Bitcoin and Ripple are two major crypto players in the market. Although BTC takes the first spot in the rankings, XRP is also doing well to maintain its position in the top ten. Both tokens have shown they are capable of navigating through tricky financial times.
So, what about the smartest move in the current situation? Is it best to convert XRP to BTC and wait for its next boom? This guide analyzes how Bitcoin and Ripple stand at this point and what to consider before going through with the trade!
Bitcoin vs Ripple: How Are They Different?
Bitcoin development’s goal is to offer a digital currency for various transactions. Ripple Labs developed XRP as the native crypto token to use for transactions on platforms and products created by this company. Apart from the intended purpose, here are the other differences between the two currencies!
Consensus Mechanism
Ripple uses a consensus mechanism called the Federated Byzantine Agreement. It involves using multiple servers that contain unique nodes. Each node confirms its validity by conducting a poll. At least 80% of the nodes should agree that the transaction is valid to confirm it. That ensures decentralization and saves the time required to verify a transfer.
Bitcoin uses a blockchain mining concept. Each transaction remains in a shared public ledger after being confirmed by enough blocks. But that takes time and energy. It’s why you’ll hear BTC isn’t an eco-friendly solution – it requires much energy to validate a single transaction.
Transaction Speed and Fees
Bitcoin might be a leader in popularity in the crypto market. But it’s nowhere near the top spot when it comes to transaction fees and speeds.
The average transaction fee for a miner to confirm the transaction was $0.95 (0.000044BTC) in August 2022. But the cost depends on the transaction data volume and the desired speed. It could take up to an hour for a single transaction.
Ripple speeds up the process if you use its network. Most transactions occur in seconds, and the fees are low, especially compared to BTC. However, please notice that XRP requires users to pay a transaction fee.
Total Supply and Coin Release Mechanism
Bitcoin has a maximum supply set at 21 million tokens. It’s partially why this currency is so valuable. Its scarcity indicates the value could rise over time, which is tempting for investors. Bitcoin doesn’t have a clear release mechanism. Instead, miners are the ones who “find” and add coins to the network.
Ripple has a max supply of 100B coins, and 50% of them are already in circulation. Thus, the asset’s scarcity doesn’t pose a problem just yet.
BTC and XRP: Price History
XRP is now worth $0.4 per coin. And although that’s not the lowest, it’s also far from the highest value the token has had this year. Ripple started at $0.85 in 2022, and despite occasional drops, it maintained this value until the end of March.
The current BTC value is about $16,500. Bitcoin recently suffered a major drop since the value had exceeded $21,000 earlier in November. And if we observe the entire year to date, this isn’t the first time the token has lost a huge portion of its value in days.
Despite this, Bitcoin remains the crypto token with the biggest reputation. You might consider converting it to XMR — https://godex.io/exchange/btc-to-xmr/ — to gain a short-term profit. But in the long run, Bitcoin remains a smart token to have in your wallet.
Bottom Line
Things won’t change in the near future as Bitcoin and Ripple will remain reputable players in the crypto market. If you expect BTC to have a major boom, it might be a smart time to convert your XRP to this currency now. But ultimately, the decision depends on the type of trader you are. The best tip we can give is to analyze all factors before making the final call!