Comparing Ripple vs. Bitcoin

Ripple vs Bitcoin

Looking for a comparison between Ripple and Bitcoin? As the old saying goes, “It’s like comparing apples and oranges.”

Apples and oranges are both fruit. Ripple and Bitcoin are both cryptocurrencies that have gone through big and volatile increases in value. Beyond these similarities, apples and oranges are quite different and so are Ripple and Bitcoin.

Let’s take a look at both Ripple and Bitcoin; when they started, what they are used for, how they are operated, and their increase in value and see how they stack up against each other.

Ripple vs Bitcoin: Two Different Purposes

Bitcoin is the original cryptocurrency, while Ripple is a relative newcomer. Bitcoin was started in 2009, in response to the financial crises of 2008. Its purpose is to be a currency with no middlemen (banks) needed. It’s meant to eventually bypass the need for government-issued currency altogether and put money directly into the hands of people.

Ripple was started in 2012, with 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.

As you can see Bitcoin and Ripple have entirely different purposes.

Cryptocurrency Regulations

Let me start by saying that compared to fiat currency that is run by governments, cryptocurrency is mostly still deregulated and in its infancy. Even Bitcoin is only 10 years 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 and companies that develop new cryptocurrencies are likely to institute new rules.

There is also rumbling of new government regulations on crypto. So what is true right now may be different in 6 months to a year. That being said… even on the face of it, Bitcoin and Ripple are designed on purpose to be completely different types of cryptocurrency with very different goals. Bitcoin is designed to be used like fiat currency to buy things anonymously – like cash can be used, but on digital platforms. It’s specifically decentralized and anyone who has the means and will is able to mine new Bitcoin.

Ripple vs Bitcoin: Two 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 accepted in most brick and mortar stores.

Ripple, on the other hand, was never developed to be used as a cash alternative. Instead Ripple is designed to make banking transactions across different kinds of currencies less expensive and work faster. 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 does have stronger 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.

Ripple vs Bitcoin: Valuations

Both Ripple and Bitcoin can be traded on cryptocurrency exchanges. Exchanges allow consumers to sell, trade, and buy different cryptocurrencies (there are more than 1600 different cryptocurrencies in exchange today).

Not every type of cryptocurrency is represented on every exchange or brokerage. But because 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.

It's also important to be aware that not only are the different cryptocurrencies unregulated, but the exchanges are largely unregulated as well, which means they can be risky. So, 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 percent 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.

Bottom Line on Bitcoin vs Ripple

Ripple and Bitcoin, while both cryptocurrencies are very different in what they are used for and how they operate. At the time of this writing, Bitcoin is worth $6,587.51 and XRP (the “coin” that Ripple uses) is worth $0.47. (Keep in mind that though there is an extreme difference in price, there are other factors to consider when making comparisons - see this article on comparing cryptocurrencies by market cap).

I think it’s important to note that both of these cryptos are currently trading at a much lower price than the highs they reached in late 2017 and early 2018. But… 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.

On the other hand, Ripple is doing something entirely new and are not super well established yet – which makes it a very risky trade. Bitcoin is more established and has the “first mover advantage” in cryptocurrencies. In fact, many other of the alt-cryptos can only be bought with Bitcoin. I’m not sure there is a winner or loser in the comparison of Ripple vs. Bitcoin. They are very different types of products. It’s like comparing apples and oranges and the future of cryptocurrency is anybody's guess.