Cardano vs. Ripple

If you’re just getting started investing in cryptocurrency, you’ve more than likely heard of Cardano (ADA) and Ripple (XRP), two of the biggest blockchains in terms of crypto market cap.

 

While inherently different networks, you can use this guide to understand how XRP and Cardano differ in their philosophies and their approach to design. 

Cardano vs Ripple
Cardano

CARDANO

Cardano is one of a number of competing proof-of-stake blockchains that enables owners of its ADA cryptocurrency to help operate its network and vote on changes to its software rules.

Ripple

Ripple

Ripple, in an effort to challenge traditional transactions, presented a new way of operating a blockchain’s transaction and records system for payment settlements with its cryptocurrency XRP.

To further understand how these two complex networks work, read below for a side-by-side comparison of Cardano vs Ripple so you can start to better understand and appreciate the differences yourself.

The difference between Cardano and Ripple

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Cardano

Cardano was founded September 27th, 2017

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Ripple

Ripple was founded September 2012

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Cardano

Cardano was created by technologists Jeremy Wood and  Charles Hoskinson, one of the co-founders of Ethereum.

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Ripple

Originally founded as OpenCoin, the startup behind XRP later changed its name to Ripple Labs in 2013 before settling on Ripple in late 2015.

 

Ripple now acts as principal steward in the funding and development of XRP and plays a big role in its development and digital economy.

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Cardano

ADA

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Ripple

XRP

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Cardano

Cardano’s primary use case is to allow transactions in its native cryptocurrency, ADA, and to enable developers to build secure decentralized applications powered by it.

 

However, Cardano differs from other blockchain projects by emphasizing a research-driven approach to design, aiming to achieve an academic rigor it believes will propel adoption of its technology.

 

While Cardano may not promise new ground-breaking features, users and developers may find its cryptocurrency offers appealing optimizations based on scientific research and formal verification, a process by which its code is verified mathematically.

 

Further, Cardano is released in phases and has seen 5 major platform upgrades since 2017, including Byron, which enabled the transfer for ADA cryptocurrency for the first time and Voltaire, which introduced a new model for how users could fund development for software changes. 
 

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Ripple

XRP was created to complement traditional payments by migrating transactions that occur today within financial institutions to a more open infrastructure.

 

In order for XRP to work, Ripple built the XRP ledger, a software that introduced a new way of operating a blockchain’s transaction and records system.

 

Similar to Bitcoin, the XRP ledger allows users to send and receive its XRP cryptocurrency using digital signatures.

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Cardano

Cardano is maintained by three separate and independent organizations.

 

The Cardano Foundation oversees development of the Cardano blockchain.

 

IOHK built Cardano and designed Ouroboros, the proof-of-stake algorithm Cardano uses to operate its network.

 

Emurgo helps encourage enterprises and larger organizations to adopt Cardano’s technology.

 

At the time of its launch, approximately 31 billion ADA were created, nearly 26 billion of which were sold to investors by a Japan-based company hired to manage the sale. Participants were able to purchase vouchers that could later be exchanged for ADA on the software’s release.

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Ripple

Upon the launch of XRP, Ripple initially distributed 45 billion XRP to users on forums through various giveaways. The remaining XRP is being escrowed by the company to fund its technology development.

 

However, the distribution of its tokens continue to cause debate due to Ripple being a for-profit company. This has enabled it to be the principal steward and key decision maker in the funding and development of the XRP Ledger, a controversial stance in the distributed world of cryptocurrencies today.

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Cardano

To secure its network, Cardano uses Ouroboros, a consensus mechanism similar to Proof of Stake (PoS) ones that enables users to validate transactions and earn newly minted ADA.

 

Ouroboros divides time into epochs and slots, where epochs are the overarching time frames, and slots are 20-second increments within epochs.

 

Within each slot, a slot leader is randomly chosen and is responsible for choosing the blocks that get added to the blockchain.

 

Once the epoch has ended, the previous slot leaders elect the slot leaders of the next epoch.

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Ripple

Central to the XRP cryptocurrency is the XRP Ledger, the technology that allows users to send and receive cryptocurrency using public- and private-key cryptography and enables servers to send transactions for consideration by its network.

 

The XRP Ledger differs from Bitcoin in that it does not use mining or require specialized computing hardware to secure its ledger and validate transactions. Only specific nodes, called unique nodes, can validate transactions on the network.

 

This design was intended for nodes to quickly validate transactions in an attempt to mirror transactions that occur today between databases controlled by financial institutions.

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Cardano

ADA is the main cryptocurrency powering Cardano, is minted every block and distributed to slot leaders as rewards for verifying transactions.

 

Like many other cryptocurrencies, the supply of ADA tokens is limited, meaning that according to the software’s rules there will only ever be 45 billion ADA.

 

In early 2021, 31 billion ADA were in circulation, with the remaining 14 billion scheduled to be issued through minting.

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Ripple

While the XRP Ledger does not require transaction fees in the way Bitcoin does to reward miners,  it does mandate that a small amount of XRP be put up by the sender to be destroyed and deducted from the total supply. 

 

Like Bitcoin, the supply of XRP is limited, meaning that according to the software’s rules there will only ever be 100 billion XRP.

Useful resources

If you are interested in learning more about Cardano and Ripple, please visit Kraken’s What is Cardano ADA? and What is Ripple XRP? pages.

 

Want more in depth information on specific cryptocurrencies and blockchain projects? If so, visit our Learn Center to further your education on this ever-growing space.