In this XRP vs Litecoin guide, CoinFalcon delves deeper into these two crypto heavyweights and see how they differ with each other. XRP and Litecoin are among the top six coins in the world by market capitalization.
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While one project was developed to disrupt the way international transactions and banks operate, the other was designed to be a cheaper alternative to Bitcoin and as a means of a transaction for cheaper and everyday purposes.
Ripple (XRP) Key Highlights
- 2012 - Ripple is founded
- 2014 - Co-founder, Jed McCaleb forks away from Ripple, going on to form the Stellar Protocol
- April 2015 - Ripple announces Brad Garlinghouse as CEO and opens office in Sydney
- March 2016 - Ripple office opens up in London
- May 2016 - Santander becomes the first UK bank to use Ripple for cross-border payments
- May 2016 - SBI Ripple Asia is established to fast track the commercial use of blockchain across Asia
- December 2017 - XRP briefly becomes the second-largest cryptocurrency, with a market capitalization of US$73 billion, but then slips back to third behind Ethereum
- February 2018 - CoinFalcon officially begins trading Ripple’s currency, XRP
- October 2018 - Ripple launches xRapid for commercial production as a regulatory compliant way to facilitate cross-border payments. xRapid has since evolved into the On-Demand Liquidity [ODL] product, which utilizes XRP as a real-time bridge between payments sent and received in different currencies
- June 2019 - Ripple buys stake in MoneyGram in a strategic move that was applauded by the market
- November 2019 - MoneyGram begins processing cross-border payments using Ripple’s ODL.
Litecoin Key Highlights
- October 2011 - Founder Charlie Lee releases Litecoin open-source client on GitHub
- October 13, 2011 - The litecoin network goes live
- November 2013 - Litecoin hits a momentous milestone by reaching a market capitalization of$1 billion
- April 2014 - Litecoin launches version 0.8.7.1
- August 2015 - Litecoin undergoes its first halvening, slashing LTC mining rewards to 50 LTC. Halvenings occur every 840,000 blocks.
- May 2017 - SegWit and Lightning Protocol are activated for Litecoin
- Sep 2017: CoinFalcon officially begins trading LTC
- January 2019: Charlie Lee announces plans to make Litecoin fungible by incorporating privacy
- August 2019 - The second Litecoin halvening occurs, slashing the Litecoin rewards for producing a block from 25 LTC to 12.5 LTC.
XRP vs Litecoin: Purpose
Ripple was founded to connect a global network of financial institutions and banks to facilitate fast and efficient international payments at minimal costs. Ripple seeks to fix the most prevalent problems with cross border payments, such as bloated transaction fees, unfavourable exchange rates, and lengthy processing times. Ripple uses its digital currency, XRP to power the XRP ledger where payments can settle in around four seconds. This is a massive cut from traditional payment systems’ processing time of 2 - 5 business days.
Litecoin, on the other hand, is a hard fork of the main Bitcoin protocol and was designed as a viable solution to the problems faced by Bitcoin as a mode of payment and store-of-value. Popularly referred to as the silver to Bitcoin’s gold, Litecoin aims to be a practical and decentralized mode of fund transfers for normal transactions. The processing time for Bitcoin is quite slow, able to process only about 4.6 transactions per second, which is a far cry from other payment processors like Visa, which can process thousands of transactions per second. Litecoin counteracts these issues with around 56 transactions per second and is currently the third fastest cryptocurrency by transaction speed.
Essentially, both Ripple and Litecoin have similar functions but go about it in different ways. Ripple aims to provide a simpler, faster, and cheaper way to handle payments across the globe by partnering with banks, payment processors, and other financial institutions who are connected on it Ripple Network (RippleNet). Litecoin seeks to facilitate faster, cheaper international payment on a peer to peer level.
XRP vs Litecoin: Token Distribution
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The first thing to understand about Ripple’s XRP tokens is that they have already been pre-mined, meaning there are no miners or stakers within its ecosystem. The token supply is capped at 100 billion XRP with around 20 billion XRP tokens withheld by the creators. Ripple Labs then uses the remaining 80% to maintain the liquidity within the market. 55 billion XRP are locked up in a rolling 5-year escrow in order to regulate token supply. 1 billion XRP are released every month and any tokens not used within that period are returned to escrow to be re-released after the 5-year rolling period.
Litecoin’s supply is capped at 84 million coins with over 62 million already mined and in circulation. The block mining reward being halved every at 840,000 coins. The last halving occurred in August 29 and the current reward now sits at 12.5 LTC. Like Bitcoin, once it gets easier to mine LTC, the network will adjust and mining gets exponentially harder. This is in line with Satoshi Nakamoto’s vision for a deflationary currency as is currently being down with Bitcoin. As things stand, the last LTC is expected to be mined in the year 2142.
XRP vs Litecoin: Pros and Cons
We cannot do a fair comparison between these crypto giants without taking account of their respective advantages and challenges.
Advantages of XRP
- Growing in popularity - Ripple is fast becoming a leading tool of the trade for financial institutions across the globe and mounting a serious challenge to other cross-border payment systems like SWIFT, MoneyGram and Western Union.
- Fast transaction times - At an average of only four seconds, XRP transactions are much faster than other significant cryptocurrencies like Bitcoin (1 hour +) and Ethereum (2 minutes+).
- Low transaction fees - The payable fees for Ripple-related transactions are so low compared to other payment institutions like Visa and PayPal.
- Fully functional despite crypto volatility - Even with the current state of volatility in the crypt market, XRP remains functional and its fundamentals are growing stronger. Even at its current price of less than $1, it still manages to be the number 3 crypto asset by market cap (9.54B€).
Disadvantages of XRP
- Ripple Labs controls XRP coin supply - One of the strongest arguments for cryptocurrencies is that they are decentralized, but Ripple has gone against the grain and even owns a hefty percentage of the entire XRP coin supply. While this makes it unique, it can also have an adverse effect on XRP’s price and adoption on a retail level.
- Central authority - Ripple utilizes a consensus ledger which requires “validated” participants to verify transactions. Again, this goes against the usual cryptocurrency standards where transaction verifications can be done by anyone on the network.
Advantages of Litecoin
- Scrypt Algorithm for mining - Litecoin mining tends to be more efficient than that of Bitcoin and Hash power is more equitably distributed among all the miners.
- Speedy transaction times - As previously mentioned, Litecoin has one of the quickest block timings, which in turn makes it a preferred cryptocurrency on the market.
- Active community - Litecoin boasts one of the most active and progressive communities in the cryptocurrency world. Its creator, Charlie Lee and his development team provide ready answers for any questions, which in turn builds more trust among the growing community members.
- Established with a high trading volume - Litecoin has been trading since 2011 and has established its place among the top cryptocurrencies in terms of both price and market capitalization. This means you won’t have a problem trading it.
Disadvantages of Litecoin
- Success depends on Bitcoin’s challenges - Litecoin was created as an easier alternative to Bitcoin and addresses some of the number one cryptocurrency’s troubles. But if Bitcoin can one day overcome its challenges, then Litecoin might find its usefulness questioned.
- Volatility - To be fair, volatility affects the entire crypto market, but just as market movements in gold can affect the price of silver, Bitcoin’s market movements can also affect the value of Litecoin. And as you’re well aware, Bitcoin investments do come with a certain level of risk meaning investments in Litecoin are also a little risky.
- Blockchain scalability -This issue doesn't just affect Litecoin, but the company needs to find a way to further finetune LTC and scale this hurdle.
Which Should You Buy?
There is no straight answer to this question as you’ll need to make that decision for yourself after carefully analyzing their respective fundamentals and other key indicators. In any case, we hope this guide was enough to help you understand both digital assets. If you are still undecided, you can buy both XRP and Litecoin on CoinFalcon to build a diversified long-term portfolio.
XRP and Litecoin share some similarities, but overall, their core philosophies are completely different. But at least, they are both providing solutions to problems that really need fixing. As the world slowly but surely shifts towards a digital, cryptographic-protected style of processing international payments and gradually replacing conventional banking systems, it has become even more important to adjust and embrace the more efficient, safer and faster digital payment systems as provided by these crypto giants.
You can buy and sell both XRP and LTC here on CoinFalcon. What’s more, you can now use your credit/debit card to purchase cryptocurrencies. This is in addition to previous payment options like bank transfers and payment using other cryptocurrencies. So what are you waiting for? Get the future of money in your hands today!