Cardano, Ethereum, and XRP – What Separates Them? 

 When you’re talking about different currencies, it’s easy to get confused. Are digital currencies affected by events and markets the same way national currencies are? Find out here.

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Cardano, Ethereum, and XRP are three major cryptocurrencies that have some similarities but also important differences. But when you’re talking about different currencies, it’s easy to get confused. Are digital currencies affected by events and markets the same way national currencies are? What makes them so special and unique? Is the current ADA price affected by the tech ingrained in it? All of this is important to consider when it comes to investing your hard earned money into this famously volatile market? In this guide, we explore what separates Cardano, Ethereum, and XRP, and how that can inform your decision on what to invest in.  

What is crypto?

What is crypto? Crypto refers to cryptocurrencies, which are digital or virtual currencies that use cryptography to secure and verify transactions. Crypto is getting talked about more as the demand and usage for it also grows, which means more people are trying out investments.

Cryptocurrencies run on decentralized, independent systems that are not governed by a single authority and because of this it then makes them immune to manipulation or interference from governments or financial institutions. This draws a lot of people to use crypto and they feel safe and in control of their money without the government being able to access it. These transactions are then verified and added to the blockchain, where it is permanently recorded. This provides transparency while maintaining the anonymity of users.

However, crypto markets remain highly volatile. The regulatory status of cryptocurrencies varies substantially across different countries and is still evolving. Crypto aims to provide a fast, secure, decentralized alternative.   

Why is crypto becoming more popular?  

Why is crypto gaining popularity? There is more being written about it, and it is being increasingly talked about. A reason why it is so popular is that central banks are not involved in controlling the money supply because they have a tendency to devalue money over time through inflation.   

Another reason is that users interact with the cryptocurrency network using wallets identified by a string of numbers and letters so this then provides a level of anonymity while still allowing transactions to be verified. Everything relies on how anonymous you were when completing the purchase and you will remain protected as long as your Bitcoin transactions cannot be linked to you, even though they will be visible to the public on the blockchain.  

What is Cardano?  

Have you heard of this before? Cardano is a blockchain platform that aims to be a flexible, sustainable, and scalable foundation for running smart contracts and decentralized applications. It uses a proof-of-stake consensus mechanism called Ouroboros to validate transactions. Cardano was created by Ethereum co-founder Charles Hoskinson and was developed by the company IOHK, their intention for Cardano is as time goes on, it is supposed to develop into a multipurpose system run by bitcoin holders.   

What is Ethereum?

Ethereum hasn’t been around for too long as it was proposed in 2013 by Vitalik Buterin and only went live in 2015. Ethereum is a decentralized, open-source blockchain platform that runs smart contracts. It allows developers to deploy and create decentralized applications   

Anyone can use Ethereum to develop any kind of secure digital technology. If approved, users can use the token to pay for actual goods and services in addition to the work done to support the blockchain. Ethereum is intended to be decentralized, secure, programmable, and scalable. For developers and businesses building technology on top of it to transform several industries and our way of life, this is the preferred blockchain.  

What is XRP?

XRP, also known as Ripple, is a Real Time Gross Settlement System and remittance network created by the company Ripple. XRP was designed with the express purpose of making cross-border transactions quick and affordable. Although other cryptocurrencies may also be designed to fill this role, Ripple has excelled by providing businesses with this service thanks to restrictions on fees and block delays.  

In contrast to Bitcoin, which uses a consensus process based on proof-of-work, XRP uses a Federated Byzantine Agreement (FBA) model for its consensus mechanism. This method means that there is no need for staking or mining to validate and record transactions. Instead, this method uses the Unique Node List (UNL), which is a group of validator nodes to reach a decision and keep the transaction ledger updated as much as every three to five seconds. XRP was created specifically to improve international value transfers but its centralized control and ongoing legal issues make it uniquely controversial.  

What are the differences? 

The three cryptocurrencies take quite different approaches but all aim to utilize blockchain technology to facilitate secure digital transactions. Cardano focuses on building a scientific, research-based foundation, this makes it stand out from the others, but it is still growing and developing. Ethereum enables decentralized apps on its network and Ripple targets the global interbank payments system. They represent different generations and philosophies in the evolving crypto space. While Crypto is still changing and developing, the use of the new blockchains being developed pushes Crypto further into hopefully it will one day be a major form of transferring currency. 

Conclusion

With this information in mind, you can better understand where the best investment is for you and when – or if – you should pull your money.