Cardano and XRP are two of the top ten cryptocurrencies by market capitalization. They are both altcoins, i.e cryptocurrencies other than Bitcoin.
However, they are fundamentally different in design, function, and use. Cardano is a proof-of-stake project while XRP is an entirely different set up. If you have been trying to compare the two, you have come to the right place.
In this guide, we will help you to identify the difference between the two cryptocurrencies and also help you to decide on which one is the best for you. Whatever your reason for asking, you’ll receive clarity by the time you’re done reading, so let’s get started.
What Is Cardano (ADA)?
Cardano is a proof-of-stake (PoS) blockchain network used to build smart contracts and decentralized applications. The network is similar to Etherum, which is the foremost network for decentralized applications, but is much more scalable.
Because of its scalability, the network can process transactions much faster and at a much lower cost than Ethereum. The fees are therefore also lower, which makes developers and general users flock to Cardano.
One unique thing about Cardano is the team’s focus on academic approach to development of the network. Every developmental proposal on Cardano must be thoroughly screened and peer-reviewed before it is implemented.
This way, the founder Charles Hoskinson believes the network will be built sustainably, albeit slowly. Hoskinson believes that Cardano will flip Bitcoin as the top cryptocurrency in the future.
The network has a native token known as ADA. This token is used to run Cardano, since it is used to pay for fees and also for staking, a process through which validators stake their tokens to secure the network.
ADA is also used as the token to incentivize or reward those who stake to protect the network. It is also the governance token. Those who hold ADA have a right to vote on new development proposals that shape the future of the network.
ADA has a circulating supply of 35 billion tokens and a total supply of 37 billion tokens. However, the maximum supply can be up to 45 billion pre-mined tokens.
What Is Ripple (XRP)?
Ripple is a blockchain payment company that uses XRP as its native token. The company uses XRP Ledger (XRPL) as the blockchain to facilitate cross-border payments at a high speed and low cost.
XRP is used as a bridge currency and to provide liquidity that is needed to facilitate the transactions across borders. Ripple’s technology has brought a huge improvement to the payment industry, making it much easier to transfer funds.
The network uses a consensus mechanism known as the Ripple Protocol Consensus Algorithm (RPCA). This mechanism is what makes the network extremely scalable and also less expensive than both proof-of-work (PoW) and PoS networks.
There are 55 billion XRP in circulation, with a total supply of 99 billion tokens and a maximum supply of 100 billion tokens. Though the tokens are all pre-mined, they are held by Ripple and slowly released into circulation.
Apart from serving as the bridge currency for Rpple’s payment network, XRP is also a popular investment asset. Its supporters popularly known as the XRP Army believe that the price could hit $589 in the future, hence the need to hold it until then.
Which Is Better?
Both Cardano and XRP have fast networks you can use to send funds across the globe. However, Ripple is more appropriate if the goal is to send large funds across borders, especially between corporate organizations.
When it comes to investing, ADA may be the better choice considering the fact that it has a smaller number of tokens compared to XRP. generally, the fewer the tokens, the more valuable they become.
It is therefore better to invest in ADA than to invest in XRP, as the latter also has fewer use cases which limits its utility.
