big as Ethereum?
This is difficult to predict, as both Ripple and Ethereum are constantly evolving and growing. It is possible that Ripple could become as big as Ethereum, but it is also possible that the two will remain different sizes.
Is Ripple or Ethereum more popular?
There is no definitive answer to this question as it largely depends on individual preferences. However, Ethereum appears to be more popular among cryptocurrency users and investors.
What are Ethereum Rollups?
Ethereum rollups are a type of scalability solution for the Ethereum blockchain. They work by aggregating multiple transactions into a single “compressed” transaction, which reduces the amount of data that needs to be stored on the blockchain. This can potentially increase the scalability of Ethereum-based applications by orders of magnitude.
Conclusion
There are many different cryptocurrencies on the market, and it can be difficult to decide which one is the best investment. However, when it comes to Ripple and Ethereum, there are some clear differences. Ripple is focused on providing a global payment system, while Ethereum is focused on developing smart contracts and decentralized applications. In terms of development, Ripple is further along than Ethereum. Ripple also has more experience working with banks and financial institutions. However, Ethereum has a larger community and more developers working on it. When it comes to price, Ripple is currently cheaper than Ethereum. Overall, Ripple appears to be the better investment in 2023.
