Blockchain store information across the network of personal computers, making them not just decentralized but distributed. It means no central company or person owns the system, yet everyone can use it and help run it. It is important because it means it’s difficult for anyone person to take down the network or corrupt it. Any individual who runs the system uses his computer to hold bundles of records submitted by others, known as “blocks,” in a chronological chain. The blockchain uses a form of math called cryptography so that records can’t be changed.
Unlike traditional methods, blockchain enables peer to peer transfer of digital assets without any intermediaries. It was a technology created to support the famous cryptocurrency, bitcoin. The blockchain by itself has taken a life of its own and permeated a broad range of applications across many industries, including finance, healthcare, government, manufacturing, and distribution, and poised to innovate and transform a wide range of applications, including goods transfer, for example, supply chain.
A cryptocurrency is a digital currency that can work as a medium of exchange. Cryptocurrency use cryptography for securing and verifying transactions. It controls the creation of new units of a particular cryptocurrency. A cryptocurrency is a limited entry in a database that cannot be changed by anyone unless specific conditions are fulfilled. When an individual sends someone the special currency, the money goes directly to other people, removing the middleman. At the same time, the transaction is broadcasted to the entire network and recorded permanently, which means it’s almost impossible to fool the system and costs of making payments are lower, and transactions are faster across the countries. And even those people around the globe who don’t have bank accounts can buy or sell goods and participate in the global economy.
Blockchain’s first successful digital cash is known as bitcoin, which was introduced by Satoshi Nakamoto. With the help of bitcoin, an individual can send digital cash to anyone, even a stranger. Bitcoin is different from credit cards, PayPal, or other ways to send money because it doesn’t involve a bank or financial middleman,instead, most people in the world helping in moving the digital money by validating other’s bitcoin transactions with their personal
computers, earning a small fee in the process. Bitcoin ,also known as BTC , is a digital currency that is used and distributed electronically.
Bitcoin is a decentralized peer to peer network and not controlled by any person. No one can print bitcoin and it has limitation in its amount as 21 mln bitcoins can ever be created. Bitcoin uses the blockchain by tracking ownership over the digital cash, so only one person can be the owner at a time, and the cash can’t be spent twice, like counterfeit money in the physical world can. Bitcoin only exists electronically, and it doesn’t have a central issuing authority or regulatory body. Most importantly, there’s no organization deciding when to make more bitcoins, figuring out how many to produce, keeping track where they are, or investigating fraud.
Ripple is an open payment network for digital currency as well as holding company. Ripple may be a privately held income positive company that aims to make and enable a worldwide network of monetary institutions and banks to use ripple software to the value of international payments. Ripple calls this global network using ripple software the web users. Ripple is both platform and currency. Ripple is defined as an open-source protocol designed for allowing fast and cheap transactions.
XRP is a token used for transferring of value across the Ripple Network. Ripple Network involves banks and money services businesses that utilize a solution developed by Ripple for providing a frictionless experience so that money can be sent all over the globe. XRP is the mediator for cryptocurrencies and fiat exchanges. An open-source product created by ripple is known as XRP ledger. It was created to sell a point of friction in international payments. XRP can be used by banks to control liquidity on-demand in real-time and by paying providers to expand into new markets provide faster payment settlement and lower foreign exchange cost.
The cryptocurrency industry started with bitcoin, and it is the most well-known cryptocurrency. Bitcoin is a digital currency that has the aim of paying for services and products, whereas ripple was created for banks and payments networks as a money transfer system. Ripple has the capability of creating a direct asset transfer system in real-time that is cheaper and secure than the existing payment methods such as SWIFT payments. Bitcoin depends on blockchain technology, while ripple uses a distributed consensus ledger known as XRP. In short, Bitcoin was designed for peer-to-peer digital cash, whereas Ripples aim to make international transactions cheaper and faster for banks.
The transaction speed of bitcoin is ten minutes, while ripple takes just a few seconds that concern with the traditional financial system.
The primary focus of bitcoin is to be the decentralized digital currency, whereas the primary focus of ripple is to pay in any currency. There are 21 million bitcoins mined, whereas there are 100 billion ripples pre-mined. Bitcoin requires mining, while ripple does not require mining. Bitcoins payments made without a trusted third party, while ripple payments can be made with a trusted third-party gateway. Bitcoin handles only 3 to 6 transactions per second, while ripple consistently handles 1,500 transactions per second. Bitcoin transactions may take more than 15 minutes for confirmation while ripple transactions confirm more quickly, typically in under 15 seconds.
The symbol of bitcoin is BTG, whereas the symbol for ripple is XRP. Bitcoin is a decentralized system and maintained by a group of enthusiastic developers. Bitcoin does not govern by the bank, government, or any third party. Ripple is developed by an official company that has set goals and investors called the Ripple company that founded in the year 2012.
Bitcoin is utilized in the capacity of money whereas, ripple is utilized for other currencies or commodities transfer such as oil or gold over the network. Bitcoins have centralized currency exchange, whereas the ripple network has decentralized currency exchange. The transaction cost of bitcoin is $40, whereas the transaction of the cost of ripple is $0.004.
Bitcoin is used for low commission currency exchange. As most of the currencies can’t directly convert to each other, therefore, banks use the US dollar as a mediator. There is a double commission for converting currency A to USD, and USD to currency B, here Ripple can also be used as a mediator as it is much cheaper than USD.
Blockchain and Cryptocurrency Law Practice 