What is the difference between Ripple and Bitcoin?

Bitcoin is a decentralised peer-to-peer electronic cash. Ripple is a bank-to-bank private network which allows instant cross-border settlements. Ripple has a 4-second transaction confirmation time, which is extremely fast compared to Bitcoin’s 10-minute confirmation time. Ripple can handle 1500 transaction per second with a maximum limit of 50000 transactions per second. Whereas Bitcoin can only handle up to 7 transactions per second.

Like Bitcoin, most of the cryptocurrencies are created to eliminate middlemen or centralised authorities such as banks and financial institutions. Ripple aims to facilitate the payments for banks.

Bitcoin blockchain achieves its security through the process called mining where miners compete to solve mathematical problems. Miners spend a lot of computing power to mine a block and the fastest one to find one gets rewarded. Each new mined block reduces the likelihood of a transaction being reversed and double spent. Ripple doesn’t have miners. There is no built in incentive for transaction validators, thus consensus is achieved through a voting process. This means that the Ripple network is less secure, so in order to ensure security, it needs a higher degree of centralisation.

There will only ever be 21 million Bitcoins of which 79.95% is in circulation. Whenever a new block is mined, 12.5 Bitcoins are created and rewarded to the miners. Mining reward is halved every 4 years. The last Bitcoin would be mined in 2140.

There is a total of 100 billion XRP coins in existence. They are all premined, which means all XRPs  were created at the time of the network’s launch and they all belonged to Ripple Inc. The company later has distributed some of the XRPs to investors, exchanges and other institutions. As of this writing, 38.7 billion XRPs are in circulation.  The remaining 55 billion Ripples are placed in escrow contract. The contract will release 1 billion XRPs every month.