WHAT’S THE DIFFERENCE BETWEEN XRP AND ETHEREUM?
Ether (the coin created by Ethereum) and Bitcoin are the two cryptocurrencies currently leading the pack. They’re based on very similar technologies and are both borne out of a desire to remove third parties such as banks and financial institutions from transactions.
However, Ethereum also aims to protect personal data from hackers and to compete against web-based companies that house data.
The Ethereum blockchain allows for smart contracts to be programmed into its system.
A ‘smart contract’ is a contract that’s generated automatically. For example, you may pay a lawyer to generate a document for you. A smart contract will do this instantly, removing the need for an intermediary person or institution.
This means you can use Ether not only for transactions, but also for stock, property and anything else that requires an intermediary institution.
Ethereum’s smart contract also makes it the cryptocurrency of choice for companies raising funds through Initial Coin Offerings. An Initial Coin Offering is where new cryptocurrencies get traded for more established ones like Ether, in the hope that the new cryptocurrency will increase in value.
Ether is also volatile. On the 21st of June 2017, Ethereum lost virtually all of its value in a flash crash. Although XRP hasn’t suffered any major crashes yet, it still depends on the centralised financial institutions that Bitcoin and Ethereum seek to bypass.
XRP has fast network speeds, high scalability, and minimal transfer costs. Time will tell whether that’s enough to make XRP the next big thing.