Ethereum and Ripple/XRP are both great investments, they have both held the Number 2 spot behind Bitcoin in terms of market capitalisation and they also have working products.
Now to answer the question about which one is the better product, first we will need to look at the benefits of both cryptocurrencies as well as looking at a third option.
Ethereum/Ether/ETH
Ethereum is a blockchain based development platform that enables the deployment of decentralised applications (dApps) and smart contracts.
The most well known use of Ethereum’s smart contract feature is crowdfunding through Initial Coin Offerings (ICO’s), with hundreds of multi-million dollar ICO’s having taken place on the Ethereum blockchain.
These ICO’s lead to the birth of new cryptocurrencies which use Ether (ETH) to pay for transaction fees, raising demand for Ethereum’s cryptocurrency.
Decentralised Applications are another factor that can affect the value of Ether since in-app or in-game items will be valued in Ether, for example the CryptoKitties dapp allows people to buy virtual kittens which are worth a certain amount of ETH.
So you when you have:
- Companies executing smart contracts (which need ETH)
- People making tansactions using cryptocurrencies built on Ethereum (which need ETH for transaction fees)
- People buying in-app/in-games items (which are bought using ETH)
You have a recipe for wide adoption and demand of the ETH cryptocurrency, on top of that Ethereum has the first mover advantage for it’s use case, it is the most well known and trusted blockchain development platform.
Ethereum = Blockchain
Ether/ETH = Cryptocurrency
Ripple/XRP
Ripple’s cryptocurrency (XRP) is unique in that fact that:
- It cannot be mined
- Since it cannot be mined, transaction fees don’t need to be paid to miners
- Since miners don’t need to be paid transaction speed and costs have been drastically reduced
- Transactions take 2–3 seconds to complete
- Transactions cost 0.00001 XRP (10 drops). I won’t even bother converting this into USD or GBP since the cost is so small it won’t be worth the time. It’s basically a small fraction of a cent.
As well as the above benefits, Ripple has two working products that use XRP:
xRapid
Commercial product that allows banks to use XRP to transfer money globally, taking advantage of XRP’s low costs and high speeds.
With xRapid banks won’t need to go through exchanges and personal wallets to access XRP’s benefits.
xCurrent
Enables banks to transfer money globally whilst being able to track how and where it moves.
Ripple/XRP has also outlived thousands of altcoins and maintained a Top 5 position (in marketcap) since it’s release in 2013.
Just think about, XRP has been a Top 5 coin since it’s release and maintained that position for over 5 years.
In 2013 Ripple was the third highest valued cryptocurrency in marketcap ($33k marketcap) behind Litecoin ($52k marketcap) in 2nd place and Bitcoin ($1.1m marketcap) in 1st place.
Ripple Labs = Company
Ripple = Blockchain
XRP = Cryptocurrency
Stellar Lumens/XLM
We have looked at Ethereum (Blockchain development/ICO platform) and XRP (Ultra-cheap, ultra-fast transactions), now we have a cryptocurrency that does both.
Stellar Lumens was created by Jed McCaleb who was the co-founder of Ripple/XRP, this may explain why XLM (Stellar’s currency) can boast:
- Transaction times of 3 seconds on average
- Transaction costs of 0.00001 XLM which is also small fraction of a cent
- The transaction fee only exists to prevent DDoS/Spam attacks, apart from that, transactions are virtually free
So Stellar/XLM is similar in functionality to Ripple/XRP but it also functions a blockchain development platform where developers can:
- Deploy decentralised applications
- Deploy smart contracts
- Crowdfund through an ICO
The Stellar Network also functions as a decentralized, distributed exchange where any type of asset can be traded as long as it has been added to the Stelalr network.
For example if John wanted to transfer GBP to Amy, but John only has USD, an offer is submitted the distributed exchange selling USD for GBP. This offer then forms an order book.
The Stellar network uses the order book to find the best exchange rate for this transaction, which will reduce the fee paid by a user.
Stellar Lumens = Blockchain
Lumens/XLM = Cryptocurrency
Final Thoughts
Ethereum and Ripple are both good investment choices, both have working products, strong teams, strong partnerships, alliances and respective foundations.
They have also outlived many cryptocurrencies and held Top 5 positions when it comes to overall market capitalisation (or total value of the cryptocurrency).
In terms of which is the better investment? I would recommend investing in both, these are two very different cryptocurrencies with different aims, different teams and different partners.
If you had the choice between eating apples or oranges for the rest of your life or being able to eat both, what would you choose?
Finally I would also like to recommend Stellar Lumens since it combines the strengths of both crypocurrencies as well as being home to it’s own distributed exchange.
If you decide to invest into Ethereum (ETH), Ripple (XRP) or Stellar Lumens (XLM) you can use CEX to invest directly.
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