Differences between Ripple, Bitcoin and Ethereum
XRP's main difference from Bitcoin and Ethereum stems from its user focus, consensus process and market dynamics. While all three cryptocurrencies have a lot of similarities in basic features like privacy and transparency, they differ in other key areas.
Satoshi Nakamoto created Bitcoin as a decentralized medium of exchange and store of value for everyday users. Ethereum is designed to power smart contracts that enable the creation of decentralized applications (dApps) that cut across finance (DeFi), supply chain, asset management, gaming (GameFi), governance (DAOs), etc.
XRP, on the other hand, is tailored to serve as a cross-border payment solution for businesses and financial institutions but could also facilitate peer-to-peer transactions.
Another key difference is the process through which Bitcoin and XRP validate transactions. While Bitcoin leverages the energy-intensive Proof-of-Work (PoW) consensus mechanism and Ethereum uses Proof-of-Stake (PoS) to validate transactions, XRP functions via a social governance consensus process that requires network nodes to maintain a trusted list of validators that reaches consensus on the correct state of the ledger/blockchain.
Unlike Bitcoin and Ethereum, validators don't receive rewards in newly minted coins as all XRP tokens were pre-mined during the creation of the cryptocurrency.
XRP's consensus process made it more scalable and cheaper in processing transactions than Bitcoin and Ethereum. XRP can theoretically process 1,000 transactions per second (TPS), with each transaction costing only 0.00001 XRP. Bitcoin and Ethereum can only process roughly 7 and 20-30 TPS, respectively, with transaction fees occasionally crossing $100 during heightened network activity.
Other areas of difference include:
🪷The XRP Ledger and Ethereum's ability to host tokenized funds like stablecoins and utility tokens while Bitcoin can't.
🪷XRP's huge supply of 100 billion XRP against Ethereum's average supply of 120 million – maintained by a burn mechanism – and Bitcoin's deflationary design of a 21 million BTC supply cap and a halving mechanism to reduce its emission rate.
🪷XRP has strong ties to the company Ripple, as demonstrated by its significant underperformance after the SEC sued the latter. Bitcoin and Ethereum, on the other hand, have no strong ties to a single company.
$BTC
$ETH
$XRP
Satoshi Nakamoto created Bitcoin as a decentralized medium of exchange and store of value for everyday users. Ethereum is designed to power smart contracts that enable the creation of decentralized applications (dApps) that cut across finance (DeFi), supply chain, asset management, gaming (GameFi), governance (DAOs), etc.
XRP, on the other hand, is tailored to serve as a cross-border payment solution for businesses and financial institutions but could also facilitate peer-to-peer transactions.
Another key difference is the process through which Bitcoin and XRP validate transactions. While Bitcoin leverages the energy-intensive Proof-of-Work (PoW) consensus mechanism and Ethereum uses Proof-of-Stake (PoS) to validate transactions, XRP functions via a social governance consensus process that requires network nodes to maintain a trusted list of validators that reaches consensus on the correct state of the ledger/blockchain.
Unlike Bitcoin and Ethereum, validators don't receive rewards in newly minted coins as all XRP tokens were pre-mined during the creation of the cryptocurrency.
XRP's consensus process made it more scalable and cheaper in processing transactions than Bitcoin and Ethereum. XRP can theoretically process 1,000 transactions per second (TPS), with each transaction costing only 0.00001 XRP. Bitcoin and Ethereum can only process roughly 7 and 20-30 TPS, respectively, with transaction fees occasionally crossing $100 during heightened network activity.
Other areas of difference include:
🪷The XRP Ledger and Ethereum's ability to host tokenized funds like stablecoins and utility tokens while Bitcoin can't.
🪷XRP's huge supply of 100 billion XRP against Ethereum's average supply of 120 million – maintained by a burn mechanism – and Bitcoin's deflationary design of a 21 million BTC supply cap and a halving mechanism to reduce its emission rate.
🪷XRP has strong ties to the company Ripple, as demonstrated by its significant underperformance after the SEC sued the latter. Bitcoin and Ethereum, on the other hand, have no strong ties to a single company.
$BTC
$ETH
$XRP
Disclaimer: Includes third-party opinions. No financial advice. May include sponsored content. See T&Cs.
ETC
18.59
+0.21%
