Every cryptocurrency trader knows Ripple & Ethereum, yet is not sure what the difference is. XRP and ETH both cryptocurrencies are quite popular in the crypto market leaderboards.
Ripple is the blockchain payments firm and ETH is the platform that supports smart contracts and dApps building. XRP is the native cryptocurrency of Ripple and ETH is the native cryptocurrency of Ethereum.
Quick insights
Let us discuss in detail, the difference between Ripple (XRP) and Ethereum (ETH) in this article.
What is the difference? – Ripple Vs Ethereum
Both Ripple and Ethereum have their own digital coin XRP and ETH respectively, and can be bought and sold easily in any cryptocurrency exchange. These coins work as a bridge between different currencies when the XRP or ETH holders can use their coins to exchange crypto and fiat currencies. But there are a few differences to be taken into account.
- Ripple is a blockchain protocol that enables sending and receiving international payments faster. Ripple is highly centralized as Ripple Labs play a significant role in its governance. Ethereum is a decentralized platform that enables dApps to be developed. Ethereum uses a specialized device, called a miner, to connect with its network to confirm global transactions, thereby ruling out the interference of a third party.
- The objective of Ripple is to facilitate cross-border transactions through banks and financial institutions to transfer funds quickly at a cheap price. The objective of Ethereum is to enable its blockchain capable of building decentralized applications called dApps and smart contracts.
- Ripple targets large financial institutions such as banks and payment providers. Ethereum targets developers and large organizations who are interested in blockchain technology. In fact, anyone can develop dApps on this platform.
- Ripple XRP is a cryptocurrency and also called a bridge currency in the Ripple network to enable quick exchange of different currencies. Ethereum (ETH) is a cryptocurrency that allows smart contract participants to make transactions without a central authority.
- Transaction speed in the Ripple network is about 3 to 5 seconds whereas in the Ethereum network, it is confirmed as about 10 to 20 seconds.
- 100 billion XRP were created at the beginning level till now no new XRPs have been created. A significant portion of XRP is held by Ripple Labs. There is no market cap for issuing Ethereum (ETH) in the market, however, the issuance rate decreases over time.
- The Ripple network is said to handle a maximum of 1500 transactions per second whereas the Ethereum network can handle up to 30 TPS.
- Ripple is adopted for the requirements of financial institutions for their intended purpose of facilitating cross-border transactions. Ethereum supports a wide range of applications not only finance DeFi, but also gaming and supply chain management. It is widely adopted by developers and enterprises for building decentralized applications.
Despite so many differences, they have some similarities too as below:
- Both Ripple and Ethereum support smart contracts.
- Both are based on blockchain technology, yet have different purposes.
- Both the cryptocurrency tokens can be used to collect NFTs (Non-Fungible Tokens)
Conclusion
Both Ripple (XRP) and Ethereum (ETH) are the largest players in the crypto market. Yet, they share very few similarities in blockchain technology and they both also serve very different purposes. Ripple focuses primarily on facilitating easy cross-border payments and Ethereum focuses on facilitating dApps development in its blockchain.
Pro Tip
Understand the basics of cryptocurrencies and the difference between the large players like Ripple (XRP) & Ethereum (ETH) with our trusted forex brokers. Learn more about the risks and benefits of cryptocurrencies to develop your knowledge in the crypto market.
Frequently asked questions
1. What is Ethereum (ETF)?
Ethereum is a smart contract and dApp building platform which is an open-source blockchain platform. Simply put, the contracts and dApps can be developed without a central authority on the Ethereum blockchain platform.
2. What is Ripple (XRP)?
Ripple is a California-based blockchain payments company having the aim of enabling financial institutions and banks to provide fast and efficient cross-border transactions. Ripple (XRP) is a cryptocurrency and digital payment platform that uses a blockchain-based network.
3. What is a smart contract?
A smart contract is an agreement based on some pre-programmed terms on which a financial transaction can be automatically processed when the conditions are met.
4. What is NFT?
NFT – Non-Fungible Tokens is a digital asset that links ownership to physical or digital products such as real estate, music, videos, or works of art.
