Crypto Academy Week 9 - Homework Post for @alphafx
In the quest for a more secure and private way to manage finances over the web, block chain has provided us with the perfect answer. As experimentation continues with block chain technology, more opportunities are now making themselves known.
Block chain is a revolutionary concept that was introduced to disrupt the financial industry. People are now more confident in investing on the web market because of the availability of this block chain network.
Increasingly, we're seeing the emergence of block chain platforms supporting the development of block chain-based applications. Just like any development platform, the right block chain system allows businesses to experiment in data management to transaction processing.
In this article, I will be analyzing two different block chain platforms (Ripple and Ethereum)
Ok, so you must have heard of Ripple and Ethereum or possibly other block chain platforms and you are wondering whether these platforms have differences, well, you have made it to the right place as I will be analyzing in this article the comparisons between Ripple and Ethereum.
First, look at the roots of these two block chain platforms.
THE ROOTS OF BOTH CRYPTO’S
Both Ripple and Ethereum are cryptocurrencies that run on the technology of block chain. This makes it possible for various individuals all around the world to send and receive funds in the shortest possible time. Both the Ripple and Ethereum block chains have their unique digital coin, you can buy and sell these coins at lots of different cryptocurrency exchanges. However there are some clear differences between these block chains. We will first start by looking at the Ripple platform.
This is a block chain platform that is focused on the financial side of the digital revolution. This block chain was created in 2012; it was created 3 years before ethereum was created. Its design, building and launching was done by a private organization known as Ripple Labs located in San Francisco. Their major objective was to introduce a block chain protocol that was capable of challenging the cross-border payment system that is used by banks to transfer money overseas. Even though Ripple Labs focuses on the banking industry, the Ripple block chain can be accessed and used by anyone to send and receive funds, the Ripple coin (XRP) is also open to anyone for trading on the open market. The block chain protocol that makes it possible for individuals and banks to send and receive funds is known as Ripple (Ripple is the actual technology that supports the network) but the name of the cryptocurrency that runs on the top of the Ripple blockchain is the XRP which can be used to represent a value.
The ripple platform does not require any third parties or intermediaries to verify the movement of funds, this makes it possible for people to send and receive their XRP coins on individual basis.
You can create global payments with this platform and also build your own financial solution.
PERFORMANCE OF RIPPLE
Talking about the performance of the ripple block chain, there are some clear differences to distinguish it from the ethereum block chain. When a user of Ripple sends XRP coins to another person, it will take an average of 4 seconds before the transaction is verified. Transaction rate or fees for the Ripple platform is also significantly lower as there is a standard rate of 0.00001 XRP for each transaction.
In terms of performance, Ripple has proven to be a better block chain for processing transactions, this has made ripple to be suitable for the cross-border payments industry they are targeting.
Ethereum was lauched in the year 2015 (3 years after Ripple), it was founded by a Russian-Canadian developer named Vitalik Buterin.
Many people refer to Ethereum as another form of Cryptocurrency, apart from Bitcoin. However, Ethereum is also a block chain platform. With Ethereum you can write codes using the Ethereum virtual machine run time environment.
Ethereum also does not require a third party to verify transaction, this therefore means that Ethereum is decentralized i.e the network is not controlled by a company, a government not even an individual. Instead of third party verification, Ethereum transactions are verified by the Ethereum community which is referred to as ‘miners’. What miners does is that it connects a specialized device to the Ethereum network, this enables it to confirm transactions on the Ethereum block chain. Just like the Ripple block chain, the Ethereum block chain also has its own cryptocurrency referred to as Ether which can be written ETH for short. The ether does not have a maximum limit to the amount of ether that can be issued unlike the bitcoin which will be capped at a maximum amount of 21 million coins. According to the founder of the Ethereum block chain; this amount will soon be capped to about 100 million coins.
PERFORMANCE OF ETHEREUM
When a user wants to transfer funds to another individual, the Ethereum block chain can do this in approximately 16 seconds, no matter the location of both the sender and the receiver of the fund. This has proven ripple to be four (4) times faster than the Ethereum as the ripple goes for an average of 4 seconds.
Although ripple is faster than ethereum, Ethereum has proven to be faster than the Bitcoin which normally takes 10 minutes. Ethereum just like bitcoin has over time gained a lot of popularity and this has caused transaction fees to start becoming expensive. Even outside of the block chain industry, each platform has a maximum amount of transaction it can scale. For instance, the payment issuer visa is capable of processing a maximum of about 50,000 transactions per second, which is more than it needs to process. Ethereum is only able to process about a maximum of 15 transactions per second, which is still far behind, if it is going to be on a global basis there will be need for a lot of improvements.
Haven gone through the history of these two block chain platforms and their performances, you must seen a lot of comparisons but never-the-less, I will like to make a brief comparison between these two platforms in the table I will be making below.
Ripple started in 2012
Ethereum started in 2015
Ripple is able to perform about 1,500 transactions per second
Ethereum is able to perform 15 transactions per second
The market value for Ripple is about 18 billion
The market value for Ethereum is about 44 million
Transaction charges for Ripple is $0.01
Transaction charges for Ethereum is $1
Am sure by now, you must have gotten a whole lot of clear difference between these two block chains, so when next you want to invest, you’ll have a clear picture what the platform is all about.