Ethereum Vs. Ripple — The Importance of Speed in Cross-Border Payments

2021 seems to be forever remembered as a year of outstanding crypto volatility and at the same a year of constant profits and losses for investors and traders. Hence as minded investor you’re interested in maximizing your profits this uncertain year. For this purpose, we present this overview of Ripple & Ethereum – the most perspective projects of the last year. Having read this guide to the end you could make your decision concerning investment in one of the currencies or to both of them.

Brief Summary of XRP and ETH

The crypto market is on the bull run these days and the cryptos dominating the market cap ranking, such as Ripple and Ethereum attract the most attention. Before you cosider investment in these cryptos it’s important to understand the technologies behind them.

Ripple is developed for financial cross-border transactions and works as an exchange platform for various financial organizations worldwide. Its major value lies in the ability to process various money transfers acroos the world at the fastest possible speed. On the contrary. Ethereum is known for its smart contracts functionalty, allowing developers to build the various apps on the top of the ETH bockchain. 

Ripple and Ethereum comparison

In fact, these two projects can’t be compared directly. Ripple is a commercial project and the aim of its development is to gain profits for the processment of transactions within its network, while Ethereum is a non-commercial project in its nature. 

Some other key differences include:

  • consensus mechanisms – Proof of Work (ETH) vs unique distributed mechanism (XRP)
  • decentralization of ETH vs centralized XRP
  • network speed – Ripple is 4 times faster
  • price of transactions – Ripple is much cheaper (0,00001 XRP vs $1.50 for ETH)

Recent milestones and investment perspectives

As we all know, Ethereum demonstrates price records this year, reaching $2000+ in middle February. Regardless of the speculative fluctuations, the price showed 5x growth since the beginning of 2020. The speculations are definitely not the only reason for the growing popularity of the project. The development of DeFi projects on the basis of the Ethereum blockchain is constantly stimulating the demand for crypto. This tendency is likely to strengthen in the next years as the ETH continues to work on its scalability and decentralization, making it a perspective investment.

What about Ripple? Here, the situation is less clear. On the one side, the project’s partnership network continues to develop as more and more financial institutions care about the fast speed and low fees of their cross-border transaction. On the other side, the SEC lawsuit against Ripple negatively affects the demand for crypto. If XRP is considered a security and falls under SEC regulations the demand for it will definitely fall. The negative effect on demand is already vivid while the lawsuit is still in progress and even if everything ends well for Ripple these days it does not mean similar cases will not be opened in the future. 

It means Ethereum is a better investment in 2021. If you still have many XRPs in your wallet you might consider xrp to eth calculator to transfer some part of your portfolio to ETH. If you are just a starter, it’s a good idea to start your investment with a more stable and profitable coin such as ETH.

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