Comparing Ripple vs. Bitcoin
Ripple and Bitcoin Are Tough to Compare for Several Reasons
Looking for a comparison between Ripple and Bitcoin? As the old saying goes, it’s like comparing apples and oranges.
That's because while Ripple and Bitcoin are both cryptocurrencies that have gone through big and volatile increases in value, they have some fundamental differences that make them hard to compare.
Bitcoin is the original cryptocurrency, while Ripple is a relative newcomer. Bitcoin was started in 2009 in response to the financial crisis of 2008. Its purpose is to be a currency with no middleman, such as a bank. Ultimately, its users want it to bypass the need for government-issued currency altogether and put money directly into the hands of people.
Ripple, on the other, was started in 2012 for a very different purpose than Bitcoin. It is nowhere near as decentralized as Bitcoin is and is primarily used by financial institutions to facilitate payments across fiat or government-issued currencies. Normally, transferring money from country to country is a time-intensive process. With Ripple, it’s fast and secure.
Compared to fiat currency that is run by governments, cryptocurrency is mostly still deregulated and in its infancy. Even Bitcoin is only a little more than a decade old at this point, and all the other cryptos that have come after Bitcoin are even younger. This means that a lot of the rules are still being made up as we go along, and while anything can change (including fiat currency), cryptocurrency of all types is likely to change more as companies develop new cryptocurrencies with new rules.
There is also rumbling of new government regulations on crypto, so what is true right now may be different months later. That being said, Bitcoin and Ripple are designed to be completely different types of cryptocurrency with very different goals. Bitcoin is designed to be used like fiat currency to buy things anonymously, just like cash, but on digital platforms. It’s specifically decentralized, and anyone who has the means and will is able to mine new Bitcoin.
Different Types of Transactions
Currently, Bitcoin is accepted as payment in many different places, although at this point most people that are involved in Bitcoin use it more as a speculative venture. As of this writing, places that accept Bitcoin include OkCupid, CheapAir, PizzaForCoins, Zynga, and some retailers on Etsy. There are also a lot of small online retailers that take Bitcoin, but you aren’t currently likely to find it acceptable in most brick and mortar stores.
Ripple, on the other hand, was never intended as a cash alternative. Instead, Ripple is designed to make banking transactions across different kinds of currencies less expensive and more efficient. Most of the customers that use Ripple are corporate institutions and not average consumers.
Bitcoin is mined by anyone with enough means and desire to do so. It is completely decentralized using blockchain technology, which is complicated, but basically allows for complete accountability and transparency without central control.
Ripple is privately owned and has an internal ledger that is less open and democratic. This can lead to faster upgrades, but it does not have strong central control.
The bottom line is that Bitcoin was developed to take on the banking systems as a fully democratized system and Ripple was designed as a business-to-business offering. It’s because of these different goals that the companies have different structures.
Both Ripple and Bitcoin can be traded on cryptocurrency exchanges. Exchanges allow consumers to sell, trade, and buy different cryptocurrencies (there are more than 1,600 different cryptocurrencies in exchange today).
Not every type of cryptocurrency is represented on every exchange or brokerage. Since they are traded and still mostly unregulated, they act like the more volatile parts of the stock market with valuations that go up and down, sometimes quite rapidly.
Not only are the different cryptocurrencies unregulated, but the exchanges are largely unregulated, which means they are risky. If you decide to buy either Bitcoin or Ripple, a good rule of thumb is to invest no more than you can afford to comfortably lose.
In 2017, Ripple was a huge winner, gaining an eye-popping 35,000% in value, while Bitcoin gained 1,200 percent in value over the same time period. Both of these gains are huge and pretty much unheard of in more traditional investments, which is why so many people are jumping into the cryptocurrency craze.
The Bottom Line
Ripple and Bitcoin, while both cryptocurrencies, are different in what they are used for and how they operate.
The prices of both of these cryptos have settled down after the highs they reached in late 2017 and early 2018. If Ripple can make a go of the market they are inventing, and the technology that is used to solve the problem of currency transfers across fiat money systems, then they might have a lot of room to grow.
Ripple is doing something entirely new and is not well-established yet, which makes it a very risky trade. Bitcoin is more established and has the “first mover advantage” in cryptocurrencies. Many other of the alt-cryptos can only be bought with Bitcoin.
We're not sure there is a winner or loser in the comparison of Ripple vs. Bitcoin. They are very different types of products, and the future of cryptocurrency is anybody's guess.
Forbes. "$100 Invested in Ripple Would Have Made You $35K, What About the Rest?" Accessed March 15, 2020.