Among the hundreds of cryptocurrencies circulating around the market, two names- Bitcoin and Ripple are the most prominent in terms of liquidity, potential and application.
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Which is better, XRP or BTC? Let’s compare both of them below.
An Introduction to Ripple
It’s easy to confuse Ripple with XRP, but they are two different entities. Ripple is the company that created XRP, which is a digital asset.
Ripple changed course and became a platform for money transfers. XRP was designed as an intermediary between two cryptocurrency networks.
Ripple has its roots in the real world and is backed by financial institutions and banks. Its network is useful as it allows for quicker conversions on two different currencies.
An Introduction to Bitcoin
Bitcoin is perhaps the most popular cryptocurrency in existence. It was created by Satoshi Nakamoto as a novel token designed to be exchanged to one another. Before long, it caught the attention of the world and soon gained immense value.
Bitcoin is a digital asset and can be transferred quickly from one location to another using the blockchain network. It’s one of the most valued commodities on the internet, and you can start trading Bitcoin with little capital.
How is Ripple Different From Bitcoin?
Bitcoin has a blockchain ledger that houses a digital currency and can be exchanged for goods or services. The transactions are carried out by miners who have the hardware needed to solve the complex equations. They are then rewarded with a bit of BTC and for helping the process move along.
XRP is Ripple’s native currency within the Ripple ecosystem and can be used for remittance, asset exchange and payment settlement. The coin is pre-mined and has a less complicated technique compared to BTC.
Both cryptocurrencies operate differently in regards to validating transactions. Ripple uses a distributed consensus via polling, which gives it a rapid deployment aspect without the need for a central authority. XRP is decentralized and uses very little energy for mining, which is unlike Bitcoin in that regard.
Bitcoin in itself is decentralized, which means the supply and flow is not owned by a single entity or organization. Bitcoin also has a different use system compared to XRP’s.
Where Should You Invest?
The good news is that both cryptocurrencies are viable investment assets. Bitcoin is going as strong as ever, while XRP is gaining ground in its own right.
It’s recommended that you split your capital between the two cryptocurrencies, or to more types to have a well-rounded portfolio. Bitcoin is an exciting asset since it’s volatile and popular, and you can potentially make a profit in such a short time. Also, it’s available in most cryptocurrency exchanges and can be liquidated, or turned into cash pretty quickly and in a moment’s notice.
When investing, make sure to get a crypto wallet where you can store your digital assets. When you plan on holding onto the asset for the long term you will want to keep it in cold storage. For day trading, a hot wallet should suffice.