XRP vs Bitcoin: who wins?

In this post:

TL;DR Breakdown

  • XRP transaction speed and costs better than Bitcoin
  • Bitcoin hits ATH of $35,000 – making Satoshi Nakamoto 33rd richest person/party in the world
  • XRP beginning to decouple from BTC price trend
  • Proof-of-Work limiting and taxing on the environment
  • Lack of scalability in Bitcoin countered by XRP versatility

XRP vs Bitcoin: in recent news

Amongst the All-Time-Highs (ATH) Bitcoin (BTC) has seen in recent weeks – particularly on its 12th Birthday yesterday – we have seen BTC price fall over 10 percent in the early hours of January 4th, 2021.

Falling from $35,000 to lows of almost $27,000 today, one aspect was steadily made clear; XRP has been slowly decoupling from the Bitcoin price trend. As such, this opinion piece will seek to address the differences between XRP and Bitcoin, and ultimately, which is better.

XRP vs Bitcoin: transaction speeds

Transaction speeds are at the heart of all financial transfers. Customers/users want an asset/currency that can move their money swiftly and safely from point A to point B in record timing. When we compare XRP vs Bitcoin, the odds are heavily in XRP’s favor.

  • XRP transaction speed: three to five seconds.
  • Bitcoin transaction speed: varies between 10 minutes and one hour +

When conducting transactions, XRP can carry out 1500 transaction per second. In contrast, Bitcoin is only able to carry out seven per second.

XRP vs Bitcoin: transaction costs

The second most important aspect of a transaction; cost.

Each transaction on a blockchain or alternative system often charges a ‘gas’ fee for the facilitation of the transaction. When compare this transaction cost between XRP and Bitcoin, the difference is quite stark.

  • XRP transaction cost on average: $0.0004 per transaction.
    • 10,000 XRP transactions = $4
  • Bitcoin transaction cost on average: $8 per transaction.
    • 10,000 BTC transactions = $80,000

Once again here, despite the Bitcoin holding over 70 percent dominance and increased volume, XRP takes the lead on transactional supremacy in terms of efficiency.

XRP vs Bitcoin: node locations and decentralization

One of the main purposes of cryptocurrencies is to address the financial inefficiencies of fiat and cash. The other and often discussed is decentralization.

For an explanation on what Decentralized Finance (DeFi) is, check our guide here.

One clear concern when it comes to Bitcoin’s decentralization is the fact that over two-thirds of its nodes (servers) are situated in China. The core ambition of decentralization is to dismantle the traditional centralized systems such as world banks to give individuals worldwide more control of their own finances. This eliminates middlemen and the need for intermediaries.

XRP has around 150 nodes so far – far fewer but more efficient nodes than Bitcoin – of which around 70 are Ripple-owned/established. These nodes are more spaced out globally than Bitcoin.

If over 60 percent of Bitcoin nodes are located in one country, that grants a majority to a single body – therefore preventing true decentralization.

XRP vs Bitcoin: electricity costs and sustainability

The aspect of comparison is fairly straightforward and easy to compare.

Bitcoin enlists the PoW protocol which involves electricity costs via mining hardware and software. Though much of this cost is sourced through sustainable energy in China, that does not represent other parts of the world ‘mining’ bitcoin.

In contrast, XRP function via a restricted number of nodes globally and uses a pre-mined XRP utility token to conduct and facilitate financial activity. This does come with an electricity element, but is green by nature and not taxing on electrical supply.

Again, XRP trumps Bitcoin here.

XRP vs Bitcoin: mining Bitcoin vs pre-mined XRP

The Proof-of-Work (PoW) protocol utilized by Bitcoin requires the interaction of ‘miners’ to mine Bitcoin before it becomes accessible to use/trade/buy/sell. On the other hand, XRP is pre-mined, meaning the total volume of XRP is already accessible.

This PoW Bitcoin protocol includes mining fees, slower transactions progressively over the years as blocks become more difficult to mine, and reduced supply with each halving event.

The issue with XRP being pre-mined is that it may indicate the creation of a financial venture. This could pose more risk to the integrity of the project in comparison to the PoW protocol involved in Bitcoin accumulation. Despite this, there is one rarely considered disadvantage and potential financial venture instigated within the origins of Bitcoin…

Satoshi Nakamoto, the anonymous founder of Bitcoin, essentially pre-mined the first 1,000,000 Bitcoins. This has recently made the individual/group (not known) the 33rd richest person/party in the world as Bitcoin reached its ATH of $35,000.

Nakamoto accumulated and removed one million Bitcoin from circulation, and to date, that accumulation has not moved except through rumors and hearsay. Bitcoin’s founder, in essence, despite believing in the project, has instigated a financial venture that now nets him/her/them a total of $35 billion.

Despite being less than five percent of the total supply of 21 million Bitcoin, can Bitcoin be considered decentralized when one person/party held an advantage from the start?

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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