Introduction
Ethereum (ETH) and Ripple (XRP) are amongst the most well-known cryptocurrencies outside of the ubiquitous Bitcoin. ETH launched in 2015, while XRP began in 2012, meaning both tokens are well established. Both differentiate themselves through fast transaction processing, low fees, and sustainability, and both consistently appear towards the top of virtual token market capitalisation lists.
Despite their similarities, Ethereum and Ripple have notable differences. They utilise different consensus mechanisms, offer unique feature lists, and significantly diverge in their tokenomics. One ETH is worth thousands of dollars, while one XRP rarely exceeds US$1. Let’s explore the differences between these two heavyweights in the crypto community.
Key Differences Between ETH and XRP
Ethereum Overview
While Ethereum is technically the name for an open-source platform, ETH (or ‘ether’), is the platform’s native cryptocurrency. Co-founder Vitalik Buterin introduced Ethereum in a 2013 white paper, issued an initial coin offering (ICO) in 2014, and launched the platform in 2015.
Ethereum extends blockchain technology to facilitate smart contracts and decentralised applications (dapps), beyond mainly being a store of value. Today, the Ethereum blockchain is the most-used blockchain platform, featuring dapps spanning smart contracts, non-fungible tokens (NFTs), play-to-earn (P2E) gaming, and more.
The Ethereum protocol has undergone numerous updates since its launch, with the most notable ‘The Merge’ (2022), a switch from the Proof of Work (PoW) consensus mechanism to Proof of Stake (PoS), which enhanced network security while reducing transaction costs and energy consumption.
Check out ETH’s current value and recent price trends.
XRP Overview
XRP is a digital asset that’s native to the XRP Ledger (XRPL) — an open-source, permissionless, and decentralised blockchain. Created in 2012 specifically for payments, XRP can settle transactions on the ledger in 3–5 seconds. It was built with the aspiration to be faster, cheaper, and more energy-efficient than older digital assets. XRPL was engineered by Jed McCaleb, Arthur Britto, and David Schwartz in June 2012, joined shortly thereafter by Chris Larsen, and the group established the company NewCoin in September 2012 (renamed as OpenCoin in 2013 and now named Ripple).
Check out XRP’s current value and recent price history.
Ecosystem Comparison: ETH and XRP
ETH and XRP’s Consensus Mechanisms
Ethereum’s PoS consensus mechanism is straightforward. Validators, who are responsible for verifying new blocks and occasionally proposing new ones, stake ETH in a smart contract on the Ethereum network. A security measure called ‘slashing’ protects the network by destroying a validator’s stake if they attempt to defraud it.
Ethereum’s network saw a 99% power consumption decrease after switching to PoS from PoW, as it no longer has miners (which are used for PoW mechanisms) verifying transactions. Additionally, PoS consensus is more secure than PoW in terms of preventing 51% attacks, since an attempted 51% attack would cost more, making it difficult to achieve.
Ripple operates a unique consensus mechanism based on the Federated Byzantine Agreement (FBA), where worldwide validators propose blocks and verify transactions with no staking required. Validators are drawn from the Unique Node List (UNL), a group of trusted nodes on XRPL. This system is secure, and XRP is carbon-neutral, but it compromises decentralisation to some degree because a relatively small number of node operators hold all the power.
ETH and XRP Scalability
Both blockchains are highly scalable. Ethereum relies on level-2 blockchains for scale, called ‘rollups’, which batch transactions together off-chain and send the output to the Ethereum network. This reduces their computational load. Similarly, a randomly selected committee of validators processes transactions to keep the network’s load manageable. Ripple’s blockchain can handle up to 1,500 transactions per second compared to Ethereum’s 15–30, making it one of the fastest and most scalable in the world.
Tokenomics Comparison
ETH Use Cases
ETH is the currency of choice to pay ‘gas fees’ for dapps built on the Ethereum network. Examples include play-to-earn (P2E) video games (such as Gods Unchained), an NFT marketplace, and smart contracts. Developers continuously add dapps to Ethereum’s ecosystem, creating new ways to use ETH.
ETH is amongst the most popular cryptocurrencies, so exchanges offering crypto trading pairs frequently support it. Reputable platforms like Crypto.com make it easy to swap ETH for Bitcoin, for example. Many traders also purchase altcoins using ETH since there are many altcoins that share an ecosystem through the ERC-20 protocol.
Acceptance as a Payment Method
Many online retailers accept ETH, including Overstock (home goods and furniture), Newegg (electronics and computer hardware), and Travala (travel bookings).
XRP Use Cases
XRP facilitates borderless transactions between financial institutions, and Ripple has partnerships with multiple banks and payment processors, including DZ Bank, LemonWay, GMT Advanced Financial Services, and BBVA Switzerland.
Likewise, XRP is available on trustworthy exchanges and may be swapped for fiat currency or cryptocurrencies as a digital value store.
Acceptance as a Payment Method
Online retailers accept XRP, including AMC Theatres, Play-Asia.com, and Ace Jewelers, which all accept XRP payments.
Notably, XRP may see a drop in some transactional usage due to the launch of Ripple USD (RLUSD), a stablecoin that exchanges at a 1:1 ratio for US dollars. It will launch on the XRPL and Ethereum blockchains, making it more widely accessible, and its value won’t fluctuate, making it more suitable for transactions between financial institutions. XRP holders may adopt RLUSD since it offers the benefits of blockchain technology while streamlining transactions. At the time of writing, a launch date has not been announced yet.
Key Pricing Moments
Both Ethereum and Ripple have storied histories with significant price-altering events. Below is a quick timeline for each.
Ethereum — Key Price Events
| 2014 | The ICO debut. Ethereum is crowdfunded through an ICO, minting about 50 million ETH at around $0.30 per coin. |
|---|---|
| 2016 | The DAO Hack. The first decentralised autonomous organisation (DAO) was a venture capital fund built on Ethereum, though its code base was vulnerable, leading to a hack worth over $60 million. Ethereum’s price fell from the low $20 range to around $6 before eventually recovering. |
| 2017–2018 | The ICO boom. The popularity of launching new coins using Ethereum led to an all-time-high (ATH) of nearly $1,400 by the middle of January 2018. |
| 2020 | The decentralised finance (DeFi) wave. After the ICO boom, Ethereum faltered in 2019, but it recovered thanks to the demand |
| 2021 | The NFT boom. The mainstream popularity of NFTs saw Ethereum reach a new ATH of over $4,800 in November 2021. |
| 2022 | Ethereum 2.0 (‘The Merge’). The September switch from PoW to PoS was a ‘sell the news’ event, resulting in a price drop, though ETH’s price recovered within a few months. |
| 2014 | 2016 |
|---|---|
| The ICO debut. Ethereum is crowdfunded through an ICO, minting about 50 million ETH at around $0.30 per coin. | The DAO Hack. The first decentralised autonomous organisation (DAO) was a venture capital fund built on Ethereum, though its code base was vulnerable, leading to a hack worth over $60 million. Ethereum’s price fell from the low $20 range to around $6 before eventually recovering. |
| 2014 | 2017–2018 |
| The ICO debut. Ethereum is crowdfunded through an ICO, minting about 50 million ETH at around $0.30 per coin. | The ICO boom. The popularity of launching new coins using Ethereum led to an all-time-high (ATH) of nearly $1,400 by the middle of January 2018. |
| 2014 | 2020 |
| The ICO debut. Ethereum is crowdfunded through an ICO, minting about 50 million ETH at around $0.30 per coin. | The decentralised finance (DeFi) wave. After the ICO boom, Ethereum faltered in 2019, but it recovered thanks to the demand |
| 2014 | 2021 |
| The ICO debut. Ethereum is crowdfunded through an ICO, minting about 50 million ETH at around $0.30 per coin. | The NFT boom. The mainstream popularity of NFTs saw Ethereum reach a new ATH of over $4,800 in November 2021. |
| 2014 | 2022 |
| The ICO debut. Ethereum is crowdfunded through an ICO, minting about 50 million ETH at around $0.30 per coin. | Ethereum 2.0 (‘The Merge’). The September switch from PoW to PoS was a ‘sell the news’ event, resulting in a price drop, though ETH’s price recovered within a few months. |
Ripple — Key Price Events
| 2013–2018 | A slow start. XRP remained largely stable in its early years before gaining popularity in 2017 and reaching an ATH of more than $3.30 in early 2018. |
|---|---|
| 2020 | SEC lawsuit. A December 2020 lawsuit from the US Securities and Exchange Commission (SEC) saw XRP drop below $0.30. |
| 2021 | The 2021 bull run. Despite the pending lawsuit, XRP saw gains with the rest of the crypto market’s 2021 bull run, reachi |
| 2023–2024 | Lawsuit settlement. Ripple has remained relatively steady in the $0.40–0.70 range, with positive developments in the ongoing SEC lawsuit followed by an August 2024 settlement. |
| 2013–2018 | 2020 |
|---|---|
| A slow start. XRP remained largely stable in its early years before gaining popularity in 2017 and reaching an ATH of more than $3.30 in early 2018. | SEC lawsuit. A December 2020 lawsuit from the US Securities and Exchange Commission (SEC) saw XRP drop below $0.30. |
| 2013–2018 | 2021 |
| A slow start. XRP remained largely stable in its early years before gaining popularity in 2017 and reaching an ATH of more than $3.30 in early 2018. | The 2021 bull run. Despite the pending lawsuit, XRP saw gains with the rest of the crypto market’s 2021 bull run, reachi |
| 2013–2018 | 2023–2024 |
| A slow start. XRP remained largely stable in its early years before gaining popularity in 2017 and reaching an ATH of more than $3.30 in early 2018. | Lawsuit settlement. Ripple has remained relatively steady in the $0.40–0.70 range, with positive developments in the ongoing SEC lawsuit followed by an August 2024 settlement. |
Performance and Market Metrics
Ether is the second-largest cryptocurrency by market capitalisation at over $470 billion (at the time of writing). It has a circulating supply of about 120 million ETH with no max supply, making ETH an inflationary token. However, the Ethereum network offers many use cases, and demand historically tends to keep up with supply, giving ETH the second-highest value per token behind Bitcoin. Ether’s all-time high (ATH) was $$4,878.26 on 10 November 2021.
XRP currently is the fourth-largest cryptocurrency by market capitalisation at over $140 billion (at the time of writing). It has a circulating supply of over 57 billion XRP with a max supply of 100 billion. XRP is technically a scarce resource, but its large supply affects its underlying price compared to tokens with lower floats. It had an ATH of $3.40 per token on 7 January 2018.
Will XRP Overtake ETH in 2025?
As of late 2024, ETH has remained more popular by market cap and token price, and it has more room to increase in value since the available supply is lower and the dominance of the Ethereum network keeps developers launching new dapps. XRP supports smart contracts and NFTs through federated sidechains, but Ethereum and other tokens have a longer history of supplying these features. Ultimately, no one knows if Ethereum will remain in its position indefinitely.
Developments and Roadmaps: ETH and XRP
Ethereum’s Roadmap
Ethereum has an ambitious roadmap, calling for cheaper transactions, extra security, a superior user experience, and future-proofing. The upcoming implementation of Layer-2 scaling solutions like rollups could increase throughput and scalability.
Ethereum developers have the advantage of support from the nonprofit Ethereum Foundation, which creates documentation and resources including foundational concepts, information on the development stack, and step-by-step tutorials.
Ethereum’s Community
Social media can cause crypto price fluctuations, so keeping an eye on losing or gaining followers could indicate shifts in sentiment. Ethereum has a robust social media following, with 1.7 million followers on Reddit and over three million on X (as of this writing).
Ripple’s Roadmap
While the SEC lawsuit faces appeal, Ripple may be able to move forward with some improved regulatory clarity in the near future, and the team is optimistic about future adoption and expansion.
A dedicated team called RippleX provides XRPL developers with the infrastructure, tools, services, programmes, and support they need to create innovative dapps. The latest initiative is Project Clio: an XRPL API server optimised for scalability and availability. Clio will store ledger and transaction history data in considerably less space than the XRPL, giving the network more bandwidth. It also removes the burden of API requests from the mainnet, allowing XRP transactions to be processed more efficiently.
There is no specific time frame for Project Clio’s implementation. The most recent update of Project Clio was in October 2024 when XRPL introduced Version 2.2.2 of Clio, an XRP Ledger API server optimised for HTTP and WebSocket API calls.
Ripple’s Community
Ripple has a decent social media presence, with about 355,000 followers on Reddit and 2.6 million on X. The smaller Reddit community may suggest that the token isn’t as popular as it once was.
Conclusion: Ethereum or Ripple?
Comparing these two tokens is challenging because they offer different benefits. Ethereum applies blockchain technology to applications, while the XRPL was built to facilitate payments first and foremost. Both are good at what they do and available from trustworthy exchanges like Crypto.com.
Ethereum has historically offered greater price potential than Ripple, as well as the opportunity to earn passive income through staking, which may indicate a brighter future. Developers should also continue to prioritise Ethereum since it offers the most active blockchain for dapps.
Ripple processes transactions more quickly than Ethereum, making it a better choice for merchants interested in accepting crypto. XRP’s value fluctuates, but its relatively narrow range also offers price stability. Additionally, greater adoption in the financial space if and when Ripple achieves regulatory clarity makes it a potential speculative play.
It’s always best practise to research a token’s history, documentation, tokenomics, and risk profile when considering a purchase.
Due Diligence and Do Your Own Research
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