Bitcoin (BTC) vs XRP (XRP): Opposing Visions of Scarcity and Decentralisation

Explore Bitcoin vs XRP, two top cryptocurrencies with contrasting visions of scarcity and decentralisation.

Introduction

Bitcoin (BTC) was the first cryptocurrency, pioneering blockchain technology and inspiring the broader decentralised finance (DeFi) community. Satoshi Nakamoto described BTC as a digital currency for peer-to-peer (P2P) electronic transactions without relying on central authorities like banks or world governments. BTC’s hard cap of 21 million tokens mitigates inflation, and Bitcoin’s ecosystem is managed by its community instead of its creator or a private company. Bitcoin makes reliable currency more accessible so everyone can participate and has become a trusted virtual value store, with growing acceptance from the finance industry and the general public. 

While Bitcoin may be the ‘gold standard’ of cryptocurrency, most altcoins deviate from it. David Schwartz, Arthur Britto, and Jed McCaleb engineered the XRP cryptocurrency (XRP), previously called Ripple, in 2012 as a more sustainable cryptocurrency designed specifically for payments. Whereas Bitcoin’s Proof of Work (PoW) consensus algorithm is slow with high fees, XRP’s Federated Byzantine Agreement (FBA) consensus mechanism provides lower fees and 3–5 seconds of average transaction speeds. XRP’s max supply of 100 billion tokens is far greater than Bitcoin’s, and its founding company is heavily involved in XRP Ledger (XRPL) governance. XRP isn’t as valuable as BTC per token, but it is much more effective as a means of exchange.

Bitcoin’s tokenomics emphasises scarcity and decentralisation, while XRP favours efficiency. Let’s look at how these opposite approaches drive two of the most successful blockchain protocols by market capitalisation. 

Key Differences Between BTC and XRP

Bitcoin Overview

Satoshi Nakamoto described Bitcoin as the world’s first cryptocurrency built on distributed ledger (blockchain) technology in a 2008 white paper titled “Bitcoin: A Peer-to-Peer Electronic Cash System.” On 3 January 2009, Nakamoto mined the first bitcoin — known as the genesis block — with public trading markets emerging in July 2010. Bitcoin’s utility was initially limited to cryptography enthusiasts, with the purchase of two pizzas on 22 May 2010, celebrated as Bitcoin Pizza Day, the first commercial transaction involving Bitcoin. 

Nakamoto initially and actively supported Bitcoin but later stepped back to promote decentralisation, transferring Bitcoin’s network alert keys and code repository control to Gavin Andresen, who became the Lead Developer for the nonprofit Bitcoin Foundation. Countless developers have worked on Bitcoin’s open-source protocol since, with support from the Bitcoin Foundation. 

Bitcoin has received numerous upgrades over the years, including the Segregated Witness (SegWit) software upgrade in August 2017 that improved scalability through Layer-2 blockchains like the Lightning Network. Additionally, functionality was further enhanced through the Taproot soft fork upgrade in November 2021. Despite these advancements, Bitcoin continues to face ongoing discussions around scaling, transaction speed, and energy consumption.  

Institutional adoption of BTC has surged in recent years, with major companies integrating Bitcoin into their balance sheets and payment systems. Spot Bitcoin ETFs, approved in 2024, have further legitimised Bitcoin as a mainstream financial asset, helping it continue its reign as the dominant option in the cryptocurrency space. 

Check out Bitcoin’s current value and recent price trends.

XRP Overview

XRP connects financial institutions, payment providers, exchanges, and corporations to provide one frictionless experience for global payments. This focus on the finance sector immediately differentiated XRP from BTC, which aimed to circumvent banks with its P2P network. After the XRPL blockchain was created in 2012, Chris Larsen soon joined as a co-founder and CEO. The group launched Newcoin in June 2012 to support XRP; rebranded it to OpenCoin in 2013; renamed it Ripple Labs, Inc., later that year; and finally shortened it to Ripple in late 2015. Now, the company behind the project is called Ripple, while the cryptocurrency is called XRP. While XRPL is managed by the community, the company helps guide its continued development while assisting clients utilising it.

XRP’s focus on payments leads to lower transaction fees than Bitcoin and many altcoins. The average XRPL transaction fee is US$0.005145, while Bitcoin’s is $3.50, though both figures fluctuate based on network conditions. Ripple has partnerships with financial institutions, such as GMT Advanced Financial Services, BBVA Switzerland, and DZ Bank, emphasising enterprise-level applications. These partnerships enable cross-border transactions and tokenisation services while ensuring compliance with regulatory frameworks.

In 2019, Ripple released RippleNet, its largest innovation, to improve cross-border payments for financial institutions. RippleNet merges three standalone Ripple products — xCurrent (a real-time settlement system), xRapid (a liquidity solution using XRP), and xVia (a payment API) — into a single platform. RippleNet combines these three functions into one interface to streamline payments between financial systems and blockchain technology across geographic borders.

Check out XRP’s current value and recent price history.

Ecosystem Comparison: BTC and XRP

Bitcoin and XRP’s Consensus Mechanisms

Bitcoin invented the PoW consensus mechanism, where new transactions must be included in a block with a mathematical proof of work (solving a complex cryptographic puzzle). Trial and error is the only way to solve it, so miners use powerful computers to crunch the numbers for the right to add a block to Bitcoin’s blockchain. Successful miners receive all the transaction fees on the block plus a set block reward, which adds new coins to Bitcoin’s ecosystem and decreases over time through Bitcoin halving events. 

PoW is secure but requires a vast amount of energy, leading to debates over environmental sustainability, though some mining operations now focus on renewable energy sources to mitigate the effects. Transactions are slow and pricey to process, limiting Bitcoin’s utility as a day-to-day currency, though the complexity of PoW enhances security. PoW may also promote centralisation since large mining pools with specialised Application-Specific Integrated Circuit (ASIC) hardware dominate the network despite Bitcoin’s decentralised architecture. 

XRP’s Federated Byzantine Agreement (FBA) consensus mechanism is unlike any other protocol. Ripple maintains a list of trusted validators, called the Unique Node List (UNL), and these validators are responsible for verifying transactions and maintaining XRPL’s stability. Transactions are approved once 80% of the UNL reaches consensus, eliminating the need for energy-intensive mining or staking, as seen in Proof of Stake (PoS) tokens like Solana (SOL) and Ethereum (ETH). The result is fast, carbon-neutral transaction processing. 

FBA’s biggest downside is centralisation — Ripple controls which validators are on the UNL and, therefore, who verifies transactions. While anyone can create a validator, only Ripple can approve it for inclusion on the list. Critics argue this compromises decentralisation, requiring users to trust Ripple. Supporters contend that this setup enhances efficiency, regulatory compliance, and institutional appeal, making RippleNet a strong choice for cross-border payments.

Bitcoin and XRP’s Scalability

Bitcoin averages roughly seven transactions per second (tps), with a maximum of 13, making it too slow for scale. These limits stem from Bitcoin’s block size (1 MB) and block time (approximately 10 minutes). Efforts to improve Bitcoin’s scalability focus on Layer-2 solutions like the Lightning Network, which enables faster and cheaper off-chain transactions. However, Lightning Network adoption is limited, and scalability challenges persist on the Bitcoin network. 

Ripple’s XRP Ledger offers higher throughput. Supporters claim the XRPL processes up to 1,500 tps, but Schwartz refutes this claim, saying the current infrastructure handles 300–500 tps in real-world scenarios. That’s still much faster than Bitcoin, but slower than payment processors like Visa and some competing cryptocurrencies. 

While Bitcoin prioritises decentralisation and security, XRP emphasises speed and cost-efficiency, trading off some decentralisation to achieve higher throughput.

Tokenomics Comparison

Bitcoin Use Cases

BTC is the Bitcoin network’s native cryptocurrency and used for transaction fees and mining rewards. It is also a secure store of digital value comparable to gold, and crypto traders frequently buy and sell BTC on trustworthy platforms like Crypto.com, exchanging it for fiat currencies like US dollars or other cryptocurrencies. Bitcoin powers financial products like exchange-traded funds (ETFs) and is virtually synonymous with crypto, often driving the value of altcoins with its price trends.

Acceptance as a Payment Method

Bitcoin’s unquestioned status as the top cryptocurrency means that nearly any merchant accepting crypto payments more than likely accepts BTC. Some of the biggest names include The Home Depot hardware stores, Starbucks, and Whole Foods Markets. Furthermore, smaller retailers often accept BTC to differentiate themselves from competitors. Examples include the California fashion store Ami Clubwear, Shiny Leaf skin care, and Bloom Audio. Bitcoin holders can also buy gift cards to popular retailers or almost anything else through services like Crypto.com Pay.

XRP Use Cases

XRP is the native cryptocurrency of the XRPL and used to pay gas fees and facilitate transactions between financial institutions. Notably, the XRPL doesn’t require its native token for day-to-day transactions in its ecosystem. XRP is also a virtual value store that holders can swap for fiat or crypto.

Beyond payment processing, the XRPL supports additional functionality, such as non-fungible tokens (NFTs) and smart contracts, through ‘federated sidechains’. Multiple companies have expressed interest in creating an XRP ETF, but are still seeking regulatory approval as of this writing.

Acceptance as a Payment Method

Fewer vendors accept XRP than BTC, but the list still includes merchants like ThunderVM (web-hosting services), Airbrush Customs (personalised T-shirts, hats, and hoodies), and AUGET (French scented candles). XRP holders can also purchase gift cards and access their favourite stores through services like Crypto.com Pay.

Key Pricing Moments

All cryptocurrencies are prone to significant price fluctuations based on market sentiment, world events, influencer activity, and other factors. BTC and XRP define this trend with roller coaster histories. Below is a brief timeline for each token.

Bitcoin — Key Price Events

XRP — Key Price Events

Performance and Market Metrics

BTC has a market cap of $1.6 trillion as of this writing. Its hard cap of 21 million tokens creates extreme scarcity, ensuring supply never keeps up with demand. Each token is worth tens of thousands of dollars, with seemingly unlimited price upside potential. BTC first eclipsed $100,000 per token in November 2024. 

XRP has a market cap of over $120 billion as of this writing. It has a maximum supply of 100 billion tokens, all minted at launch, with 80 billion gifted to Ripple (the company) by the founders. Ripple periodically releases some of these tokens to the ecosystem, acting as a central authority. That said, XRP has a ‘burning’ mechanism that should make XRP deflationary over time. XRP currently has a circulating supply of 57.2 billion and a price range of $0.50–$3.00.

Developments and Roadmaps: BTC and XRP

Bitcoin’s Roadmap

Bitcoin lacks a defined roadmap, instead relying on its community to vote on and implement potential updates and improvements. Most Bitcoin developers prefer to work on auxiliary projects, such as improved Layer-2 support, rather than directly on the protocol’s code, so future upgrades will likely be small in scope. Bitcoin may not need massive upgrades, anyway, since it is already the world’s dominant cryptocurrency.

Bitcoin’s Community

The market determines cryptocurrency value, and social media often provides insight into how the community feels about specific tokens. Bitcoin has 7.6 million X followers and 7.8 million Reddit followers as of this writing, indicating an extensive and enthusiastic user base. 

XRP’s Roadmap

Ripple issued a stablecoin, called Ripple USD (RLUSD), on the XRPL and Ethereum’s network on 17 December 2024, allowing financial institutions to make payments with a cryptocurrency pegged to the US dollar. The XRPL is compatible with the Ethereum Virtual Machine (EVM) and other blockchains.

The long-term effects on XRP are unclear at writing since RLUSD’s release reduces Ripple’s reliance on XRP and the XRPL for cross-border transactions. Ripple’s roadmap also includes updated versions of Project Clio, an API server that doesn’t connect to the P2P network. Instead, it pulls information from dedicated servers connected to the P2P network to handle API calls more efficiently. Clio 2.3.0 was released on 12 December 2024, with further updates expected in 2025. 

Ripple’s Community

Ripple has 3.1 million X followers and 381,000 Reddit followers as of this writing.

Conclusion: Bitcoin vs XRP

It’s difficult to compare Bitcoin and XRP because they are so different. Bitcoin jump-started cryptocurrency and the DeFi movement, while Ripple focused on helping financial institutions bridge the gap with the development of the XRP token. A decentralised community governs Bitcoin, while a private company controls XRP. Additionally, Bitcoin is a scarce commodity, whereas XRP isn’t. 

Crypto traders may prefer BTC for its high price upside potential or XRP for its accessibility. Merchants may prefer Bitcoin’s brand recognition or Ripple’s lower transaction fees. Developers may not choose either token, however, since neither is known for a robust ecosystem of decentralised applications (dapps).

Before making a purchase, always research a token’s tokenomics, price history, risk profile, documentation, and development team. 

Due Diligence and Do Your Own Research

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Although the term ‘stablecoin’ is commonly used, there is no guarantee that the asset will maintain a stable value in relation to the value of the reference asset when traded on secondary markets or that the reserve of assets, if there is one, will be adequate to satisfy all redemptions.

Past performance is not a guarantee or predictor of future performance. The value of crypto assets can increase or decrease, and you could lose all or a substantial amount of your purchase price. When assessing a crypto asset, it’s essential for you to do your research and due diligence to make the best possible judgement, as any purchases shall be your sole responsibility.