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?

Ethereum vs Ripple (XRP)

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.

Bitcoin, Ethereum Price
Make-someones-day / Pixabay

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.

Get our newsletter and our in-depth investor case studies all for free!