Bitcoin versus Ripple - Learn more at

I’ve been doing a lot of research on Ripple (XRP) which has led me to buy some of this interesting digital currency with impressive recent growth.  I’ve also gotten a few questions about “bitcoin versus ripple” from friends and associates. But before we get to Ripple – what it is and what it intends to accomplish…you might want to brush up on digital currency by viewing the video below.

According to their website, Ripple is the name for both a digital currency (XRP), and an open payment network within which that currency is transferred. It is a distributed, open-source payments system currently still in beta with its goal being to enable people to break free of the “walled gardens” of financial networks – ie, credit cards, banks, PayPal and other institutions that restrict access with fees, charges for currency exchanges, and processing delays.

Ripple’s chief cryptographer, David Schwartz, explains it like this:

“Payment systems today are where email was in the early ‘80s. Every provider built their own system for their customers and if people used different systems they couldn’t easily interact with each other. Ripple is designed to connect different payment systems together.”

Schwartz also anticipates the possibility of seeing “big companies lose their control over the flow of other people’s money just as they’ve lost control over the flow of information.”

Ripple is starting to work with banks to transform how the banks send money around the world, allowing banks to send money in real-time across international networks.  Using Ripple, banks can meet growing demands for faster, low-cost, on-demand global payment services for any payment size.

Ripple is signing more and more banking institutions every day – and clearly, it has a completely different purpose than that of Bitcoin (BTC), while being like Bitcoin in some ways.  Like Bitcoin, Ripple’s XRP unit is a digital form of currency based on mathematical formulae and has a limited number of units that can ultimately be mined. Both forms of currency can be transferred from account to account (peer-to-peer) without the need for any intervening third party. And both provide digital security to guard against the possibility of counterfeit coins.

Perhaps Ripple positions itself as a complement to, rather than a competitor with, Bitcoin. The Ripple network is designed to allow the seamless transfer of any form of currency, whether dollars, euros, pounds, yen or bitcoins. “Ripple will open up many more gateways for bitcoin users and easier ways to bridge bitcoin with the mainstream world of finance,” says Stephen Thomas, a senior developer for the ripple protocol and a bitcoin advocate.

In addition to giving Bitcoin more ways to connect with those using other forms of currency, Ripple promises expedited transactions and increased stability. As a distributed network, Ripple does not depend on a single company to manage and secure the transaction database. Consequently, there is no waiting on block confirmations, and transaction confirmations can go through the network quickly.

Ripple doesn’t collect transaction fees the way PayPal, banks and credit cards do. There is a small portion of a ripple (equivalent to ~1/1000th of a cent) taken from each transaction, which is destroyed vs. retained. This deduction is intended to act as to safeguard against the system being swamped by any one individual who might try to put through millions of transactions at once.

Bitcoin versus Ripple?
Maybe not.

Bitcoin is a decentralized digital currency. Ripple is a decentralized transaction network that also contains a digital currency called ripples or XRP. The Bitcoin network tracks the movement of bitcoins, whereas the Ripple network can track information of any kind.  Ripple allows for automated scripts. For example, a script might be created to work like this: if account A does not receive $100 by July 1, then the money account A received will be automatically returned to the original accounts – and gone is the need for a third party to oversee the transaction.  Ripple seeks to enable congestion-free transaction and settlement of any value – micro-payments, time-locked payments, escrow, mass transaction payments, and so on.

It’s this transaction network aspect of Ripple that I find most intriguing.  A decentralized ledger maintained on the internet which opens up some revolutionary possibilities that will help both Bitcoiners and normal-money users. Once the source is released, and people start to use and understand the network, the Ripple/Bitcoin relationship will surely become more clear.


Ripple is an open-source, global exchange. Anyone can access it and everyone has an equal right to use it. Ripple, the company, does not control the network, collect fees, or limit access. Ripple is a distributed, real-time payment protocol for anything of value. It’s a shared public database, with a built-in distributed currency exchange, that operates as the worlds first universal translator for money. Ripple is currency agnostic and has a foreign exchange component built right into the protocol. Ripple acts as a pathfinding algorithm to find the best route for a dollar to become a euro or airline miles to become Bitcoin. It will look at all the orders in the global order book. ANYBODY can put a bid-ask on anything of value. The Ripple protocol is designed to route every transaction to the cheapest price available in the market.


There is a transaction fee to use the Ripple exchange (~.00001XRP) and it must be paid in XRP, the native token of the network. Having a cost associated with ledger entries helps prevent ledger flooding attacks. Like Bitcoin, XRP has no counterparty risk. Unlike Bitcoin, XRP transactions clear in 4 seconds or less.

XRP is a digital asset with verifiable mathematical properties, similar to how we can reliably verify gold as a substance made of 79 protons. XRP also serves as a currency of last resort that can bridge between any currency, asset, or thing of value in the world. If every currency is liquid to XRP, it is also liquid to other currencies. By design, 100 billion XRP were created at Ripple’s inception, and per the protocol rules, no more XRP can ever be created.

Personally, I think we may see an investment opportunity – and do not believe that Bitcoin versus Ripple at all – and I love that the Trade Coin Club trades the top 10 cryptocurrencies for me daily.  I think that Ripple appeals to the financial systems, and that it will have a future – albeit maybe a shorter one in the long, long run.  Bitcoin was not conceived to make the financial system more billions by using the blockchain technology to “centralize” their transactions and replace third-party clearing houses with a consortium of financial players.  However, I do think that before the long range intent behind blockchain and bitcoin technology can emerge, there will need to much wider acceptance by users.  It may be that emerging platforms such as Ripple are stepping stones to that density of acceptance.

Ripple appears to offer a software product that manages everything that must happen around a payment. The actual payment itself can take place on a public ledger or it can take place using Interledger Protocol (ILP).   Interledger Protocol (ILP) originated at Ripple and was designed to enable communication between different international payment systems around the world. Financial institutions seem to like this approach quite a lot. Their objections to being forced to hold a crypto-currency, forced to transact in public, forced to rely on third parties whose performance can’t be guaranteed, and so on, are lifted, and if Ripple can bridge that payment, there’s no technical obstacle.

Banks can use this system even if Ripple can’t bridge a single payment.  And then, when Ripple can effectively bridge one in a thousand payments, it will. And if it can ever effectively bridge one in a hundred payments, that will happen. It’s a path to solve the various chicken and egg problems where nobody will invest in or use a system that makes using a crypto-currency even possible – until there’s enough volume/capacity to handle a significant fraction of payments.  Opposition to crypto currencies is slowly changing, and financial institutions are becoming more and more receptive to crypto-currencies.

There are a lot of problems and issues to be solved – like cost, privacy, time, transparency – before wide acceptance is achieved, and I don’t think that any one product or protocol is going to solve them all.  Just like the Internet made it possible for anyone to provide data to anyone – Ripple could be the vehicle that makes it possible for any intermediary to bridge payments between any endpoints.  And that’s a starting point.  Just like email was the be-all-end-all for YEARS and now, it’s been replaced with text-messaging; desktops was the thing, again quickly being replaced with mobile and tablet devices.

Fact is, most folks would be happy if their bank just stopped charging $50 for international transfers – and they don’t really care how they do it.  Baby steps…and maybe we need to stop thinking “bitcoin versus ripple” for the time being.