fbpx

ETHEREUM | BITCOIN | RIPPLE

THE LEADERS IN THE CRYPTOCURRENCY MARKET

WHAT IS THE DIFFERENCE BETWEEN ETHEREUM, BITCOIN, AND RIPPLE?

KACIEBUSINESS

In this guide, we are going to look into these three top contenders and see how different they are in functionalities.

 

While bitcoin remains the clear leader among the two currencies in terms of market capitalization and overall adaptation, there is still a great surge in the use of Ethereum and Ripple. Ethereum has been the second cryptocurrency behind Bitcoin, and Ripple currently followed in fourth place. Bitcoin and Ethereum projects are ushered in an era of decentralized applications, while Ripple, on the other hand, is looking to disrupt the way international transactions and banks operate. 

 

Interesting, right? Let us look at these top cryptocurrencies and their functionalities. 

 

BITCOIN

Bitcoin was the first cryptocurrency launched in 2009, in the time of the Global Financial Crisis, by the anonymous founder Satoshi Nakamoto. Bitcoin is a digital asset secured with cryptography and was created to be an alternative to fiat money. 

 

Bitcoin was a new electronic cash system that requires no third party to send and received money. In other words, it is completely decentralized with no server or central authority, such as government control. 

 

With this new technology, owners who own bitcoin in the system are completely anonymous, in the sense that, there are no names, account numbers, or country identification number that links Bitcoin to its owners. This blockchain technology uses encryption keys to connect buyers and sellers without a third-party connection. Therefore, there are no bills to print or coins to mint with this technology. 

 

The aim of bitcoin is to provide lower transaction fees to transfer money using a peer-to-peer system to facilitate instant payments.  It is faster, cheaper, and the most reliable way to transact business compared to the traditional way of doing business through a bank.  

 

Bitcoin is not a physical coin, but it’s a collection of computers or nodes that run its code and store its blockchain. For better understanding, payments are verified by the use of a massive amount of computer power, and balances are kept on an open or public ledger that everyone has access to, along with the bitcoin transaction information, which of course is anonymous. 

 

Despite its non-legal obligation, bitcoin grew very fast in popularity and triggered the launch of many virtual currencies called Altcoins.

 

ETHEREUM

KACIEBUSINESS

Ethereum is a digital currency that is also powered by blockchain technology. It was launched in 2015 by the founder, Vitalik Buterin. 

 

Ethereum was created to run a completely decentralized system with a defined set of rules that protect and give users full control of their personal data and online activities. Usually, users’ data are stored on computers or servers which are owned and managed by large and small organizations or governments, which are oftentimes vulnerable to hackers and the misuse of organizations.

 

Ethereum wanted to address this problem in the act of competing with centralized web-based companies that house data by providing a decentralized solution to do business and free from centralized control.

 

Ethereum’s aim was to create an ecosystem that allows developers to build real-world applications on top of its blockchain by the use of Smart Contracts.

 

A “smart contract” is simply a piece of computer code that is running on the Ethereum blockchain containing a set of rules under which the participants of the contract agree to interact with each other without the need of a middle man or a third party. The smart contract acts as a blueprint for a decentralized application (DApp). ERC-20 Tokens are smart contract projects that are built on the Ethereum blockchain as DApp.

Decentralized applications secure and protect users from hackers, theft, and manipulation of data.  

 

Due to the positive impact of its application, Ethereum is the cryptocurrency of choice for companies and projects raising funds in the ICO market. Ethereum, Ether token is also very fast to transact online payments.  


RIPPLE

KACIEBUSINESS

XRP is a coin used for representing the transfer of value across the Ripple Network. It is a digital currency built for payments. Ripple was released in 2012 and co-founded by Chris Larsen and Jed McCaleb. Ripple is an open-source and peer-to-peer decentralized platform that transfers money between different currencies in seconds. It is a payment settling, currency exchange, and a real-time remittance system intended for banks and payment networks. It is cheaper, transparent, and a secure alternative to the SWIFT payment system used by banks. Ripple doesn’t use blockchain but uses a distributed consensus ledger using a network of validating servers.

 

Generally, the existing system uses US dollars as a common currency to convert between other currencies. This incurs high currency fees and takes time to process, so bank transfer between accounts in different countries takes 3-5 days to process. Using XRP to convert the value, rather than USD, exchange fees are eliminated and processing of payments is reduced to seconds. Ripple network is the most effective and the fastest way to transfer value across countries. 


DIFFERENCES

Now that you understand the functionalities of each coin, let us look at their differences. 

CRYPTOCURRENCY
BITCOIN
ETHEREUM
RIPPLE
Founder

Bitcoin core code was designed, written, and deployed by the anonymous Satoshi Nakamoto in 2009, and it’s the first digital currency.

Ethereum was developed by Vitalik Buterin, a programmer from Toronto, and was released in 2015.

Ripple was founded by a company, Ripple Lab, and launched in 2012 by co-founders Chris Larsen and Jed McCaleb.

Description & Algorithm

Bitcoin uses blockchain technology to store and record transactions to operate a peer-to-peer payment system, with hashing algorithm SHA-256.

Ethereum uses a distributed computing platform and operating system featuring smart contract functionality. The hashing algorithm used is Ethash.

Ripple uses a payment protocol consensus algorithm to help banks conduct fast global financial settlements.

Purpose

Bitcoin was developed as an alternative to traditional money with the aim of paying for goods & services.

Developed to be a decentralized supercomputer to power DApps from around the world. Ether is also used for transaction fees and services on the Ether Network. 

Ripple serves as the middleman for all global foreign exchange or cross-border transactions cheaper and faster

Maximum Amount

21 Million

18 Million per year

100 Billion

Earn From Mining

Yes. And users can also pay miners to prioritize their transactions. Further, bitcoin fees are charged based on the size of the transaction.

Yes. Whenever you send an Ethereum, transfer tokens, interact with smart contracts, you pay a fee in GAS, even if the transaction is unsuccessful.

Ripple requires a minimum transaction cost to avoid overloading the network. To pay the fees, the network destroys the XRP rather than paying it to anyone in particular, which in turn increases the value of the remaining XRP.

Transaction Speed

Each transaction takes 10 minutes.

Ethereum dilvers a transaction speed in two minutes.

Ripple settles transactions in 5 seconds.

 

 

As indicated in the table above, all three currencies have a different purpose of bringing value to the market. Bitcoin wants to replace fiat money and remove the middleman with a peer-to-peer system. Ethereum is competing with data companies and aims to give users more control over their personal data by allowing developers to create DApps on Smart Contracts. Ripple wants to be the middleman for the banking system in cross-border transactions. 

 

However, when it comes to transaction speed and fees, Ripple takes the bag for the most competitive digital currency to succeed in the real world with increasing adaption.  

 

Even though Ethereum is second in line with regards to speed, fees, and trade volume, Ethereum is not looking to be an alternative to Bitcoin. They both have the same and different missions. 

 

Although the adaption of SegWit has improved bitcoin both fees and speeds, the high usage of bitcoin is creating a lengthier speed and fee environment. 

TOP 10 POTENTIALLY PROFITABLE CRYPTO-TOKENS FOR 2020/2021
GO HERE
OPEN A CRYPTOCURRENCY WALLET
GO HERE
CRYPTOCURRENCY TRADING COURSES
GO HERE
Previous
Next
4.5/5

Ivan on Tech Academy is the world’s best Crypto & Blockchain learning platform for newbies, entrepreneurs, and investors. Ivan On Tech Academy was launched in 2017 by Ivan Liljeqvist and Filip Martinsson in Stockholm, Sweden. Ivan and Filip studied computer science together at KTH Royal Institute of Technology. Thereafter, their passion for programming, blockchain, and cryptocurrency led them to start Ivan On Tech Academy. 

 

Today Ivan On Tech Academy is the leading Online university for blockchain, cryptocurrencies, and programming. The platform has trained and educated over 20,000 students and has created top courses for students to become top professionals for the job market. Their courses range from introductory courses on Blockchain, Bitcoin, and programing to Smart Contract Programming, Bitcoin, and Blockchain Business Masterclass. They provide hundreds of assignments, quizzes, on-demand video courses, homework, and programming challenges.  As a student, you will have access to the following;

 

  • Graduation Certification 
  • Individual Support & Coaching 
  • Instant access to monthly releases of new courses 
  • Access to the student community 
  • Monthly Livestream Webinars 

 

However, to gain access to all courses, you’ll have to get a premium or professional plan. Their basic plan is good for complete beginners, but to get real insights into the space or to gain opportunities when it comes to employment or business-ventures the upgrade is way better. 

 

Visit the Academy and learn more. 

Leave a Reply

Your email address will not be published. Required fields are marked *

KACIEBUSINESS

Kacie Social is for members around the world to connect, network, and build. It is a social platform like any other. You can follow and unfollow a member of interest, share information, create groups, send private messages, get notifications, and much more. Check out Kacie Social Features here and become a member.

COMMUNICATION

Share information with members and get notifications when a member post. 

NETWORK

Stay connected with members of interest by following their profile. 

MESSAGES

You can send and receive private messages from members of the community.

Receive the latest news, videos and posts

Subscribe To Our Newsletter

KACIEBUSINESS is an educational platform and does not offer any personal financial advice or advocate the purchase or sale of any security or investment for any specific individual. Members should be aware that investment markets have inherent risks, and past performance does not assure future results. KACIEBUSINESS has advertising relationships with some of the offers listed on this website. KACIEBUSINESS does attempt to take a reasonable and good faith approach to maintaining objectivity towards providing referrals that are in the best interest of readers.  KACIEBUSINESS strives to keep its information accurate and up to date. The information on KACIEBUSINESS could be different from what you find when visiting a third-party website. All products are presented without warranty. 

Copyright © 2020 kaciebusiness.com  All rights reserved.