The Difference Between Bitcoin & Ripple
Bitcoin is still considered to be the king of cryptocurrencies. But there are several rivals pretending for the throne and one of them is Ripple.
Ripple Network v XRP
The first thing we should know is that Ripple itself isn’t a digital currency as Bitcoin or Ethereum are. It is actually a payment system, created for faster, more transparent and secure alternative used by banks, for example the SWIFT payment system.
The actual cryptocurrency XRP is a token used on the Ripple network to facilitate transfers of money between different currencies. The settlement systems, that exist generally use US dollars as a common currency for convertation.
Exchange fees are eliminated and processing of payments is reduced to seconds by first converting the value of the transfer into XRP, rather than USD.
Banks including Fidor Bank, Santander, the Commonwealth Bank of Australia and a consortium of 61 Japanese banks have all said that they are trialling or implementing applications utilizing the Ripple Network payment system.
How Does XRP Differ From Bitcoin?
XRP is the name of the token representing transfer of value across the Ripple Network. Through the process of mining there are alredy created 55 billion XRP- ripples.
One billion coins are made available to the cryptocurrency trading markets every month, through a smart contract system. This mimics the regulated increase in the supply of Bitcoin without necessitating the vast usage of energy caused by Bitcoin mining.
You should know, that technically Ripple doesn’t even use Blockchain technology, on which Bitcoin and other cryptocurrencies are based.
Along with the fact, that Ripple tokens were all created by the Ripple Network, rather than being mined by anyone with the CPU power—means that it is not a decentralized system.
It is probably this centralized, controlled aspect of Ripple’s nature that has led to it’s widespread acceptance by global banking organizations, whereas Bitcoin and other truly decentralized systems are more commonly considered to be threats to their existing models of business.
Where Can I Spend Ripples/ XRP?
The answer is not- you can’t. Ripple was never designed to be a currency or a payment method. The one thing it is used for is transferring other currencies over the Ripple network. Each time a money (or asset) transferring organization such as a bank uses the network to conduct a transfer and settlement, the cost is deducted in a small amount of XRP. This is what gives XRP themselves their value.