Ripple and Ethereum has been at loggerheads since the early days of cryptocurrencies. Both have differing views on tokenomics, and functionalities, as well as their own acolytes (fans). However, there’s little doubt that tonnes of money have been made and loss through the speculation of these two cryptocurrencies. So, with Ripple’s market capitalization again overtaking Ethereum’s, what’s actually happening? Is it due to short term technicals, or long-term prospects?
A reliable use case
It’s no secret that banks and their infrastructure are outdated, and are playing catch-up at the moment. Realizing this earlier on, Ripple sought to change the game by getting banks to use their blockchain platform instead. It smartly positioned itself as Amadeus did for airline ticket booking, and have signed many financial institutions since. What’s amazing is that it also got the backing of existing big tech players; for one, Ripple is backed by Google.
Despite being accused as an “institution lackey” and being overly centralized token (unlike Bitcoin), Ripple’s practical use case has kept it afloat helping it surge in value from US$0.003 to US$3 per token in 2017.
Interestingly, while the market might be down, banks have not stopped working with Ripple. For example, the biggest bank in Japan recently announced its intention to use Ripple as a payment service in Brazil. Despite being rather negative on bitcoin, numerous industry titans spoke highly of Ripple’s use case in revolutionizing the financial industry.
Ethereum losing its shine
On the other hand, Ethereum, despite its namesake and market share, has had its ups and downs. First off, the saturation of ICO projects on the Ethereum platform are causing the price to drop; as projects sell Ethereums to fund salaries and development. To some users, the sheer quantity of projects must mean a significant amount of them are lacking in quality. Indeed, the ease of raising capital is what helped Ethereum to rise; but it also acted as a double edge sword in this down market, as ICO projects dump the coin to oblivion. This devalues the coin and sends investors elsewhere.
Additionally, stiff competition is coming from the cryptocurrency no one expected to succeed – Tron, a project that aims to decentralize the internet. Tron (TRX) gained enormous traction by having not only the support of Binance’s Changpeng Zhao, and Alibaba’s Jack Ma, but it also pulled what seemed like the impossible; the purchase of Bittorrent. The recent roll-out of its blockchain also enables developers to create decentralized applications on its blockchain. On top of this, Tron is compatible with Java – a language that many programmers are familiar with, while Ethereum’s platform requires developers to learn its new language, Solidity.
Adding one and one together, it seems that Ethereum may have fallen behind by wanting to be unique, and not appealing to the rest of the developer community. It also doesn’t help when its token prices have fallen to all yearly lows, causing previously committed developers to stop working on Ethereum projects altogether. The falling prices have also created opportunities for Ripple’s market capitalization to overtake Ethereum’s.
Indeed, the down markets have started to claim its victims; creating the perception that the “grass is greener on the other side” case for investors to abandon Ethereum, in favour of other projects. This inadvertently makes the Ripple project look better, although it’s not without flaws.
Cover photo by: bittpress