Bitcoin is the dominant cryptocurrency today, no doubt, but there is a runner-up lurking behind.
The Ripple. Both have similar characteristics such as utilizing cryptocurrency for secured transactions but there is a huge difference in some major aspects. The Ripple have no public blockchain.
In terms of anonymity, both have divergent characteristics. Ripple similary operates in a network of nodes for transaction validation. However, these are not anonymous P2P nodes. These are participating banks and financial entities. One important note to consider is that there is no mining of Ripple’s coins, it is simply issued.
Also, Ripple is not just an application on top but it is the name of the company as well. The company is responsible for the protocol used in its operation. The founders behind this company are real and even applied and granted operation by New York Bit License.
The fundamentals behind Ripple is that it aimed to create an innovation to the aging methods of transactions in the financial world. It was developed as an asset transfer system. Having primary features of sending instantaneous and security-assured transactions. It caters all digital value that can be transacted such as fiat currencies, cryptocurrencies, commodities, reward and mobile points. The original Ripple cryptocurrency was later added.
The growth of Ripple can be attributed to its angel investors: Andreessen Horowitz, Pantera Capital, Google Ventures, IDG Capital Partners and Santander InnoVentures.
At present, Ripple might be considered as a threat to Bitcoin in terms of ranking but the comparison is a waste of time. Feature-wise, both are distinct. Ripple operates in the same way with our current financial institutions – centralized. It can be considered as an independent platform, that if used strategically, might even complement the Bitcoin and other emerging cryptocurrencies.
The questionable background of Bitcoin made Ripple more attractive among banks, financial institutions, big and small investors who are seeking digital payment solutions.
One important feature that Ripple boasts upon is its instant payment system. Ripple payments are received around the globe in a matter of seconds. It literally innovates the process of money transactions and settlements that would take up to 2-3 days.
Another feature is the Business-to-business paradigm that allows interested players to engage. These players include banks and other financial solutions providers. The Ripple network mitigate the risks through its architecture design. It diligently observed bank and privacy requirements, Anti-money Laundering (AML) and Know Your Customer (KYC) protocols.
Ripple boasts it capability to conduct complete end-to-end payment service. Ripple network can be utilized by banks to process cross-border transactions. It can process the entire transaction including the foreign exchange conversion. The transaction costs are calculated efficiently and both parties are notified when the transaction is done.
Ripple and Bitcoin may not be rivals but since they are ranking first and second in the list of cryptocurrency chart, it is important to highlight their key differences:
• Supply method: Ripple coins are issued while Bitcoins are mined
• Scarce resource: Ripple’s 100 Billion versus Bitcoins’ 21 Million
• Fast Transaction: Ripple’s 1000 transaction per second versus Bitcoins’ 3 transaction per second
Ripple got mixed reactions from cryptocurrencies patrons and enthusiasts. Its underlying fundamentals with very specified focus made it very attractive to banks and was considered as an alternative to SWIFT network. Its association with legit institutions made it very bankable for a run-up potential and will eventually become the banks official crypto. However, there is already a potential threat of fierce competition and emerging projects that are willing to compete or even knock-out Ripple’s current standing.
However, Ripple achieved a solid reputation behind Bitcoin. Even it may not surpass Bitcoin, its technology has great potentials. It embodies the great features of being business friendly and regulation compliant. Ripple’s goal of becoming an integral part of the daily commerce is not impossible as despite the hype, Bitcoin is still very vulnerable and questionable.
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