Fifteen percent of Americans now own some form of cryptocurrency. Many more plan to buy some in the next year or so. If you’re one of them, you might be wondering which coins are best to invest in.
You might wonder if you should choose a tried-and-true staple like Bitcoin. Maybe you’re exploring a few lesser known coins, like XRP.
So, when it comes to Bitcoin vs XRP, which one is the better investment? This guide will help you make the right choice for your portfolio.
What Is Bitcoin?
Bitcoin is the best-known cryptocurrency in the world. When people talk about investing in crypto, they’re often thinking about this coin.
Bitcoin the company offers a public blockchain ledger. That supports the bitcoin currency. Blockchain technology is used to secure transactions, which makes it easier and safer to pay for goods and services.
The primary advantages in blockchain technology are its security. By using a public ledger, transactions can be validated by the network.
The network relies on miners for time and computing power to confirm transactions. As a reward, they’re paid in BTC.
You can also buy and sell BTC on the markets. You need to have a crypto wallet to store your purchased coins in.
You may be able to access those funds to pay for some goods and services. Bitcoin and other cryptocurrencies aren’t widely accepted yet.
What Is XRP?
XRP is the cryptocurrency coin offered by the company Ripple. Ripple has built its name on payment settlement, asset exchange, and remittance systems.
It works somewhat like SWIFT, which is a service for international transfers of money and securities.
Unlike Bitcoin, Ripple uses distributed consensus to confirm transactions. The network conducts a poll of servers or nodes. If all nodes agree on the validity of a transaction, then it’s authentic.
If any of the nodes disagree, however, the transaction is not considered valid.
The mechanism makes it much faster for the Ripple network to confirm transactions. It takes seconds for Ripple to confirm a transaction, whereas Bitcoin may take minutes.
The cost of XRP transactions is typically lower as well. Ripple also has a much larger supply of pre-mined coins.
Bitcoin vs Ripple: Which Is Better?
The Bitcoin network is certainly popular, but that doesn’t mean it’s the best network out there. The public mining structure makes the Bitcoin network much slower than Ripple.
That also contributes to the higher cost of transactions on the network. There’s also some truth to the idea that Bitcoin is inefficient. This is clear in the fact there are so few coins compared to Ripple.
The mining activity is also energy-intensive, since it uses so much computing power. There are some concerns Bitcoin isn’t sustainable.
One point in Bitcoin’s favor is that the structure is truly public. No one owns Bitcoin’s network.
By contrast, the Ripple network is owned by a private company. It’s still a decentralized system, but the network is privatized.
That said, Ripple is much faster and has lower costs associated with transactions. It’s also popular with banks and financial services providers for those reasons. Ripple is particularly well-noted among financial providers for easing cross-border and cross-currency transactions.
Bitcoin vs XRP: Which Is the Smarter Investment?
Now for the bigger question: which of these two cryptocurrencies is the better investment? Would you be smarter to pick XRP vs bitcoin, or are you better off sticking with the household name?
Both XRP and Bitcoin have their backers. Those who say Bitcoin is the smarter investment point to growing acceptance of cryptocurrencies. Bitcoin is typically the most accepted coin.
That’s likely due to name recognition. People associate BTC with crypto and vice-versa. This widespread recognition has increased demand for Bitcoin, as well as acceptance.
That, in turn, makes it more likely that businesses will adopt Bitcoin before other coins. This adoption, coupled with interest from investors, will keep demand high. That could lead to price increases and a return for you if you decide to sell Bitcoin.
Don’t count XRP out yet though. As noted, the Ripple network has some key advantages over Bitcoin. It’s faster, cheaper, and more environmentally friendly.
Its unique consensus mechanism could also make it more secure than Bitcoin. The fact that Ripple is gaining traction in the financial sector is another huge point in its favor.
If the financial services sector decides to back Ripple and XRP, it will become a more accepted form of payment. In turn, it could eclipse Bitcoin in popularity and demand could increase exponentially.
That could be great news for early investors like you. Since XRP is less popular and less in demand than Bitcoin, you can buy it for less. It also means you may see much higher gains as Ripple and XRP continue to gain acceptance.
XRP might be the smarter investment right now for many people. The price of Bitcoin is high and trending higher, which means you may only be able to buy a fraction of a coin. With XRP, you may be able to buy whole coins before the currency values like Bitcoin did a few years ago.
With the financial sector backing it and some key advantages, XRP is likely to continue making waves. Investing now could pay off big time.
Future-Proof Your Investments
If you’ve been debating about Bitcoin vs XRP, this guide should have given you a good idea of which one is the smarter investment right now.
Of course, the best move is always to diversify your portfolio, and that advice remains true in cryptocurrency investing too. There are many coins out there, and some will fail. Others will become the next Bitcoin, and you don’t want to miss out.
Is XRP the next Bitcoin? Only time will truly tell, but investing in both Bitcoin and XRP could be a smart move. You can diversify your portfolio with more coins as well.
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