Here’s what you need to know.
Ripple is making waves. The cryptocurrency has burst onto the scene at the start of this year, with a surging value that’s pushed Ethereum aside to grab the title of second-largest token.
There’s a number of key differences between Bitcoin and Ripple. The former was first outlined back in 2008, and following a big run at the end of last year now holds value of $16,426 per token. Ripple, founded in 2012, has seen big interest from businesses including three Japanese credit card companies. It currently holds a deceptively low value of $3.12 per token.
Here are some of the key differences between the two cryptocurrencies, and what you need to know most:
Bitcoin and Ripple have very different governance and ownership structures.
Bitcoin is highly decentralized and open source, owned by a community that agrees on changes. This can make upgrades tough. Developers can use “soft forks” to avoid irreversible splits, which are backwards-compatible changes to the system’s use that allows nodes to opt in and out of the changes, avoiding breaks in the network. However, at least 51 percent of bitcoin mining power needs to support the change to avoid an irreversible “hard fork.”
Ripple is owned by a private company, and its internal ledger is a more closed affair. The company’s consensus-seeking approach can allow for faster upgrades. With the amendment system, developers seek consensus before making changes to the network. In most cases, if an amendment receives 80 percent support for two weeks, it will come into effect and all future ledgers must support it. This enables a democratized approach to development that allows for changes while avoiding irreversible splits.
Bitcoin and Ripple have conflicting approaches to cryptocurrency. Where Bitcoin’s decentralized approach means anyone can use it for whatever they feel like, Ripple is marketing its cryptocurrency as an asset transfer solution for major calculations. The company touts more than 100 customers, with more than 75 of those clients deploying Ripple commercially.
Bitcoin is huge. At the time of writing, the total valuation of all bitcoins in circulation is at $276 billion, while Ripple is at $120 billion. These two rest at the top of the cryptocurrency pile, while the total market is valued at $769 billion.