The question: is ripple better than ethereum may not have a definite answer because the two digital currencies are different and because of these differences, some may consider ripple to be better while others may say ethereum is better. The idea behind ripple is completely different from that of ethereum.
What’s the Difference Between Ethereum and Ripple?
Ethereum was created to rival financial institutions by creating a decentralized network where people from all works of life can trade and do business. This is to say that ethereum is a decentralized community based on providing a solution to problems. Ethereum is like a forum where investors can create projects and also have to agree before a change can be made in the system.
Ripple, on the other hand, was not created to rival financial institutions. Rather it was built in a way that it can help financial institutions to facilitate transactions. Ripple is not decentralized like Ethereum. It has a centralized system that requires a consensus to effect changes.
The digital market is gaining dominance, and soon the physical, financial institutions may find themselves becoming obsolete. It is common knowledge that banks will not collaborate with digital coins like Ethereum anytime soon, but a coin like ripple can be considered because of its centralized nature. The question: is ripple better than ethereum can be looked at from different angles. If the banks are willing to accept it and collaborate with it, then it is safe to say that ripple is better than ethereum in the aspects of acceptability. But because of the restrictions and its centralized nature unlike Ethereum, many investors have said that it should not even be considered as a cryptocurrency at all. Having this at the back of your mind you might conclude that ripple is not better than ethereum.
In conclusion, it is safe to say that the question has no definite answer but is dependent on what you want because the idea behind the two currencies is completely different.
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Ripple’s Biggest Competitor Isn’t Ethereum — It’s This
The Motley Fool
Ripple’s network is fast and cheap, but so is this directly competitive cryptocurrency.
Ripple makes a splash
Last year, Ripple surged higher by more than 35,500%, making it easily one of the top performers among all cryptocurrencies. Its run higher has been directly correlated to the company forging a number of partnerships for its XRP token and/or its blockchain — the digital ledger underpinning most cryptocurrencies that’s responsible for logging all transactions without the need for a bank.
Ripple got its big break in mid-November when it was announced that it had partnered with American Express (NYSE:AXP) and Banco Santander in a real-world cross-border payment test. Under the terms of this test, American Express users making non-card payments with AmEx FX International to U.K. Santander accounts will have those payments processed over Ripple’s blockchain and settled almost instantly. Ripple, which focuses solely on financial institutions, has suggested that its average processing time is around four seconds. Compared to the wait of up to five business days that can occur under the current banking system, Ripple offers financial institutions a game-changing solution with its blockchain.
Similarly, its token is proving useful in luring potential enterprise customers. In January, Ripple announced a partnership with money-transfer service MoneyGram International (NASDAQ:MGI) that would test its XRP token within the xRapid platform, which helps financial institutions that have on-demand remittance needs. In effect, MoneyGram could pilot the use of XRP as an intermediary currency when moving funds across borders. For example, sending money between the U.S. and Mexico could be seamless and occur within seconds if those funds were converted from dollars to XRP, and then from XRP into pesos. If successful, MoneyGram may soon have a major competitive advantage.
In total, Ripple has landed five brand-name partnerships, and it is regularly expanding bank access to its RippleNet system.
Beware the mighty Ethereum, right?
With over 1,600 investable cryptocurrencies, competition abounds, even for a niche-focused virtual currency like Ripple. Quite a few folks would probably surmise that Ethereum is the biggest threat to Ripple’s success — and a strong case can be made for such an idea.
Ethereum’s blockchain technology is currently being tested by 200 global organizations via the Enterprise Ethereum Alliance in a variety of industries, including banking. If there is solace for Ripple, it’s that Ethereum’s blockchain hits on currency and noncurrency aspects, so it doesn’t have that same laser focus on financial institutions that Ripple has.
However, Ethereum brings countless partnerships, proven scalability, and smart contracts to the table. Smart contracts are protocols that aid in the verification, facilitation, and enforcement of a contract. Think of them as the customizable aspect of a digital and legally binding contract. These smart contracts are a big reason the Ethereum network is so popular.
But, what if I told you that Ethereum isn’t actually the greatest threat to Ripple? Instead, that title should rightly go to Stellar.
Introducing Stellar, the most direct competitor to Ripple
In their early days, Stellar and Ripple were a lot alike, namely because Jed McCaleb helped found both cryptocurrencies. Today, however, there are marked differences, even though Stellar occupies a similar niche in targeting financial services, as does Ripple.
Stellar’s biggest break came in October when IBM (NYSE:IBM) announced that it had partnered with Stellar and KlickEx in the South Pacific region to expedite payment processing in the cross-border setting. Using IBM’s blockchain and Stellar’s Lumens token (the XLM), IBM aimed to speed up validation and settlement times at 12 regional banks. While we’ve witnessed numerous blockchain partnerships in the financial services space, we’ve seen very few willing to use the native cryptocurrencies, as IBM chose to do with Stellar’s Lumens.
Both Stellar and Ripple bring exceptionally fast and inexpensive transaction processing to the table. Ripple’s transactions cost just a fraction of a penny and can be settled within seconds, while Stellar claims an average settlement time of two to five seconds, with 100,000 transactions costing just $0.01. Comparably, transactions on Ethereum’s blockchain take longer and cost much more.
The Stellar Development Foundation is also run as a nonprofit that aims to resolve the lack of access people all around the globe have to banking. In addition to securing digital identities, blockchain technology offers the ability for the underbanked population to exchange virtual currency without traditional bank accounts. Comparably, Ripple is a for-profit organization that’s primarily focused on securing deals with large financial institutions. That’s not to say Stellar isn’t focusing on what it can do for big businesses, so much as to point out the variances between their nonprofit and for-profit approaches.
Where Stellar could really stand out and give Ripple a run for its money (pun intended) is in regard to its decentralization. Though it’s somewhat argumentative, Ripple’s network is considered to be far more centralized than Stellar, even though the Stellar Development Foundation also controls a majority of Lumens. As noted by the website Invest in Blockchain, Ripple faced backlash in 2015 when founder McCaleb left the company and his funds were frozen. This drew attention to the fact that Ripple’s controlling members could put the kibosh on anything they didn’t like, which is the opposite of the decentralization that’s at the heart of crypto use. Stellar hasn’t faced nearly the same backlash from the crypto community.
While it’s really anyone’s guess which virtual token will fare better — the XRP or XLM — Ripple investors had better keep a close eye on Stellar.
Ethereum vs Ripple (XRP): Which Cryptocurrency Will Beat Bitcoin First?
Ethereum vs Ripple…this may seem like a lightweight cryptocurrency encounter when compared to Bitcoin, but one day one of these digital solutions may exceed the value of the pioneer. But how do the two systems compare, and which one is better placed to achieve this?
While Bitcoin is still worth far more than Ethereum, the second largest cryptocurrency has at least closed the gap somewhat. Ripple is valued at a mere fraction of either Bitcoin or Ethereum, but is considered to have upside potential due to the nature of the system and the ties it has already made.
One of the key aspects in the Ethereum vs Ripple comparison is the way that the two cryptocurrencies market themselves. Ethereum is considered rather similar to Bitcoin, effectively a digital token intended as a unit of exchange. While Ripple has marketed itself as a useful mechanism in cross-border transactions in particular.
It is notable that the banking industry has got on board with Ripple perhaps more than any other blockchain product. This is because the financial sector wishes to apply rules to the blockchain that achieve cost-efficiencies and improve profits through the effective deployment of technology. This is partly why there has been such hostility towards Bitcoin, which is essentially a libertarian response to the centralized nature of the banking system.
By contrast, Ripple has been criticized by advocates of cryptocurrency for being decentralized, which it is asserted goes against the very ethos of the cryptocurrency revolution. This possibly could be a disadvantage in achieving the sort of breakout value that has already been applied to both Bitcoin and Ethereum. But it will be an advantage in terms of attracting the mainstream financial hierarchy.
This could be a big factor in the Ethereum vs Ripple battle, particularly in a climate in which cryptocurrencies are being demonized by the authorities. Several countries have already passed legislation which is hostile towards the market-leading Bitcoin and other cryptocurrencies, while there has been all manner of negative talk on Bitcoin from both the financial sector and legislators.
Any Ethereum vs Ripple comparison must be informed by key aspects of the two cryptocurrencies, and it is firstly worthwhile to assess the scalability of these two solutions. Scalability refers to the number of transactions that can be completed by the blockchains associated with these cryptocurrencies in a specified time period, which is usually one second.
Ripple has a massive advantage over both Ethereum and Bitcoin in this area, and this is one way that the cryptocurrency has established itself as a particularly credible solution. Ripple is able to deliver a phenomenal 1,500 transactions every second, which is, incredibly, 100 times that of Ethereum. When one looks at this figure, it becomes easy to understand why the mainstream financial system is more enthusiastic about the potential of the Ripple blockchain.
Ethereum vs Ripple will also be defined by the speed of transactions delivered by the two systems, and it is hardly surprising that Ripple wipes the floor with the opposition here as well. While Bitcoin is a very cluttered system by now, Ripple impresses with the speed of transactions delivered, and its processing is far faster than that of Ethereum.
While one can expect a transaction to take around two minutes on at the Ethereum blockchain, Ripple is able to deliver a transaction every four seconds. Again, this is an area in which none of the major cryptocurrencies can seriously compete with Ripple, and it is another indication of how the technology could be adopted by the mainstream financial architecture in one foreseeable future.
Certainly the banking and financial industry has made its opinion on the Ethereum vs Ripple comparison clear. Ripple has been far more embraced by mainstream organisations and institutions, with many believing that the Ripple concept can deliver something quite unique and valuable to mainstream financial organisations.
However, despite this fact, Ripple cannot really be considered to be part of the mainstream at present. Both Bitcoin and Ethereum are trading at prices massively in excess of the Ripple stock option, and this is unlikely to change in the foreseeable future. Ripple has indeed made a ripple in the cryptocurrency sector, but the big two players still dwarf the value of this new entry to the market, and Ripple has some way to go before it can be ranked alongside Bitcoin and Ethereum.
While all of the big performing cryptocurrencies have receded in value recently, there is still some debate over the direction of the market going forward. Some believe that this is a temporary correction that will soon be righted, as the likes of Bitcoin continue their ascent to unknown and unheralded highs. But many are sceptical about the solidity of cryptocurrency systems, and believe that legislative hostility will ultimately dampen down what has been the investment story of the century.
Technical differences should also be taken into consideration in the Ethereum vs Ripple comparison, with the former able to deal with a wide range of complicated interactions between multiple parties. CNBC has noted that it provides numerous potential uses, such as reconciliation, enabling smart contracts to be distributed on the Ethereum network. Ripple is a much simpler entity intended to deal with relatively simple transactions, but to deliver them at a speed that is unknown within the rest of the cryptocurrency world.
Indeed, the distributed platform that Ripple provides has already received a great deal of praise. Ripple enables currency transfers to take place almost instantaneously in a wide variety of different platforms, which has been one of the primary reasons for the excitement surrounding the Ripple product. Ripple offers significant control over the system, and while this is attractive to the banking sector, it has also led to cryptocurrency purists criticizing the digital monetary solution.
The Ethereum vs Ripple battle is set to continue for years to come, but the smart money would be on Bitcoin retaining its dominant market position.