As the father of all cryptocurrency, it’s not surprising that Bitcoin has been the most popular cryptocurrency over the past decade. As of March 2019, Bitcoin still ranks number 1 on coinmarketcap.com and sees over $8, 800, 000, 000 in volume over 24 hours. However, Bitcoin is not the only cryptocurrency that’s on everyone’s radar. Ripple, founded just 3 years after Bitcoin has grown speedily and consistently ranks at number 3 on coinmarketcap.com.
In recent years, cryptocurrency enthusiasts and investors have taken to blogs and forums to ask: will Ripple become the next Bitcoin?
Here’s our take on that question.
Similarities between Bitcoin and Ripple
Before we dive into a comparison between Bitcoin and Ripple, let’s take a look at some general similarities between the two.
To start off, both Ripple and Bitcoin use the blockchain technology to allow users to send and receive funds. This is an important factor to consider when making comparisons between the two because it establishes some similarities in Ripple and Bitcoin’s goals — to allow peer-to-peer transaction to take place at lower costs.
Objectives of Ripple and Bitcoin
With that in mind, we can go about considering how Ripple and Bitcoin work towards achieving their goals. From the onset, Bitcoin worked towards creating a direct payment system through its decentralised system. The blockchain effectively cuts off banks, regulators and third parties, thereby lowering costs to transfer funds.
Read about how Bitcoin works here.
Ripple, on the other hand, tries to achieve its goal by creating a payment system that’s meant to be used by banks to transfer funds domestically and internationally. While Bitcoin tries to cut off banks and middlemen in its network, Ripple seeks to create a system that includes these establishments. Additionally, Ripple is not mineable and it uses a Federated Byzantine Agreement Model instead of Bitcoin’s Proof-of-Work model. If anything, while both Ripple and Bitcoin use blockchain in its network, it’s quite clear that Ripple and Bitcoin both adopt very different approaches to achieving low cost peer-to-peer fund transfers.
Read about how Ripple works here.
One of the biggest problem Bitcoin is facing at the moment is its lack of scalability. You might think that processing 7 transactions per second is pretty fast but Visa processes around 1700 transactions per second — definitely a huge gap. To become more than just an investment asset, Bitcoin needs to improve its scalability.
In contrast to Bitcoin, Ripple is much more scalable, processing around 1500 transactions per second. In this respect, Ripple has an edge over Bitcoin in terms of becoming a successful alternative mode of payment. Additionally, since Ripple’s objectives aims to integrate banks and establishments into its payment network, it’s also less disruptive to the financial world than Bitcoin.
That being said, there has also been new developments with Bitcoin to overcome its problem of scalability. Bitcoin’s new Lightning Network seeks to solve the scalability problem by implementing an off-chain solution which will speed up transactions in the Bitcoin network. Here’s how off-chain transactions work.
Currently, Bitcoin still ranks at number 1 in coinmarketcap.com and Ripple ranks at number 3. Prices of Bitcoin and Ripple are constantly fluctuating, however, Bitcoin’s prices seems to be rising slowly at the moment (March 2019). It’s difficult to tell whether Ripple might over take Bitcoin and hold the number 1 spot in the future, however, it’s not an impossible scenario. While speculation in trading plays a huge role in the prices of Bitcoin and Ripple, real developments in technology can play an important role in boosting investor’s interests.
Read more about cryptocurrency trading and investing here.
Although Bitcoin and Ripple share certain similarities, both are quite different in terms of goals. At the moment, it seems that Ripple has more of an edge over Bitcoin in terms of merging into the mainstream mode of payment. However, it’s important to recognise that decentralisation and an anti-establishment stance are big parts of the crypto-community’s ideals. While Ripple promises lower transaction costs and more scalability than Bitcoin, it deviates from the crypto-community’s raison d’être. Will Ripple be the new Bitcoin? It’s difficult to say. The best way to find out is to keep continue watching the new technological developments of Ripple and Bitcoin.