According to a recent post by cryptocurrency researcher SMQKE, Bitcoin and Ethereum still do not meet the practical demands of global payment systems. Their limited scalability and high transaction costs make them unsuitable for organizations requiring quick and efficient financial payments.
Bitcoin and Ethereum currently have the capacity to handle fewer than 20 transactions per second. This issue may prevent most financial institutions from adopting blockchain to process high volumes of transactions. Meanwhile, today's financial systems need to handle over a hundred thousand transactions in a second.
Furthermore, the use of proof-of-work technology means that their transactions take longer and consume more energy. All these issues mean that they cannot integrate with payment networks that demand better speed, reliability, and environmental protection.
A study from 2022 supported by SMQKE again highlights this issue. It was found that Bitcoin and Ethereum are technically not ready to ensure scalable and compliant transactions. The price volatility and fluctuations of these assets make them less attractive to institutional investors.
In contrast, the XRP Ledger provides a framework designed for enterprise-level transactions. It uses a consensus protocol called the Federated Byzantine Agreement, allowing transactions to be completed almost instantly in about 3 to 4 seconds. The system can handle up to 1,500 transactions per second at a cost of less than $0.001.
The high speed and low cost make XRP more suitable for banks and payment service providers. Both Bank of America and Standard Chartered have tested XRP technology for quick and efficient setup for their large-scale banking needs.
Similarly, XRP's low energy usage aligns with the new sustainability rules being implemented in finance worldwide. The blockchain solutions offered can be adhered to by major enterprises and are government-approved.
In summary, XRP is one step ahead in becoming the preferred blockchain for transactions worldwide. Its established technical standards in terms of schedule, scale, and compliance with regulations give it an advantage over Bitcoin and Ethereum.