. I know, as a Bitcoin enthusiast, some may want to punch me in the face just for mentioning Ripple but hear me out. I love bitcoin but decided to put my differences aside and really look into “the scam coin” XRP and Ripple. I found that Ripple combined with their new product ILP (Interledger Protocol) is actually a brilliant idea and an idea that could possibly provide solutions to problems with Bitcoin at this very moment.
1) Bitcoin Transaction Time and Increased Block Size
Use a Bitcoin wallet for your savings accounts (real bitcoins) and use Ripple’s IOU system for transactions. Trading a btc.iou (for example a Bitstamp.btc IOU) can be done instantaneously with Ripple. So… when making purchases online wouldn’t it be more efficient for both the buyer and merchant to use an IOU system for faster confirmations? Wouldn’t this be great for Bitcoin because it would reduce the amount of transactions on the network? Less micro-payments, instead there would be fewer large single transactions, which could help reduce the need for huge block sizes.
2) Bitcoin Connections
Banks are using private networks (there is no getting around this). They refuse to use a public ledger. So networks of banks are being established using private ledgers cutting out bitcoin. The problem is they are limited to only transactions within their private networks (which isn’t much of a game changer). Ripple is developing the Interledger Protocol that provides a means for public, private and permissioned networks to trade between each other. Making transactions between bitcoin and the financial world easier.
Here are some interesting recent quotes that might make you think twice about the Ripple.
"There’s a lot that Bitcoin or Ripple and variants can do to make moving money between countries easier and getting fees down pretty dramatically. But Bitcoin won’t be the dominant system.” – Bill Gates
“Given this multi-chain vision, we see smart contracts as a key piece. Then you need ILP, which is the glue in the system that holds everything together, so that different chains can interoperate. That means a derivatives chain can interact with the securities chain it’s derived from. In all of these interactions, you’ll have to move money around. So you will need Ripple for that.” – Marley Gray (Microsoft)
My point is both can coexist, XRP as a vehicle (that has some control like the usd) and bitcoin as a commodity (store of value like gold but with the advantage of being easily transactional). So to me, Ripple and Bitcoin are not competitors. In fact, if you asked Ripple employees if they liked bitcoin, 99% of them would probably say they love it.
Note: Also, with the bitcoin mining power centralized in China and Ripple now has Microsoft (and others) wanting to run validators. Ripple may actual end up being more decentralized than Bitcoin.