Blockchain is often compared to the early internet: a base-layer technology that could change how information and value moves. Where the internet can spread information without central gatekeepers, blockchains aim to move money and assets without relying on a single intermediary.
Most people first hear about this space through Bitcoin and Ethereum. Bitcoin proved you can create scarce, digital money that anyone can send peer-to-peer. Ethereum took the next step by letting developers program logic (“smart contracts”) directly into the network. The story, however, doesn’t end there. The XRP Ledger (XRPL), the network associated with XRP, was built with a different target in mind: fast, low-cost payments and settlement.
Below, we’ll cover the basics, show how Bitcoin and Ethereum set the stage and then explain how the XRPL takes a different path with design choices aimed squarely at moving value quickly and reliably.
A blockchain is a shared ledger. Picture a digital notebook copied across many computers. When a new transaction is added, the network agrees on it and every copy updates. Because everyone is watching the same notebook, it’s very hard for any single party to change past entries.
Blocks bundle transactions and link to the previous block, forming a chain. That linkage makes the history tamper-resistant. To rewrite the past, you’d have to redo the work of the chain.
Bitcoin (2009) introduced “peer-to-peer electronic cash.” In practice, many treat it more like digital gold, a store of value. Bitcoin uses Proof-of-Work (PoW). Specialized computers (“miners”) race to solve puzzles. The winner proposes the next block and earns new BTC. PoW has kept Bitcoin secure, but it’s energy-intensive and deliberately slow to change state. Confirmations typically take minutes and throughput is limited.
Ethereum (2015) added smart contracts, code that runs on the blockchain, so people could build decentralized apps from lending markets to NFT platforms. Ethereum originally used PoW but now runs Proof-of-Stake (PoS), where validators lock up ETH (“stake”) to secure the network and earn rewards. PoS cuts energy usage and can help scalability, though it introduces different trade-offs (for example, capital requirements and validator set dynamics).
Together, Bitcoin and Ethereum established two powerful ideas: digitally scarce currency and a programmable settlement computer.
Launched in 2012, the XRP Ledger was designed first and foremost for payments and settlement. Its goal: confirm transactions in a few seconds, cost fractions of a cent and run reliably at scale.
Instead of mining, the XRPL uses a federated consensus process. Independent servers (“validators”) share proposed transactions and agree on final order and validity every few seconds. There are no block rewards to compete for. Validators’ job is to maintain integrity and liveness by reaching supermajority agreement. The result is quick finality, typically 3–5 seconds, with very low energy use.
Two XRPL design choices are especially relevant to people who want to move value:
● Native features at the base layer. The XRPL includes built-in payments, escrow and a decentralized exchange (DEX). Because these are part of the core protocol, users don’t need extra smart contracts just to send, time-lock, or swap assets.
● An amendment (upgrade) system. Think of it like opt-in, network-wide software updates. Proposed features go live only after extended validator approval (supermajority agreement sustained over time). This lets the ledger evolve while keeping changes predictable and coordinated.
One practical example of the XRPL’s “payments-first” design is Auto-Bridging on its DEX. Because XRP is the native asset, the exchange can automatically route a trade through XRP (or other paths) if it finds a better overall price. That enlarges the effective order book and can improve liquidity without adding extra steps for the user.
Here’s a simple way to frame the differences:
● How they secure the ledger
○ Bitcoin: Proof-of-Work - high security via mining, slower settlement, high energy cost by design.
○ Ethereum: Proof-of-Stake - validators stake ETH to secure the network; faster than PoW, far lower energy use, different trade-offs.
○ XRPL: Federated consensus - validators reach quick agreement without mining or staking; finality in ~3–5 seconds and minimal energy usage.
● What they’re optimized for
○ Bitcoin: Durable, censorship-resistant store of value; simple transaction model; conservative changes.
○ Ethereum: Programmable platform for decentralized applications; rich smart-contract ecosystem.
○ XRPL: Payments and settlement, with native features (payments, escrow, DEX) built into the base layer to reduce friction and fees.
● Transaction Cost and speed
○ Bitcoin: Minutes to finalize; fees vary with congestion.
○ Ethereum: Generally faster than Bitcoin; fees and speeds depend on network load and whether you use Layer-2 solutions.[1]
○ XRPL: Typically 3–5 seconds to confirm; fees are usually fractions of a cent.
● Upgrades
○ Bitcoin/Ethereum: Network improvements via formal proposals and broad community coordination; activation methods vary by chain.
○ XRPL: Amendments - features activate after sustained supermajority validator support, providing a clear path for coordinated upgrades.
For everyday users, the takeaway is straightforward: if your priority is programmable logic and a vast app ecosystem, you’ll explore Ethereum. If your priority is a long-term, scarce digital asset, you’ll look at Bitcoin. If your priority is moving value quickly and cheaply, especially across currencies, the XRPL’s design is built for that job.
Bitcoin and Ethereum kicked off the movement, first with digital currency then with programmable finance. The XRP Ledger charts a third path: payments and settlement with fast finality, low fees and useful financial primitives available out of the box.
Different architectures serve different needs. It’s unlikely there will be a single “winner.” Instead, expect a mix: Bitcoin as durable digital money, Ethereum as a programmable platform and the XRPL as a high-throughput settlement layer. Understanding these design choices helps you pick the right tool for the job you care about most.
[1] Layer-2: Solutions are built on a blockchain (like Ethereum or Bitcoin) to process transactions faster and cheaper off-chain, while using the main chain's security. Source: "Layer 2 Scaling," Ethereum, accessed August 25, 2025, https://ethereum.org/en/developers/docs/scaling/layer-2/.
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