Bitcoin is the biggest cryptocurrency by market capitalization, and XRP is the 7th largest currently. They are both popular, but different from each other in many ways.
If you’re reading this article, it may be that you wish to know the difference between these two cryptocurrencies. It may also be that you wish to decide on which of the two you should buy as an investment.
We will help you to find the answer to these questions in this guide by comparing the two to reveal their strengths and weaknesses, as well as their unique characteristics. So, let’s get started right away.
What Is Bitcoin (BTC)?
As stated earlier, Bitcoin is the largest crypto network by market capitalization. It was also the first cryptocurrency to be created, making it the most famous even among those who are not into cryptocurrency.
Bitcoin was first created as peer-to-peer electronic cash. It was used for buying and selling directly between the buyer and the seller without the need for an intermediary such as a bank. However as time passed, Bitcoin became slower as more users came on board.
Therefore its use as electronic cash has reduced significantly, since the transactions are slow, and fees are relatively high, depending on how congested the network is at the time of the transaction.
On average, Bitcoin takes 10 minutes to finalize transactions, which is a long time compared to altcoins today. Most people therefore simply buy Bitcoin as an investment and as a hedge against inflation and a store of value.
There are a maximum of 21 million BTC that can be mined. This is a relatively small supply of coins, which makes it an attractive asset for those investing in the long term. Already, close to 20 million BTC have already been mined, and many are lost.
This suggests that there isn’t much to go round as more people are realizing that it is a viable investment that hedges against inflation.
What Is XRP?
XRP is a token used by Ripple to facilitate cross-border payments. Ripple is a payment company that uses blockchain technology to make payments faster and cheaper across borders.
Using XRP as a bridge currency, it is able to send billions in funds instantaneously and at ridiculously low costs. Ripple uses XRP Ledger, which is the blockchain that powers the ecosystem.
The XRP network uses a unique consensus mechanism known as the Ripple Protocol Consensus Algorithm (RPCA), which is a fast system that allows for the fast transactions that settle transactions in seconds.
XRP is a pre-mined token, that is it doesn’t require mining. However, the tokens are held by Ripple and are released based on need. There is a 100 billion XRP maximum supply, but Ripple has currently only released 55 billion into circulation.
The company also has a burn mechanism that systematically reduces the number of XRP in circulation. This is a strategy to increase the unit value of every XRP token in circulation.
Although XRP doesn’t yet have any real use case other than its use for payment settlement, supporters of the token believe that it has a bright future, and that the price will hit $589 eventually, hence the need to hold on to the investment.
Which Is Better?
Both Bitcoin and XRP are great cryptocurrencies in their own rights. However, they are widely different and deciding on which is better depends on what you intend to use the cryptocurrency for.
If your goal is to find an investment asset for the long term, Bitcoin has proven to be a reliable choice in this area. The price has gone up thousands of times, and it has other supporting products such as ETFs.
Although XRP is also a popular investment asset that has made many investors rich as well, it may not have the same reputation as Bitcoin when it comes to investing, but perfect for funds transfers.
