Cryptocurrency has taken the world by storm since Bitcoin first arrived on the scene. Many people saw the success that Bitcoin achieved and wanted to replicate it. This is why the crypto world is significantly larger than it was ten years ago.
This can be intimidating for new crypto investors – there are so many options to choose from. This is where we come in. We will compare various crypto assets to help you find the best investment for you. Here, we’ll be taking a look at Ethereum and Ripple.
History
If you’re planning on investing in a crypto asset, it’s a good idea to learn more about its history. This will give you a good indication as to where your money will be going.
Ethereum (ETH)
Ethereum was one of the first cryptocurrencies to come about after Bitcoin. The whitepaper explaining the Ethereum blockchain was published by Vitalik Buterin in November 2013.
Buterin was one of many co-founders. Others included Mihai Alisie, Joseph Lubin, Jeffrey Wilcke, Anthony Di Lorio, Amir Chetrit, Charles Hoskinson, and Gavin Wood.
Ethereum made a name for itself in 2014 when it was shown off at a Bitcoin conference in Miami, Florida. The public could purchase ETH tokens at this time, but there was a catch.
In fact, the Ethereum blockchain was only up and running on July 30, 2015. ETH token holders, therefore, had to wait until this date before they could stake, move, or sell their ETH coins.
Ripple (XRP)
Ripple didn’t start its life as a cryptocurrency. The company was first founded in 2004 when it was named RipplePay. It was created by Ryan Fugger as he wanted to develop a way for people to send money across the globe.
Fugger sold RipplePay to David Schwartz, Arthur Britto, and Jed McCaleb in 2012. These new owners changed the company into a digital currency network, and it was consequently renamed OpenCoin.
McCaleb would eventually leave the company and create Stellar, a fork of Ripple, in 2013.
The company was renamed and became Ripple Labs in 2013 before being shortened to Ripple in 2015.
What It Does, And Why It Was Created
Understanding the capabilities of a cryptocurrency is vital. It can tell you what else you can use them for besides investing.
Ethereum (ETH)
Vitalik Buterin came up with the Ethereum platform as a way to disempower financial institutions. He got this idea after finding out about the Bitcoin network, but he wanted to do some things differently. Bitcoin disempowered these organizations by acting as a decentralized payment system.
This is why Ethereum is a decentralized platform that can act as a payment system. However, this is only one function of the Ethereum blockchain. Ethereum can also run decentralized apps and store data.
Ethereum achieves this by establishing a peer-to-peer network that can execute and verify application code known as smart contracts.
Ethereum now makes use of a proof-of-stake consensus mechanism. It previously used a proof-of-work consensus mechanism but moved away from it as it was not energy efficient.
Ripple (XRP)
The cornerstone of the Ripple network is its blockchain technology. Ripple’s blockchain is an electronic ledger, keeping track of transactions and their information. The record of transactions that Ripple provides is permanent and, like many other platforms on the crypto market. Ripple’s electronic ledger is called XRPL (XRP ledger).
Ripple does not use either of the most popular consensus mechanisms. These are proof-of-stake and proof-of-work. Instead, it uses a quorum-based consensus protocol called RPCA (Ripple Protocol Consensus Algorithm).
Ripple differs from many other digital assets as it controls its own blockchain. It also doesn’t provide rewards when new blocks are added to the blockchain, and it is neither mined nor minted.
The most fascinating thing about Ripple is its customer base. This is because Ripple’s customers primarily consist of banks, as it provides a reliable, fast, and cheap global payment network.
Price History
You should always consider the price history of a crypto asset before you invest. This will give you a good idea as to how stable it is and how much its price will fluctuate.
Ethereum (ETH)
When the Ethereum ETH token first became available to the public, one token was worth only $0.31. By early 2016, the price had increased to $31.
In 2018, the crypto market boomed, which allowed Ethereum ETH tokens to reach their first significant value milestone of $1,000. Unfortunately, after this boom, the crypto market began to decline.
For the next few years, Ethereum ETH tokens did not experience much growth in value until 2021, when the crypto world would reach its peak. By mid-2021, ETH tokens were valued at a whopping $4,038; by the end of the year, they would reach their ultimate peak of $4,701.
2022 has not been prosperous for the crypto industry, as many tokens experienced a huge decline. This is why one Ethereum ETH token is currently worth $1,250.
Ripple (XRP)
Ripple coin has never reached the same value heights that other cryptocurrencies like Bitcoin and Ethereum have. One Ripple XRP was worth less than a single cent until 2017 when one token sold for $0.35.
The price of Ripple coins remained relatively stable until the beginning of 2018 when the rest of the crypto industry boomed. The XRP price would reach its all-time high of $3.30.
Unfortunately, as the year continued, the token’s value plummeted, and by September 2018, one XRP token was worth only $0.34. This price would not fluctuate all that much over the next few years until 2021 when the token would experience a brief resurgence. Its value would climb to $1.56 at this time.
2022 was a poor year for the crypto world overall, and the Ripple token felt these effects as well. This is why one Ripple XRP is worth $0.39 in December 2022.
Market Cap
Market capitalization refers to the total value of a digital asset, so it is an important factor to consider when investing.
Ethereum (ETH)
Ethereum currently has a market cap of $153.06B. Ethereum has the second highest market cap of any digital asset on the market.
Ripple (XRP)
Ripple currently has a market cap of $19.59B. Ripple has the seventh-highest market cap of any digital asset on the market.
Similarities
- Both Ripple and Ethereum can be purchased from crypto exchanges.
- Both Ripple and Ethereum support smart contracts.
- Both blockchain projects are in active development.
Differences
- Ripple technically does not have an unlimited circulating supply, whereas Ethereum does.
- Ripple XRP has a much faster transaction speed.
- XRP transactions are much cheaper.
- Ethereum is currently decentralized.
- Ethereum can be mined.
- Ethereum can be purchased from nearly any crypto exchange, while Ripple is only available on select exchanges. These exchanges sometimes also require Ethereum or Bitcoin to purchase Ripple.
Risks
Investing in any cryptocurrency can be risky; however, we’ll be discussing the risks that apply to each digital asset.
Ethereum (ETH)
The most significant risk you will face when investing in Ethereum is that you could lose your entire investment in the blink of an eye. The cryptocurrency industry is incredibly volatile and hard to predict, and Ethereum is not exempt from this.
Another risk that applies explicitly to Ethereum is that it could become centralized. This would occur if it moved to a proof-of-stake consensus mechanism. This is because 60% of the platform’s stake belongs to four major parties.
This means that if these parties vote for or against a certain transaction or a proposed change, they will have the most say.
Ripple (XRP)
One of the most significant risks you will face by investing in Ripple is the fact that it is run by a private company. This means that regardless of how much XRP you have, you will not have a say in anything the company decides to do.
Where You Can Buy It
Ethereum (ETH)
You can easily purchase Ethereum ETH tokens from:
Ripple (XRP)
Ripple XRP tokens can be purchased from:
How Can You Exchange ETH For XRP?
You can exchange Ethereum ETH tokens for Ripple XRP tokens by using the exchanges that XRP can be purchased from.
This is because Ethereum supports far more crypto exchanges than Ripple.
Future Plans
Ethereum (ETH)
ETH tokens might not be worth as much as they once were, but analysts predict this is due to change. Some analysts have predicted that Ethereum could be worth over $4,000 again in the next few years.
Ripple (XRP)
Some analysts have predicted that Ripple XRP tokens could be worth $3.81 by the end of 2025, while others have stated that they will only be worth $0.68 by then.
Unfortunately, there is no way to know for sure with the crypto industry.
Sources
https://corporatefinanceinstitute.com/resources/cryptocurrency/ripple/
https://coinmarketcap.com/currencies/ethereum/
https://coinmarketcap.com/currencies/xrp/
https://cointelegraph.com/ethereum-for-beginners/history-of-eth-the-rise-of-the-ethereum-blockchain
https://decrypt.co/38271/so-what-is-the-ethereum-eth-total-supply
https://www.benzinga.com/money/ripple-vs-ethereum
https://www.fool.com/investing/stock-market/market-sectors/financials/cryptocurrency-stocks/ripple/
https://www.investopedia.com/tech/ripple-xrp-cryptocurrency-how-to-buy/
https://www.nasdaq.com/articles/xrp-ripple-price-prediction%3A-2022-2030
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