Cryptocurrencies make a great choice to earn huge returns on your investments in a very short period. The boom in crypto valuations also substantiates this fact. If you have ever traded in crypto, you might know it is a highly volatile market. So volatile that even a single tweet by an influential personality like Elon Musk can shake the entire crypto market.
It is pertinent to mention here that not all cryptos offer good returns. However, some coins like Ethereum and Ripple can provide great returns in the coming years. While Ethereum is the next best performing crypto after bitcoin, Ripple also seems to wake its way as a promising currency down the line.
But how to tell which one will trade better than the other? In this article, you will have all such questions answered; just scroll down to the end!
What are Ethereum and Ripple?
Ethereum, launched in 2015, is the most extensive decentralized and well-established software system, which also happens to be open-ended. Ether or ETH is its native crypto token, which was apparently launched in 2014 for presale by the company. Ethereum facilitates services like global payments, digital money, and applications. Moreover, ETH is the largest cryptocurrency in terms of market cap after BTC.
Ripple is a money transfer network that caters to the needs of financial service providers. While XRP, launched in 2012, is a crypto token designed to work on Ripple’s network. Moreover, XRP is also considered one of the top five cryptocurrencies globally in terms of market capitalization.
It is worth mentioning that Ripple is currently amidst a tussle with the Securities and Exchange Commission (SEC) due to some legal troubles. However, it hasn’t affected the performance of XRP in the crypto market. Even Ethereum and Ripple may be easily converted from one to the other by using an eth to xrp exchange or vice versa.
Significant Differences Between Ethereum and Ripple?
Although ETH and XRP are both among the top-performing cryptocurrencies, it doesn’t mean they work on the same principles too. Here’s what sets them apart-
ETH and XRP both use different consensus mechanisms. While ETH uses a proof of work (POW) mechanism to validate the transactions, XRP uses a network of trusted transaction validators.
In the POW consensus mechanism, the miners can solve complex mathematical expressions and compete with each other to win ETH as rewards. Therefore, anyone can mine ETH, which substantiates the decentralized Ethereum blockchain.
In a distributed consensus mechanism, the network participants adopt Ripple Lab’s Unique Node Lists (URLs) to select the nodes they trust. It makes XRT a centralized crypto community.
Ethereum, at present, can process around 15 transactions per second. Moreover, the transaction fee on Ethereum is also increasing due to the introduction of decentralized finance (Defi) projects.
At the same time, Ripple can process a whopping 1500 transactions per second! And for each standard transaction, the company charges a 0.00001 XRP. The transaction fee is then burned to create a deflationary mechanism.
ETH and XRP both make an excellent choice to start your investment in the crypto market. However, the long-term investment return against both cryptocurrencies may largely vary in the long run due to different consensus mechanisms, performance, and supply economics.
Nonetheless, with all the necessary information at your hands, you can easily decide whether to invest in XRP or ETH. Even If you have Ethereum and wish to convert it to Ripple, you may do it quickly by using Alligat0r crypto aggregator.