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Best meme coin: XRP vs. Cardano
XRP (XRP 5.46%) and Cardano (ADA -1.61%) are both volatile cryptocurrencies. XRP, the native token of the Ripple payment network, started trading at $0.0058893 in 2013, reached an all-time high of $3.84 in 2018, but is now trading at $0.59. Cardano, the native token of a third-generation blockchain, started trading at $0.025 in 2017, set a record high of $3.09 in 2021, and is now trading at around $0.44.
So if you had invested $100 in XRP, your investment would have briefly blossomed to over $65,200 before shrinking back to around $10,000. That same $100 investment in Cardano would have grown to nearly $12,400 before falling back to $1,800 today. Investors should still buy either of these meme coins in this unstable market?
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XRP Investors Are Looking Forward to a Major Catalyst
XRP is tied to the Ripple payment network, but the token doesn’t get nearly as much attention as its underlying platform. Ripple’s network uses a blockchain-based ledger to process real-time raw payments, international transfers, and foreign exchange transactions. It claims its approach provides its customers with secure, instant, and “nearly free global financial transactions of any size, with no chargebacks.”
Several smaller financial institutions — including Travelex Bank, Tranglo and Sentbe — have already adopted Ripple as a cheaper alternative to the SWIFT (Society for Worldwide Interbank Financial Telecommunication) protocol used by most banks. However, all of these customers use Ripple’s XCurrent network, which allows them to make these transactions in regular fiat currencies instead of using XRP as a bridge currency.
As a result, Ripple’s expansion has not made XRP a widely accepted cryptocurrency. Some critics even argue that XRP is not a “real” cryptocurrency because it was not created with proof of work (Beat) or proof of participation (POS). Instead, Ripple created its entire supply of 100 billion XRP tokens before its market debut, locked 55 billion of those tokens in escrow accounts on its blockchain in 2017, and periodically releases some of those tokens to stabilize its liquidity.
XRP is not as attractive as Bitcoin (CRYPTO: BTC), which is mined with the PoW method as an asset, and its blockchain does not natively support the development of decentralized applications (dApps) such as Ethereum (CRYPTO: ETH) and other PoS blockchains. Its price is also was overloaded Ripple is facing an ongoing lawsuit from the U.S. Securities and Exchange Commission (SEC) alleging that Ripple’s offerings of $1.3 billion worth of XRP tokens over several years constituted illegal sales of unregistered securities. The lawsuit began in December 2020 and entered its final phase in April. If Ripple wins the case or reaches a favorable settlement with the SEC, its price could certainly skyrocket.
Cardano has more advantages in the long run
Cardano, like Ethereum, is a PoS blockchain that supports smart contracts and the development of dApps and other crypto assets. However, it was created to process transactions at a faster rate than Ethereum with more predictable fees.
Cardano currently processes its transactions several times faster than Ethereum. Its transaction fees, which are determined by the size of a transaction and the computing power required, are also more predictable than Ethereum’s. gas rateswhich are determined through a “dynamic pricing” model based on fluctuating network congestion rates.
Cardano created 31 billion tokens during its initial launch, and 26 billion of those tokens were sold to investors through a third-party company. The remaining 5 billion tokens were distributed to the Cardano Foundation, IOHK, and Emurgo. It currently has a circulating supply of 36 billion tokens with a maximum supply of 45 billion tokens. Like other PoS tokens, Cardano can be staked (locked into its blockchain) for set periods of time to earn interest-like rewards.
Cardano will undergo a major upgrade called the “Chang Hard Fork” by the end of July. This upgrade is expected to increase its speed, strengthen its security measures, and improve its scalability. But even after their latest upgrades, Cardano and Ethereum are still significantly slower than each other. Solana (CRYPTO: SOL), the world’s fastest PoS blockchain.
Bulls are hoping that the Chang Hard Fork will make Cardano’s blockchain more attractive to developers and drive the token’s price higher. The recent approvals of the first Ethereum spot price ETFs — which are set to begin trading on July 23 — could also pave the way for similar ETFs for smaller PoS tokens like Cardano and Solana. These tailwinds could limit Cardano’s downside potential and bring the bulls back.
Best Buy: Cardano
XRP and Cardano are highly speculative investments, so you shouldn’t put money you can’t afford to lose into either of these tokens. But if I had to pick one right now, I’d buy Cardano because it natively supports smart contracts, is faster than Ethereum, has a growing developer ecosystem, and is still evolving. Ripple’s potential win against the SEC could temporarily boost its price, but it doesn’t have any clear long-term advantages over other cryptocurrencies.
Leo Sun has no position in any of the stocks mentioned. The Motley Fool is positioned in and recommends Bitcoin, Cardano, Ethereum, Solana, and XRP. The Motley Fool has a disclosure policy.