Right now, it is prevalent to know about the blockchain, cryptocurrencies, and how to invest in them. If you already know about these topics, you might be wondering which cryptocurrency is better for you. Today, we will talk about two big names in the cryptocurrency market right behind Bitcoin. These coins are Ethereum and Ripple. Let’s see which you should invest in.

What is Ethereum?

Let's start by clarifying that Ethereum is much more than a cryptocurrency. It is one of the most popular Blockchain technology platforms in the world and it’s open source. Aftеr Bitcoin, Ethereum is the sеcond largest crypto platform that has managed to capitalize on the market. This can be seen in the Ethereum price, which has reached new heights in 2021.

To power transactions on what is the Ethereum blockchain, it has its own token. However, it supports other tokens, such as ERC-20.

Ethereum has other applications such as generating digital agreements written in code and smart contracts. These can help users make payments and direct contracts through a third party.

It also has 'dApps' or decentralized Apps that build on the blockchain. The same has managed to power DeFi, or decentralized finance, which has a myriad of applications, such as giving loans, insurance services, or trading, to name a few.

What is Ripple?

Ripple is also more than your average cryptocurrency. It is also a payment protocol that helps streamline international transactions. Ripple brought these two functionalities together, which is the name most commonly used to describe the RippleNet platform and the Ripple XRP virtual currency.

The project was born with the idea of making financial payments easy, as most financial payments are fragmented and complicated. Transactions that are usually tedious, time-consuming, costly and unreliable are solved with Ripple.

Ripple allows instant, secure, and almost free cross-border payments, making it one of the fastest-growing alternative platforms in the investment world. Despite that, the Ripple price has lagged somewhat behind the price development of most other cryptocurrencies.

Main differences between Ethereum and Ripple

Knowing the basic concepts of Ethereum and Ripple, perhaps the similarities they share, such as being a native currency and payment platform at the same time, can generate confusion on which one to choose. Let's delve into the key differences such as transaction speed, market capitalization and supply availability.

Transaction speed
The transaction speed difference between Ethereum and Ripple is abysmal. And the answer lies in the nature of each project. Ripple was born to speed up transactions between companies, that is, to eliminate slow times. This crypto is fast, processing more than 10,000 different transactions in a single second.

In contrast, Ethereum can only process 15 transactions per second; it is 670 times slower than Ripple. This makes Ripple's exchange rates much cheaper than Ethereum's, which are much higher. It also makes Ethereum less energy efficient.

Now, could this change? Eth2 or Ethereum 2.0 promises to be much faster than its predecessor. However, it still consumes a lot of energy: 22.65 kwH. Its users are still testing it.

Market capitalization

Ethereum ranks within the market capitalization as the second coin. The current price is $1,760, and its trading volume is almost $20,624,157,710 at the moment of writing this article.

Ripple is considered the fourth cryptocurrency after Bitcoin, with a price of $0.46 and a trading volume of $5,185,960,520.

Despite Ripple being designed for financial transactions with large banks, which is a much more limited scope than Ethereum, it can be used for different DeFi.

Of course, Ethereum is one of its main competitors, so thinking about investing in each of these cryptocurrencies is not a bad idea.

Supply availability

As for the supply capacity, which is nothing more than the amount that each crypto has available, with Ripple, we have a fixed answer, 100 billion XRP. On the other hand, Ethereum has an unlimited supply.

The circulating supply of the former is 45,404,028,640 XRP, with the latter ETH at 115,084,297.

Ethereum Price vs. Ripple price

In terms of price movements, there is no comparison between Ethereum and Ripple. Ripple has traded much lower than Ethereum; it also has legal issues that hit the market in early 2021.
For the first few years of its existence, XRP traded well below the dollar. It was only in 2017 that it started to move, reaching a historical high of $3.08 by January 2018.

Ripple continued to rise despite the COVID pandemic. However, in December 2020, with the SEC decision, it dropped around $0.25.

By February 2021, XRP has risen again to $0.62, representing a growth of 150%, this has meant a rapid recovery, but it has not experienced the price increases of Ethereum.

With Ethereum, something strange happened; by 2015, it was worth less than $1.00. In 2017 it struggled to break the $10.00 mark. That same year several cryptocurrencies increased prices. But it was not until January 2018 that prices skyrocketed to over $1,400; this was before the famous bitcoin bubble and ETH would go as low as $85 before the end of the year.

In 2018 and 2019, Ethereum was recovering, crashing the $250 barrier. ETH withstood the COVID pandemic very well, and by December 2020, it was up to $615 per token.

By February 2021, Ethereum skyrocketed, reaching a record $1,936.72, and in March this year, it surpassed $1,900.

Ethereum vs. Ripple – Which should you invest in?

Giving a single answer to this question is not as simple as it seems. The decision needs to be made based on various factors such as what style of investing you do, what your current portfolio is and what your attitude towards risk is.

Ethereum, since the launch of Ethereum 2.0, has demonstrated efficiency and is expected to skyrocket from usage and transaction generation. This cryptocurrency accepts many other tokens and has a wide range of high profile investors.

As we already know, its purpose is different, and its price is not affected by the same factors that affect Ethereum. It is an opportunity to diversify the portfolio by investing in Ripple.

It is essential to consider that Ripple is outperforming its traditional competitors because its transaction speed is much faster than VISA.

Investing in any of them -Ethereum or Ripple- without prior knowledge could increase possible unnecessary financial losses. Whether you are an experienced cryptocurrency trader or a Novel in the subject, the decision of investing on Ethereum or Ripple is entirely up to you.