Let’s Accept It: Ripple (XRP) Holds A Huge Advantage Over Both Bitcoin (BTC) And Ethereum (ETH)
Forget the regulatory issues and debates on decentralization. Focus on future capability. On this, Ripple (XRP) will come out on top.
A recent report that former Ripple CTO Stefan Thomas had one eye on upsetting Ethereum comes at the right time for Ripple (XRP). It is so because it highlights the advantages that the latter has over the former.
The project was first developed in 2014, way before Ethereum went live in 2015. Could Ripple have been any different if they had pursued the idea? Most likely they would be. The team at the company shelved the idea of smart contracts for one reason as explained by Thomas:
“We just didn’t feel like smart contracts was a very mature industry at that point…. Frankly, the use cases seemed somewhat dubious in value.”
Well, Ethereum went ahead to prove them wrong. But it soon ran into problems of its own. By deciding to resurrect the Codius project and re-launch the 2014 smart contracts platform, Thomas has resurrected two issues: scalability and fees.
The launch of Coil, the company that will oversee the Codius implementation is an indication that Ripple has what it takes to beat the much-vaunted ether. More likely than not, it serves to put a spotlight on Ethereum problems while illuminating once more Ripple’s superiority.
According to Josh Williams, an investor, “Teams in games and elsewhere are building on Ethereum and running into the cost and scalability issues we’re all familiar with. Codius has great potential in addressing these concerns, and we are eager to work with it.”
Codius will seek to plunge into the smart contracts arena and carve space for itself, but Ripple asserts its superiority. Let’s revisit that once more.
Ripple’s scalability and low fees tops
Much has been said about how Ethereum and bitcoin are the standard bearers in cryptocurrency. That isn’t in any way doubtful given their pioneering breakthroughs in this industry. But when it comes to scalability, both can’t match Ripple. Compare this on-chain processing speeds: XRP: 1,500 TPS, Ethereum: 15 TPS, Bitcoin: 6 TPS.
The huge difference in transaction speed points to the fact that XRP scales faster. Though not anywhere near the speed reached by VISA, its still way better than the top two. Detractors will point to off-chain capabilities like Plasma, sharding and Lightning network.
While they significantly increase these networks’ throughputs, they still don’t come near XRP. Payment channels will still need to communicate with the main chain at a given time and will thus still be affected by the on-chain transaction speed.
On average, Bitcoin takes an hour before a transaction is fully confirmed. Ethereum will take anywhere between 3- 15 minutes.
XRP, on the other hand, will take a maximum of 4 seconds. XRP is able to reach the four-second settlement time due to the fact that there’s no risk of reversal. Once validators reach consensus, the ledger closes and all users accept it as the immutable record of the network
What’s the implication? It doesn’t matter what off-chain scalability solution these platforms adopt. XRP transactions will be settled within four seconds while ETH will take fifteen minutes and BTC an hour.
Validators on the XRP ledger don’t receive any rewards for securing the network. Its validators do so voluntarily, as stakeholders within the ecosystem. Even though XRP users still pay a fee, the intention is to use it as a way to prevent issues like DDoS. Unlike the huge fees charged on Ethereum and Bitcoin, Ripple’s cost for transactions is very small.
At the moment, a single transaction will cost about $0.000005, compared to ballooning fees for BTC and ETH. These low fees open up XRP for a wide user base, basically making it ideal for micropayments.
And so, other than the banks that could leverage xRapid, individual end-users can use the coin to buy goods or access website content. Codius could achieve this.
Even as Ripple pursues banks and payment providers, its vastly superior blockchain and ledger could be what most other projects look to for scalability and low fees. And this bodes well with Ripple’s decision to explore the possibility for more use cases of the XRP token. And that’s how it’ll replace Ethereum (ETH) at the top.