Ripple is quite different from Bitcoin. Bitcoin is trying to eliminate the need for a governing body to complete a transaction. Whereas Ripple is trying to reduce the time required to complete bank transactions. In true sense Ripple is adapting the blockchain technology for a different purpose.
Knowing the core features of Ripple is not enough. It is a better idea to compare Ripple with the first and pure cryptocurrency- Bitcoin- to get a better understanding.
Breaking a Myth
What is Ripple?
Ripple uses the blockchain technology but isn’t a cryptocurrency in the true sense. Furthermore, Ripple has exercised its influence over Bitstamp gateway to freeze an account holding 1Million XRP. This account was held by Jed McCaleb, the Founder of Ripple. It was a complete mess when they got into a legal fight.
But now its all settled. Ripple has grown since Jed left his position. And Jed has gone to found another blockchain based currency-Stellar-a fork of Ripple.
Bitcoin vs Altcoin
Ripple Compared With Bitcoin
Bitcoin and Ripple are fundamentally different. The core structure of Ripple has definitely adopted a new use of the Blockchain technology. Where bitcoin has introduced a new form of Currency which is based on a Decentralized ledger, Ripple facilitates the banking transactions by reducing the time required to complete transfers of fiat currencies.
Ripple is backed by different established institutions like -Google Ventures, Standard Chartered, Santander Inventures and many more. Google Ventures bought equity into the firm heavily last year.
Then, the number of Bitcoins that will ever be in existence is finite-21Million. On the other hand, Ripple is pre-mined. There are 1Billion Ripples, 60 Billion of it is held by Ripple Lab.
Bitcoin flow in the market depends on miners. Miners deploy hashing power to mine bitcoins and also validate transactions. Bitcoin mining gets harder and harder as we get closer to the 21 Million limit. This establishes a balance in the market. Bitcoin tries to keep the number of blocks hashed constant-one for every ten minutes. The more difficult the mining is getting, means more mining power is now deployed for mining. In fact from September 2017 to February 2018 the difficulty has tripled.
On the other hand, Ripple has opened a cryptographically secure escrow account of 55 Billion. Ripple has set a limit to the number of Ripple that will flow into the market. The limit is 1 Billion every month. This means Ripple will sell 1 Billion XRP to the market every month. But, since mid-2016, on average 300 Million, XRP has been sold on the market monthly.
Ethereum Beats Ripple
Ripple was doing very good until it did not. Ripple doesn’t use a decentralized ledger. Coinbase announced it would include ripple in its services until it declined to do so. Soon after this event, came the news of multiple South Korean exchanges being removed from the Coinmarketcap website. One of the exchanges was, Bithumb which was the second largest exchange in terms of trading volume. It triggered a rapid drop in Ripples’ Market Cap(20Billion).
As of today 29th January 2018 Stellar-fork of Ripple– was ranked 6th on the Coinmarketcap chart. Ripple holds the third spot in terms of Market Cap, leaving Stellar behind by roughly $40Billion. Only time will tell if Jed McCaleb can build the company that he always wanted to.