While Bitcoin makes noise and dominates the headlines, Ripple is more of a wallflower. Although XRP is the fourth cryptocurrency in market cap terms (over $29 billion as of the end of 2017), it tends to remain in the shadows compared to its big brother.
Ripple can be difficult to understand mainly because it differs from most cryptocurrencies, including Bitcoin and Ethereum. In what way? Read on to discover.
What is Ripple?
Ripple is both a virtual currency (labelled as XRP) and a digital payment network, within which the currency circulates. The network itself is known as RippleNet. It connects banks and payment providers, allowing them to transfer money internationally and in real-time using the power of blockchain. All transactions are submitted to the decentralised XRP Ledger. According to the official website, Ripple enables ‘an internet for money, or value web.’
Who’s behind Ripple?
The Ripple Transaction Protocol (RTXP) was released in 2012 by OpenCoin, a San Francisco-based company. It was later renamed as Ripple Labs, Inc. (2013), which was finally rebranded as Ripple (2015).
Ripple began in 2004, Ryan Fugger came up with the first version of the system – RipplePay. Fugger’s concept was then taken to the next level by Chris Larsen and Jed McCaleb, the cofounders of OpenCoin, Inc. The system became faster and more energy-efficient in comparison to Bitcoin. Since 2012, Ripple Protocol has been expanding into the banking sector.
What are the competitive advantages?
The Ripple payment network is designed to enable the smooth transfer of any currency, be it traditional (or fiat) ones, such as dollars or pounds, or cryptocurrencies, such as bitcoins and litecoins. The XRP currency settles transactions between two parties when direct exchange is impossible.
Moreover, Ripple is considered Bitcoin's rival in that it provides faster transaction settlements. In the Ripple network, there is no waiting for block confirmations, that increase the time required to fully settle a transaction. While Bitcoin takes from 10 minutes to 1+ hours to clear a money transfer, Ripple can handle it within 4 seconds on average.
What’s the difference between Ripple and Bitcoin?
One difference is in speed, which is already mentioned above.
Both Ripple and Bitcoin are peer-to-peer open source payment systems, secured with cryptography. However, Ripple can be considered as a complement to Bitcoin as it can be used as a bridge currency.
Additionally, Bitcoin handles approximately 15 transactions per second (TPS), whereas the Ripple ledger can settle over 1500 TPS.
How to mine Ripple?
Ripple is not mined. The total supply of 100 billion XRP was created when the system was launched in 2012. Whenever a new transaction is confirmed, a small portion of Ripple’s coin stock is destroyed. As the cryptocurrency cannot be mined, it can only be bought from various exchanges Bitfinex, Bittrex, Kraken, and Poloniex, as well as via cryptocurrency exchange services, such as Changelly, and the GateHub wallet.