Ripple vs Bitcoin: The Leaders of Cryptocurrency Capitalization

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If an expert would be asked something like: - “How do they define the rating of the most popular cryptocurrencies”, he or she would probably answer: - “According to their market capitalization”. A sensation in this indicator has appeared after the end of 2017. An out-of-the-way coin called Ripple took the second place, which was occupied by Ethereum cryptocurrency during a long period. In 2017, its price has grown 40 times, as well as the investments in it. In spite of this, the discussion on the fact whether Ripple is a cryptocurrency or not, continues until now. To answer this question properly, we will compare Ripple with the most famous and expensive coin – Bitcoin.

Bitcoin – the golden standard of the cryptocurrency market

Bitcoin’s history became classic in the cryptocurrency world. The coin originated in 2008 when someone nicknamed Satoshi Nakamoto has published a manifest on its launch on the Internet. Of course, there was no real Japanese. Most likely, a group of anonymous American developers used this fictitious name. However, a beautiful legend for the first cryptocurrency in the world was ready.

Bitcoin is based on the blockchain technology. Most modern cryptocurrencies use it. The technology’s main idea is that each transaction in the network must be approved by 6 independent nods. All operations are registered according to the ledger principle. This feature makes it available to track the history of each coin from the moment when it was mined.

Blockchain guarantees full decentralization of the system. That is why the users like Bitcoin. It is a convenient means of international transactions that makes bank or governmental control impossible. This fact caused broad critics calling Bitcoin a means of financial fraud, tax evasion, and crime financing. Of course, some of these facts may take place. However, most of the token’s users don’t have any fraudulent intents. They are inspired by an idea of Internet payments simplification and the creation of a finance system that would be independent from governmental regulation.

Ripple – a cryptocurrency not for everyone

Ripple originated in 2012 as a part of an innovational payment system that had the same name. The system worked since 2004 and was aimed at attracting corporate clients. Its developers wanted to attract large banks and international payment systems providing them an ability to complete the fastest and the cheapest transactions. The cost of any transfer (including cross-border transfers) in the Ripple system is only 0.0001 XRP. The token has a number of other particular features in addition to the above-mentioned.

• The commission payment “burns” right after the transaction is completed. That is how the developers made their cryptocurrency become more expensive with the flow of time. The idea is simple: the more transactions – the less coins; the less coins – the higher the ripple price.
• Ripple utilizes a system of gateways instead of blockchain. They are located around the globe. This feature allows to increase the speed of transactions. An average transaction in the Ripple system lasts from 1 to 3 seconds. This is much faster than in Bitcoin. The users of the most famous cryptocurrency often have to wait for a couple of hours to complete a transaction.
• Unlike Bitcoin, Ripple is centralized. Banks and the owners of this payment system can track all transactions. That makes anonymous use impossible. Such policy is a result of the company’s orientation on large financial market players that consider control over transactions the most important security indicator.