Although Ripple shares some similar characteristics with Bitcoin, it is a vastly different project. As a cryptocurrency, it uses cryptography to secure transactions, but it doesn’t actually have a public blockchain.

Instead, it has a network of nodes that validate transactions, but these are not necessarily anonymous P2P nodes, they are participating banks and financial institutions. Ripple’s coins, known simply as Ripple or XRP, were not mined into existence, they were simply issued.

And unlike Bitcoin which exists by virtue of a distributed network of participants, Ripple is not only the name of the coin, it is also the name of the company that developed the protocol. Unlike Bitcoin’s pseudonymous founder, Satoshi Nakamoto, the Ripple founders developed Ripple in the open, with Ripple even applying for and being awarded a New York BitLicense to operate.

So from the get-go, we see that this is an apples and oranges comparison.

So, What Exactly is Ripple?

Ripple is considered a bit of an oddity among cryptocurrencies because it doesn’t have its own public blockchain. Internally, the XRP Ledger network runs on an internal blockchain which they call an “Enterprise blockchain” ledger, it doesn’t use proof-of-work and little else is known about it.

Ripple was originally designed as an asset transfer system, for the purpose of sending instant and secure transactions across network participants. The idea was that anything digital of value could be transacted, including fiat, cryptocurrencies, commodities, even loyalty points and mobile credits. The native Ripple cryptocurrency token was added at a later stage of development and can be used for settling trades on the network.

Ripple certainly doesn’t share the cypherpunk roots of Bitcoin and other cryptocurrencies, but by this very virtue it was instantly more appealable to banks, financial intermediaries and institutional investors seeking digital payments solutions.

Ripple received angel funding to develop its protocol. Early round investors include finance industry giants such as Andreessen Horowitz, Pantera Capital, Google Ventures, IDG Capital Partners and Santander InnoVentures.

Not being a typical blockchain and being managed by a company, it doesn’t really make sense to compare Ripple with Bitcoin, feature for feature. Ripple being centrally controlled, and with Bitcoin being a decentralized blockchain, there is not much of a point pitting them as rivals. If anything, similar to other networks like Counterparty and Omni, Ripple can be looked at as it’s own independent platform which may even complement the Bitcoin and other cryptocurrency networks. For instance, you can store, send and receive other currencies on the Ripple network. These balances are held in accounts, unlike XRP which is the native currency with no counterparty risk.

The Ripple project actually pre-dates the Bitcoin blockchain, and their mission from the beginning was not to offer an alternative to the world’s financial system, but rather to upgrade it and bring it out of the dark ages.

Ripple’s Key Specs and Features

• Instant Payments – The global payments infrastructure was built before the internet became commercially widespread. The key payments interbank settlement happens on the international SWIFT network and also on some smaller national networks more locally. Transfers and settlements can take a matter of days, and this is frightfully embarrassing in the digital age. By contrast, Ripple payments can bounce around the globe almost instantaneously.
• B2B Friendly Focus – as a company, Ripple is interested in engaging key players in the financial industry including banks and financial services providers. The network offers instant cross-border remittances and payments. All transactions on the Ripple network are designed to be compliant with the bank’s risk and privacy requirements. Anti-money Laundering (AML) and Know Your Customer (KYC) anti-terrorism compliance is built into each transaction.
• Full End to End Payments Service – A bank could use the Ripple network to send a cross-border payment directly from the sending customer’s bank account through to the receiving customer’s bank account on the other end. The Ripple network can handle the whole transaction, including the foreign exchange conversion. The Ripple network can also instantly calculate the cost of the transaction down to the nearest cent, and signal the both participating banks when the end customer have received their deposit for both banks to update their customer’s accounts.

Ripple vs Bitcoin: Other Key Differences

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Ripple payments are near instant as they are validated by Ripple nodes. Unlike Bitcoin, the Ripple currency is issued by Ripple Labs and not minted into blocks. To date, 38 Billion of the currency is circulating.

The eventual supply of Ripple will far exceed Bitcoins total coins by orders of magnitude. This is reflected in its price when you compare the relative scarcity of the two coins, that is Ripple’s 100 Billion coins versus Bitcoin’s 21 Million. At the time of publication, the Ripple currency was only a fraction of that of Bitcoin sitting at just under USD $0.22 cents. Even so, Ripple commands 3rd position in the overall market cap.

All 100 Billion XRP have been created. Of the 100 Billion, the founders of Ripple retained 20 Billion, with the remaining 80 Billion XRP allocated to Ripple Labs. Of these, only 38 Billion XRP have been released so far.

Ripple is super fast compared to Bitcoin and is able to perform 1000 transactions per second, compared to Bitcoin’s 3 tx/sec, and it can finalize an international transaction in 3 seconds, compared to the average block confirmation time of 10-minutes for Bitcoin.

Mixed Market Feelings

Cryptocurrency enthusiasts have had mixed feelings about Ripple from the very start.

Ripple has a very specific focus, and that is for it to be adopted by the banking system for cross-border, interstate and interbank payments and remittances. Ultimately, Ripple aims to be used in place of the interbank SWIFT network. Because of this, the price of Ripple is heavily influenced by any news that relates to bank adoption.

It is a cheap coin, so it has a massive upside potential. If it manages to become the bank’s choice of crypto, it will likely soar in value. But for Ripple fans, this event is sorely overdue and as time goes on, other competitors are also lining up to claim the same title. Ripple is already in live beta phase with 75 banks, and yet it is not the only project competing for the bank’s attention, with Digital Asset Holdings using Hyperledger technology and the R3 Consortium being the most well-known leading a pack of ‘would be’ blockchain-for-banks solution providers.

Final Thoughts

Ripple has solidified as a top 5 cryptocurrency and is almost as well known as Bitcoin. Regardless if Ripple becomes the number one blockchain-for-banks or not, there are plenty of other applications for its technology.  Unlike Bitcoin, it is business friendly as it complies with regulation. While Bitcoin relies on user adoption, Ripple is aiming for more widespread adoption in daily commerce. This makes it more attractive to investors that view cryptocurrencies like Bitcoin as vulnerable to future regulatory battles and therefore not likely to be adopted for general commerce.

If Ripple does manage to become the darling of the banks, its modest 20c price could quickly move into the dollars and eclipse the market cap of Bitcoin. So if you are looking for something with a potential massive upside, Ripple is certainly one to closely watch.

The post Ripple vs Bitcoin Comparison appeared first on CoinCentral.

Bitcoin’s shortcomings led to the development of the cryptocurrency Dash, but do Dash’s results live up to its lofty ambitions?

Bitcoin entered the scene in 2009 and developed a sizable network effect in a realm of little competition.  However, as the Bitcoin network grew and development standardized, improvements became difficult to implement.  Such changes require an overwhelming consensus from all network participants, thus creating numerous contentious debates, as has been witnessed recently in the Bitcoin scaling debate.  As a result, a lot of Bitcoin’s shortcomings are now solidified into the protocol, meaning that it can only maintain certain specific use cases.

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What Bitcoin blockchain weaknesses does Dash seek to overcome?

Bitcoin’s weaknesses include a block size limit that slows transaction processing time and a 10-minute block creation period that constricts Bitcoin’s real world transaction usage by users.

As an open source project, Bitcoin lacks a developer funding model, which leaves the development to be managed by volunteers or powerful interest groups.  Bitcoin also lacks a coherent governance mechanism that would allow for protocol changes to be easily agreed on and implemented.  The blockchain data validation is managed by low end-nodes on a voluntary basis, and there’s no financial incentive to upgrade to the latest hardware and software.

Bitcoin transactions also lack privacy. Data mining companies are becoming uncomfortably good at identifying the source of Bitcoin transactions.

As a result of these and other weaknesses, Bitcoin faces increasing barriers to market adoption and the dream of a true P2P electronic cash has been mired by endless debate and slow upgrades.

So what does Dash do better than Bitcoin?

The developers of Dash wanted to unleash a new blockchain, free of these ‘baked in’ weaknesses. Dash developers baked their new blockchain to be the world’s first self-funding and self-governed blockchain protocol, with instant payments running on a network of incentivized Masternodes. Here are some of the key ingredients Dash introduced that Bitcoin doesn’t have:

• Masternodes. Unlike Bitcoin, Dash introduced Masternodes to incentivize users with payments to secure the network and add cool transactional features like InstantSend. Masternode operators invest 1,000 dash to host a Masternode. Masternode operators get 45% of the reward for every Dash block that’s mined. Each operator receives their reward of around 7 dash each month.
• InstantSend. Instasend uses the instantX Masternode feature to send and confirm transactions in seconds. Bitcoin’s block propagation takes an average of 10 minutes, and 6 typical conformations for large purchases could even take an hour.
• PrivateSend. While Bitcoin transactions are pseudonymous and can be traced to their users, Dash introduced PrivateSend transactions that allow Dash users to opt for full privacy in their transactions.
• Self-Sustainable Decentralized Governance. While Masternodes are incentivized and can govern the blockchain with 1 vote per Masternode, the Dash blockchain is also self-funded. A portion of each block—currently 10%–is allocated to the Network Development and Promotion Budget. This means Dash developers and promoters receive payments for their contributions, unlike on Bitcoin where contributions are voluntary and unincentivized.

So what does the market think of Dash?

Despite its features, Dash is still catching up to reigning champion Bitcoin’s 5-year headstart. Dash ranks behind Bitcoin as the 6th biggest currency in terms of total market capitalization.

A coin’s market cap is one way of measuring the size of a cryptocurrency. The volatility of a crypto’s price influences the market cap of cryptos. Daily trade volume—calculated in USD—is argubly a more useful measure. Trading volume reflects how much a particular cryptocurrency is actually used. Bitcoin still reigns king here: Today Dash trade volume ranks 11th with $61.27 million behind Bitcoin’s $1.9 billion first place value.

Even daily trade volume does not give the full picture though, as much of it consists of trading activity on exchanges rather than real world purchases. This is an important distinction. Many exchanges use Bitcoin to trade so you so you would have to initially buy bitcoin to then trade for other cryptocurrencies. This may skew the figures, but it also shows the strength of Bitcoin’s first mover advantage.

With Bitcoin’s first mover advantage, Bitcoin  has become a clear market leader. This makes for a skewed and unfair comparison with all other cryptocurrencies. Yet, while looking at market caps and trade volumes, it is important to note that other cryptocurrencies that share similar features to Dash are sometimes higher up in the pecking order. Litecoin also generates new blocks every 2.5-minutes and has long held a higher market cap than Dash.  Monero, another privacy focused coin, released in the same year as Dash, has a higher daily trade volume. Ripple also has fast transaction confirmations and is firmly positioned in the top 5.

The Verdict

All this seems to suggest that simply introducing features that are an improvement on Bitcoin’s deficiencies is currently not enough for the market.  While Dash’s self-funded blockchain provides plenty of money to spend on development and marketing, Dash still seems to be struggling to attract second tier developers to build out the blockchain aftermarket infrastructure, like Point of Sale apps and an array of innovative wallets for users. Bitcoin and the leading cryptocurrencies such as Ethereum, Monero and Litecoin among others, have built more connections with secondary industry players that connect merchants and users.

It may be unfair to compare a cryptocurrency that is 3 years old with one that has been around for 8 years. It could be argued that at a similar stage of its development, Bitcoin was still an obscure computer science project, or ‘nerd money’. What is certain is that Dash has shown resilience and has rarely been outside the top 10 currencies since hitting the scene. Having developers and Masternode operators paid for their efforts directly by the blockchain, along with improved governance mechanisms,  certainly has positive implications for Dash’s long term expansion and agility in adding new features. As cryptocurrencies mature, there is plenty of space for many to establish their own markets. Instead of trying to pick an outright winner, it is probably more important to see which cryptocurrencies have the right fundamentals to survive and thrive. In those terms, Dash is well positioned to continue growing and innovating.

The post Dash vs Bitcoin: Has Dash Successfully Overcome Bitcoin’s Shortcomings appeared first on CoinCentral.

Then came Monero – private by default with untraceable transactions. It has an adaptive block size. It has its own codebase and is not simply another Bitcoin clone. Even its developers are mainly anonymous. Monero ticks most the permissionless digital cash boxes – is it all too good to be true?

In this Monero vs Bitcoin comparison, we’ll take a deeper look at Monero’s features that have helped it grow to a top 10 cryptocurrency.

Why Bitcoin lacks privacy and What Monero does about it.

Bitcoin is pseudonymous, meaning that users can transact without providing their identities. Instead of using real world identities as banks do, Bitcoin uses addresses to make transactions possible between wallets. The problem is that the addresses, along with the transaction information, all get stored on a public ledger. Although users can make transactions without attaching their personal identity, it is now widely known that the Bitcoin blockchain is being data mined by blockchain analysis companies. These companies are able to de-anonymize Bitcoin transactions with a high degree of accuracy.

Unlike Bitcoin, where you need to take extra steps to achieve anonymity, Monero has privacy turned on as a default setting. Untraceable transactions and anonymity are baked into the protocol.

As a side effect of anonymous and untraceable transactions, Monero is more fungible than Bitcoin. Fungible simply means that you can’t tell apart one coin from the next. Bitcoins are subject to being tainted. For instance, if a particular exchange has been hacked, or funds are stolen, the hacked or stolen Bitcoins can be tracked and subsequently blacklisted by exchanges or vendors. This can make a percentage of Bitcoins unspendable, which is not ideal for a digital representation of cash. Monero’s inherent untraceability makes this a non-issue.

How exactly does Monero achieve privacy?

Monero uses three different privacy innovations, namely, ring signatures, Ring Confidential transactions, and stealth addresses.

Ring signatures hide information about the sender, using a technique where a group of users sign the transaction. This obscures who the actual sender was.

Next, by using a technique known as RingCT, which stands for Ring Confidential Transactions, Alice can send Bob some Monero, and the only people that will ever know the amount sent will be Alice and Bob. Although the transaction is visible on the blockchain, there is no way to determine the amount transacted.

Lastly, Monero uses stealth addresses which adds privacy to the receiver of a transaction. Stealth addresses use ‘spend keys’ to obscure the receiver’s address. A sender is required to generate a spend key address for the receiver and send the Monero through this address. A ‘view key’ is then used by the receiver to display incoming transactions. This method means that while a transaction is recorded on the blockchain, only the sender and the receiver can determine where the payment was actually sent.

Monero vs Bitcoin: Other Key Differences

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Released in early 2014, it is understandable that Monero still has some catching up to do compared to Bitcoin which has been around since 2009. This is reflected in the two coin’s market cap differences, with Monero sitting in 9th place at the time of writing.

Bitcoin had a lot more time to build out its network, and it won’t be giving up its first mover advantage that easily. With Monero, however, the market cap comparison does not reflect the fact that Monero has a different use case than Bitcoin, a use case built around its privacy. Monero is now establishing itself as the ‘coin of choice’ for people that want privacy in their transactions or that want to use Dark Markets. Bitcoin lost flavor with Dark Market users who quickly switched loyalty when they realized that Monero took privacy a few steps further than Bitcoin ever could.

Monero is not a one-trick-pony either. Privacy aside, the Monero developers have been addressing some key issues that Bitcoin has found challenging.

Hard forks have proved dangerous in Bitcoin as they show major rifts in consensus and make protocol upgrades contentious. When it comes to upgrading the protocol, Monero has a policy of hard forking every 6 months. All users are given fair warning and are expected to upgrade their software, making upgrading a breeze.

Monero has a dynamic block size which can adapt to the network’s requirements, unlike Bitcoin’s hard capped limited block size. With dynamic block sizes, you also get dynamic fees. It takes an average of 2-minutes for the average Monero block to be mined, and for transactions to be confirmed – a clear advantage for retail like scenarios.

Miner centralization, due to the use of ASIC chips, is a problem that Bitcoin has not been able to avoid. Short of a contentious fork to change the Proof of Work algorithm, it looks like mining centralization is here to stay in Bitcoin. Monero uses mining algorithms that are ASIC resistant, meaning it can be mined using standard CPUs and GPUs, which keeps the mining decentralized.

How has the Market received Monero?

Monero saw incredible growth in 2016, where it was the best performing crypto for the year. It has a growing legion of fans. Many were originally Bitcoiners that became frustrated with Bitcoin’s inability to achieve consensus to add improvements. As data analysis firms started de-anonymizing Bitcoin users, privacy oriented coins became all the more appealing.

Eager to grow their community and see their currency gain use, Monero fans have organized and have even set up their own LocalBitcoins style exchange for Monero called LocalMonero.co where buyers can find local sellers for one-on-one trades.

The bottom line

Since its inception, Monero has forged ahead and carved its own path in cryptocurrency privacy innovation. When compared to Bitcoin, and despite early setbacks and engineering challenges, it clearly leads the way in terms of anonymity and untraceability. But it is not alone in the privacy niche. Hot on its heels are other privacy focused coins, like Dash, Zcash, PIVX and Verge among others.

But competition is good in the cryptocurrency space because a coin can adopt new and innovative techniques that other developers have found to be successful. It is more about keeping the protocol agile so it can implement improvements and upgrades. Monero devs have shown that this is something they consider to be very important.

Bitcoin has gone through its own upgrade recently with the activation of SegWit, providing the oldest blockchain with some much needed new capabilities. SegWit allows for second layer innovations to be built on top of Bitcoin’s protocol layer. The SegWit upgrade was hotly contested for a couple of years. This had the effect of stalling innovations like the Lightning Network for fast transactions, and Confidential Transactions which offer enhancements in user privacy.

With SegWit now activated, these innovations can be deployed. Any increased privacy and anonymity in Bitcoin transactions can erode some of the gains that privacy coins like Monero have made.

Other innovations are also in the pipeline, like MimbleWimbe and Atomic swaps, that can make cross-chain transactions possible, meaning you can send someone Monero, and they get the value in Bitcoin – or vice versa. Such developments can foster a sense of blockchains cooperating instead of directly competing to eat each other’s lunch. With that in mind, it is probably less about picking a winner between Monero and Bitcoin, and more about both coins growing independently and serving distinct use cases and markets.

Monero’s clear efforts in being distinctly different from Bitcoin are already paying off as it is clearly the leader in the privacy niche, and it is certainly here to stay.

The post Monero vs Bitcoin: Monero Adopted by Privacy Focused Crypto Users appeared first on CoinCentral.