Users Are Shifting to Ripple Due to Bitcoin and Ethereum Congestion
Summary
- Increased Ripple usage when Ethereum and Bitcoin blockchain experience congestion.
- XRP fees are relatively low compared to Bitcoin and Ethereum.
- XRP fees are over 100x less than Ethereum fees.
According to new research, users are shifting to the Ripple ledger due to congestion on the Bitcoin and Ethereum blockchain. This comes as increased cryptocurrency adoption is resulting in higher network fees across major cryptocurrencies.
The research was published on the Xpring blog. Xpring is Ripple’s development arm that focused on developing and furthering Ripple’s technology.
How the Top Three Compare
The top three cryptocurrencies by market cap, account for the majority of cryptocurrency value transacted. While Bitcoin is regarded as slow and expensive, many users use Ethereum to transact. However, Ripple’s XRP ledger has even lower transaction fees than the Ethereum blockchain.
Bitcoin
Bitcoin has a 10 minute block time and relatively smaller block capacity. As a result, Bitcoin only a TPS (transactions per second) capacity of 7. Thus, the Bitcoin network can get congested very quickly. During late 2017, Bitcoin activity exploded resulting in fess surpassing $35 for a single transaction.
While Bitcoin fees have dropped to $2.50 per transaction, this is still exponentially higher than fees paid on the Ethereum and Ripple blockchain.
Ethereum
Ethereum on the other hand, Ethereum has a 13-second block time which gives the blockchain a TPS of 15 transactions per second. Thus, Ethereum’s transaction fee is only $0.053 per transaction.
The Ethereum blockchain has been consistently operating at over 80% usage. Increasing adoption will push the blockchain to its limits and result in network congestion and higher fees.
XRP
Transactions on the third-largest cryptocurrency follow an entirely different path. The XRP ledger is a distributed ledger that does not have blocks. Therefore transactions are instant and inexpensive.
With the average XRP fee being 0.002 XRP ($0.00042) per transaction, transacting on the XRP ledger is far more cost-efficient than Ethereum and Bitcoin. Thus, many users have begun to utilize the XRP ledger to take advantage of the scalability and inexpensive transactions.
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