• Elias Zeekeh

Top 3 Cryptocurrencies | Alternatives to Bitcoin

Introductory comparison of Bitcoin versus the two largest alternative cryptocurrencies Ethereum and Ripple (XRP).


Hello ladies and gentleman welcome to the Elias Talks money v-log where I talk all things money. Today I'm going to talk about selecting the right type of cryptocurrency and which one is for is for you.

We all know the most popular crypto is Bitcoin, so I'm going to talk about it relative to the other two largest being Ethereum and Ripple.

Speaking first about Bitcoin and Ethereum. Both are decentralized meaning they are not controlled by a central authority, and both make use of block-chain technology which I describe in my previous video. But there are some differences. Bitcoin was created in January 2009 and was created with the purpose of having an online currency without central authority. Meanwhile, Ethereum was created with a purpose to be more than a digital currency.

As defined by investopedia:

"It enables the deployment of smart contracts and decentralized applications that can run without downtime, fraud, control, or interference from a third party. Ethereum has it's own programming language which runs on blockchain, enabling developers to build and run distributed applications."

What are smart contracts? Rules that codify business logic by:

Storing , verify , and self execute them. Vending machine is the most typical example that people provide. Vending machine has a set of rules. You put in a certain amount of money, you select your snack, and out it comes. In a practical sense Ethereum smart contracts have been used for things such as ride sharing, sharing computer power (ex. Golem), and even gambling (ex. Augur).

In theory even though it's considered the number two cryptocurrency; Ethereum should not need to compete with bitcoin and actually can support the network through applications.

The ecosystem of Bitcoin is about 7 times larger than that of Ethereum.

Comparing now Bitcoin to Ripple (XRP). The key difference between XRP and Bitcoin is the speed. While Bitcoin can take minutes for a transaction to confirm, XRP transactions can take seconds. This results in lower costs. It is for this reason this reason XRP is known as a protocol for digital payments, and their payment system is being used by major banks.

Unlike Bitcoin XRP can't be mined. The coins are pre-mined and 1 billion coins are released each month until we get to 100 billion coins.

XRP is a sort of settlement system that resembles SWIFT, which is a service for international money and security transfers that is used by banks and financial intermediaries around the world.

Hence Ripple like Ethereum is not necessarily a competitor to Bitcoin. The primary use of the XRP is to facilitate the efficient transfer of other assets.

So hence say I have $1000 USD and I want to send that to Tom in Europe. I can use the current SWIFT system through my bank to send him the money. His bank would credit him the USD or the equivalent Euro. The challenge with the current system is that there would be high fees on both ends and it could take a few days to clear.

Meanwhile with ripple. That same $1,000 can be sent cheaply and in seconds over the Ripple network in the form of XRP tokens. Once the transaction is verified Tom can receive the amount in XRP or can convert it back to USD, Euro, or whatever currency he wishes.

The ecosystem of Bitcoin is about 20 times larger than that of XRP.

In conclusion, we can see that even though these currencies seem similar that they serve a different need all together. So one isn't necessarily better than the other.

That said if I was going to bank on one as far as it's future use it would probably be Ethereum at this moment. Why according to this 2019 article 32 of the 50 companies integrating blockchain technologies are using the Ethereum platform. These include JPM to launch a digital USD, Amazon with AWS, and Microsoft Azure itself is built on Ethereum to which it can add Ethereum based applications in the future.

So you've got a top US bank embracing it and two of the largest cloud players which is an area of very high growth. XRP is also getting adoption from financial institutions, but I'm going with Ethereum because it appears it has a wider set of things.

Beyond what I mentioned as far as ride sharing and online gambling, some other applications that have been contemplated have been settling real estate transactions so like everything from handling the cash transaction to transferring the title of the home essentially cutting out lawyers, and even similarly for the sale of vehicles which essentially can cut out the need of intermediaries to help settle these transactions and make them much more efficient. It is something that could potential disrupt many industries. Even things we haven't even contemplated yet.

Consult your own financial advisor before making a decision.

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