One needs to remember that investing in crypto coins or for that matter tokens is highly speculative and the market is indeed largely unregulated. Anyone who considers it needs to be prepared to lose their entire investment.
Ripple v Bitcoin
Bitcoin has been acknowledged as a digital currency meant to be as a means of payment for goods and services. Ripple is, on the other hand, a payment settling, currency exchange and remittance system that is intended for banks as well as payment networks. The idea is to provide a system for direct transfer of assets (e.g. money, gold, etc.) that do settle in almost real-time and is also a cheaper, more transparent and secure alternative to transfer systems that are used by banks today, such as the SWIFT payment system.
Bitcoin is indeed based on blockchain technology, while Ripple does not make use of blockchain but also uses a distributed consensus ledger, thus making use of a network of validating servers and crypto tokens called XRP (sometimes referred to as Ripple blockchain payments app).
XRP tokens
XRP – which is, in fact, the actual cryptocurrency – is a token which is made use of on the Ripple network to facilitate transfers of money between different currencies. Existing settlement systems generally do make use of US dollars as a common currency for converting between other currencies. This does incur currency exchange fees and also takes time – which is why bank transfers between accounts in different countries do often take up to three days to process.
Bitcoin
Bitcoin which has been invented in 2009, is the largest cryptocurrency by value. Bitcoin is considered to be a “peer-to-peer version of electronic cash that does allow online payments to be sent directly from one party to another without actually having to make use of a financial institution.
It does run on a technology that is referred to as blockchain, which is a digital ledger of activity that cannot actually be tampered with. It is decentralized as it has no central authority that is governing bitcoin.
But because of the frenzy around bitcoin, transaction times have spiked, which could go against the original aims of the cryptocurrency.
Some of the retailers in Japan have begun accepting bitcoin as a payment and there are even instances of real estate firms accepting it too. But there is little evidence of widespread use of bitcoin for payments.
Ethereum
Ethereum is the name of a blockchain company that has indeed created the digital token ether. But Ethereum and ether are now, of course, made use of to refer to the cryptocurrency.
Ether is rather backed by a blockchain, much like bitcoin, but the technology is slightly different and is also aimed at a specific use case: smart contracts.
Judging by trade finance deal, each party in the deal does have a paper or digital copy of the contract and thus needing to update it individually. It is indeed an arduous task and prone to error.
