In the near future, both cryptocurrencies will have a major impact on the gaming industry. NEM has been in the news recently, with their high speeds and low fees. XRP has been making waves as well, with its interconnectivity and global reach.
The xrp 2017 bull run chart is a chart that shows the price of XRP in relation to the time. It can be seen that there was a big spike in the price of XRP during the year 2017, and it is predicted that this will happen again in 2021.
With blockchain technology’s continuous growth and popularity, it’s only a matter of time until the world’s businesses and organizations join the fight. Rather of wasting time, energy, and money building their own blockchains from the ground up, why not use one that has already been proven and tested? This is why we’re comparing NEM and Ripple, two enterprise-grade blockchain networks built for speed, efficiency, security, and scalability.
When big corporations need a strong digital infrastructure to support their worldwide operations, they turn to ecosystems and technology created by initiatives like NEM and Ripple. But who is the finest of the best among them? Would it be NEM’s low-cost, high-speed smart contract platform or Ripple’s peer-to-peer bridge to link the world’s currencies? Our NEM vs. Ripple comparison aims to identify a winner between the two if at all feasible.
Table comparing NEM and Ripple
NEM vs. Ripple: What’s the Difference?
Although both NEM and Ripple are intended for business and mission-critical applications that need high processing speeds and scalability, they are programmed for different audiences. Ripple is a distributed ledger, not a blockchain, that was created primarily for the purpose of processing international payments and cross-border settlements. NEM, on the other hand, is a more flexible blockchain network that can be used in a variety of sectors thanks to its smart contracts.
What Is NEM and How Does It Work?
NEM stands for “New Economy Movement” and refers to itself as a “smart asset” blockchain network. It is primarily a smart contracts platform that promises to make managing and trading digital assets or data more quicker, cheaper, and more efficient.
NEM was created in 2015 as a fork of the NXT blockchain network. However, most of its underlying technology is unique, and NEM has built a totally new codebase from the ground up.
NEM’s main emphasis as an open-source protocol is on high performance and flexibility for large-scale applications, as well as providing an interoperable bridge layer between public and private blockchains. NEM is aiming its blockchain towards the business and institutional sectors, where it may be used as a permissioned, private ledger. As a result, NEM’s blockchain is extremely flexible and may be utilized in a variety of applications, including government, finance, retail, logistics, healthcare, telecommunications, and more.
What is the Proof-of-Importance (PoI) Blockchain for NEM?
NEM is considerably more flexible than Ripple, as we’ll see later in our NEM vs. Ripple comparison, in that NEM’s blockchain solutions may be embraced by a wider range of sectors. This is all due to NEM’s NIS1 blockchain, which uses a proprietary Proof-of-Importance (PoI) consensus mechanism. PoI allows anybody to operate a complete node on NEM’s NIS1 blockchain, even with low-end or older computer gear.
PoI operates by measuring each node’s token holdings, frequency of transactions, and who they interact with on the network via a process known as ‘delegated harvesting.’ This automated procedure will then use these data to give an estimated “importance score” to each node on the NIS1 network based on PoIs. This metric assesses a node’s total value to the blockchain as well as their ability to act in the best interests of the NEM ecosystem.
As a reward and ongoing motivation to continue powering NEM’s blockchain, nodes will get a part of the fees that they assisted in processing. PoI is said to be a more equitable and efficient approach for achieving agreement and governance while maintaining decentralization and security. It uses less energy (and therefore is more ecologically friendly) than Proof-of-Work (PoW) blockchains and is more secure than Proof-of-Stake (PoS) networks.
How Does NEM’s “Harvesting” Work?
In this NEM vs. Ripple comparison, we’ll examine at how NEM’s NIS1 blockchain may use token “harvesting” instead of PoW-style mining, which can have poor scalability and result in network congestion, sluggish processing times, and expensive gas costs. A network member on NEM would just need to connect their account to an existing super-node to get started. Regular node validators may now use the computing capabilities of super-nodes to finish blocks.
This avoids the need for the user to purchase hardware. Regular nodes may lend their PoI score to super-nodes, increasing their chances of processing new blocks together. Because the task is done only by the super-nodes, this collaboration may decrease energy usage. The computer of a node validator doesn’t even have to be on throughout the “harvesting” operation. The costs will be evenly distributed as long as they are linked to a super-node.
The main benefit is that PoI can take use of the same scalability as PoS blockchains, with high throughput and cheap fees, as well as being extremely interoperable and resilient. Since its main-net debut in 2015, NIS1 seems to have never had a single outage or malicious breach. Performance is a top priority, with each NIS1 block capable of processing up to 120 transactions per second and a total computing rate of over 4,000 transactions per second (TPS).
In the Real World, What Can NEM Do?
NEM is a highly scalable smart contracts blockchain designed for adoption by businesses that need dependable, safe, and quick computing, as we’ve discovered so far in our NEM vs. Ripple comparison. NEM has collaborated with hundreds of businesses to use its NIS1 blockchain so far. The NSI1 blockchain is being used by FIX Network, a Lithuanian-Israeli telecommunications firm, to improve the security of billions of SIM cards across the globe and avoid vulnerabilities like SIM swapping.
Meanwhile, LuxTag is collecting data from numerous NFC trackers, QR codes, and barcodes put on products across the globe into the NIS1 chain, which is designed to certify and prevent counterfeit goods from flowing. GUBI is one of the largest art trade sites in the world, and the largest in China. Since then, they’ve moved their whole database on the NEM blockchain. NEM’s network, on the other hand, is being used by Dragonfly Fintech to speed up cheap cross-border payments.
These are only a few of the alliances formed with NEM in order to utilize its NIS1 blockchain. However, due to the upcoming main-net launch of NEM’s fresh new blockchain in March 2021, this will soon grow much more. The four-year development of this enterprise-grade Proof-of-Stake+ (PoS+) blockchain, dubbed Symbol, will offer new NEM features like as better interoperability, performance, and sophisticated tokenization. NIS1 will be accompanied with a symbol that will compliment it.
What Are XEM Cryptocurrency Tokens in NEM?
After the introduction of Symbol in Q1 2021, NEM now has two distinct cryptocurrencies in its ecosystem: NIS1’s XEM and Symbol’s XYM. We’ll concentrate on the older XEM coins in our NEM vs. Ripple comparison since XYM is still too new to fully evaluate. XEM tokens are the principal currency of the NIS1 decentralized public blockchain, and they are primarily utilized for transactions and fee payments throughout the chain, as well as rewarding and motivating the network’s nodes.
NEM created XEM in conjunction with a deflationary tokenomics model, in which the total quantity of all XEM tokens is set at 8,999,999,999. When it was revealed that over 523,000,000 XEM tokens were stolen in a cyber theft attempt against Japanese exchange Coincheck in 2018, the value of NEM’s native XEM plummeted. The total worth of all those cryptocurrencies was approximately $500 million at the moment. Since late 2020, the value has been gradually increasing.
The price of one XEM is now $0.348136 in this NEM vs. Ripple comparison. With a circulating quantity of 8,999,999,999 XEM and a market valuation of $3,133,222,659, NEM’s NIS1 native coin would be the 49th most valuable token. Symbol is intended to replace NIS1, which means that XEM holders will be able to opt-in for a 1:1 exchange into Symbol’s XYM, despite the fact that they are currently side-by-side.
What Will NEM’s Roadmap Look Like in the Future?
The most important plan for the NEM network at the time of creating this NEM vs. Ripple comparison was the so-called “NEM 2.0” upgrade. This was finished as of the Symbol blockchain’s main-net release on March 17th, 2021, and is currently ongoing. The transfer from the NIS1 network to the new and upgraded Symbol blockchain will be marked by NEM 2.0. The symbol is intended to be an overall upgrade over NIS1 and to provide additional enterprise-focused functionality.
Symbol will primarily see improved speed and scalability over NIS1, as well as increased efficiency, which will lower costs and allow for easier interaction with other blockchains. Because the technology developed for NIS1 is incompatible with the current Symbol, which operates on a modified Proof-of-Stake+ (PoS+) system, this conversion is required. A four-tiered architecture is another advantage of Symbol, which should make it more durable, secure, and fast.
Review of NEM
To sum up the first part of our NEM vs. Ripple comparison, NEM’s blockchain ecosystem – which includes both NIS1 and Symbol – continues to demonstrate that it is open for business. NEM’s robust, efficient, and quick blockchain has proved to be a very effective and flexible instrument in handling massive data and assets driven by smart contracts, whether it’s a major international corporation or a worldwide governmental entity.
NEM Pros
- A blockchain that is extremely modular and adaptable, allowing it to be designed for a wide range of applications and industries.
- To support future network expansion, there is a lot of scalability with fast processing rates and cheap costs.
- Because of the PoI consensus, it is energy efficient and therefore ecologically friendly.
- Because of its minimal computing needs, it is easily accessible to new node validators.
- Highly safe and reliable, with a low risk of downtime and a low likelihood of malicious attack.
NEM Cons
- With the exception of NEM 2.0 and the transfer from NIS1 to Symbol, there is no defined roadmap timeframe.
What Is Ripple and How Does It Work?
Ripple’s foundations are based on the XRP Ledger, or XRPL, an open-source distributed ledger built around a vast worldwide ecosystem of peer-to-peer systems. As a result, Ripple, unlike NEM, is not a blockchain. Despite this, it is a decentralized network. Ripple varies from NEM in terms of purpose and design. Ripple was designed to concentrate primarily on the monetary and financial sectors, rather than developing a highly modular computational framework.
Through its permission-less XRP Ledger, this includes international or cross-border payments, settlements, and remittances. In this regard, Ripple’s main aim is to power billions of dollars in real-time and frictionless worldwide money transactions and exchanges at low costs. Furthermore, they are constructing bridges to facilitate the exchange of various regional currencies. This technology, according to Ripple, has greater scalability than a conventional blockchain.
What Is Ripple’s XRP Ledger and How Does It Work?
The relative slowness of conventional and known ways of transferring money across borders, which is highly inefficient, time-consuming, and expensive, is worth emphasizing in our NEM vs. Ripple comparison. Ripple’s XRP Ledger will be used to address this problem in both directions. This is due in part to XRPL’s usage of a distributed ledger rather than a traditional blockchain architecture, which resulted in Ripple being one of the fastest decentralized systems ever.
Even in its present version, XRPL can handle at least 1,500 transactions per second (TPS) and can grow up to 65,000 TPS. This has enabled settlements to be completed in a very short period of time and with little to no costs, even the huge chunks of billions of dollars paid by banks across borders. Simple payments made or received anywhere in the globe, according to Ripple, may be completed and paid in as little as 3-5 seconds. In the meanwhile, XRPL’s typical transaction costs are approximately $0.0002.
This is a major improvement over the existing method, which may take several days and cost tens of thousands of dollars in fees alone. This new system is the result of many cutting-edge technologies that have been integrated into its network. One of them, similar to NEM, offers smart contract capabilities. Ripple’s XRPL can now separate frequent or smaller payments made via its distributed ledger’s smart contracts from bigger settlements, allowing for faster processing.
What Can Ripple’s Distributed Ledger Be Used For?
Ripple’s XRP Ledger serves as a currency “bridge” in addition to handling large and small money transactions. This makes it easier to swap currencies from various parts of the world. Ripple’s network, in fact, has its own decentralized exchange embedded right into the ledger. This exchange, which is also driven by smart contracts, enables Ripple users to trade assets like as XRP tokens, IOUs, and other digital assets. IOUs are obligation-like assets that may be used to digitally represent a physical item on Ripple.
This involves adding tokenized value to other cryptocurrencies, fiat currencies, commodities, derivatives, airline miles, and credit card points, among other things. This convenience can be seen in the fact that Ripple is extremely scalable, due to the fact that it can be simply incorporated into current payment channels, allowing it to massively expand its transaction-per-second count. Ripple is also extremely energy efficient, as we saw in our NEM vs. Ripple comparison previously.
Unlike NEM’s revolutionary PoI (and eventually PoS+) consensus algorithm, Ripple uses Federated Byzantine Agreement to establish common ground for its on-chain governance, in which nodes vote to verify transactions and enable data to be added to the ledger. This technology is designed to guarantee maximum decentralization while also prohibiting network members from abusing the system. Its distributed ledger is also much more secure and resilient than competing blockchains.
In the Real World, How Has Ripple Been Used?
Despite the fact that we’ve shown in our NEM vs. Ripple comparison that NEM has had some success in recruiting business partners, Ripple has had greater real-world adoption. Over 100 of the world’s largest banks and financial institutions use XRPL or one of Ripple’s built-in solutions. Spain’s Banco Santander has handled over €450 million in transactions via the XRPL, with additional institutions including Mitsubishi MUFG and Standard Chartered joining in.
RippleNet, their global payments and settlements system, would be the main interface for anybody utilizing the XRPL. RippleNet is a global payment network that works with over 120 fiat currencies and is accessible in over 55 countries. Later, Ripple developed “on-demand liquidity,” or ODL. Ripple’s XRP coins may be used as a bridge between two fiat currencies, enabling financial institutions to avoid having to pre-fund their destination accounts, lowering costs.
Next, Ripple provides a line of credit to RippleNet users, enabling them to obtain upfront credit agreements using XRP tokens on the fly. Ripple is also developing new tools to complement its current offerings. RippleX is a platform for developing XRPL tools or integrating them into existing applications. The ability of Ripple’s XRPL to operate seamlessly with legacy systems eliminates the need for costly overhauls of current IT infrastructure.
Ripple’s XRP Cryptocurrency Tokens: What Are They?
The XRP token is the native currency of the Ripple distributed ledger. As we’ve seen, XRP tokens primarily serve as a bridge currency, allowing value to be transferred from one fiat currency to another. This is what allows Ripple’s XRPL to power fast, simple, and low-cost currency trades all around the globe. Meanwhile, XRP may be used as collateral, for as via an ODL or a line of credit, allowing for faster cross-border settlements.
Otherwise, XRP tokens may be used to trade tokenized copies of real-world assets or IOUs on the built-in decentralized market. This usefulness is what led to Ripple being sued by the US Securities and Exchange Commission, or SEC, over whether Ripple’s use of XRP cryptocurrency in its global network qualifies them as securities, a case that is still continuing as of this NEM vs. Ripple comparison. The price of XRP coins has been very volatile as a result of this.
One XRP coin is now valued approximately $1.60 at the time of writing this NEM vs Ripple comparison, and is steadily increasing due to continuing hope for a favorable result in the SEC action. Ripple’s XRP coins now have a market value of $72,455,121,725, making it the fourth-largest cryptocurrency in the world. With a limited total supply, XRP’s entire tokenomics was intended to be deflationary. Large escrow releases, on the other hand, have flooded the XRP market with liquidity.
What Will Ripple’s Roadmap Look Like in the Future?
We were unable to locate a single plan or timeline provided by Ripple when doing our NEM vs. Ripple analysis. For the time being, we expect Ripple to concentrate on its legal action against the SEC. Other than that, we should expect Ripple to extend its main services. To begin, there’s Interledger, an open-source protocol for money transfers and payments across several ledgers, allowing for compatibility with networks other than Ripple’s XRPL.
This involves enhancing the XRPL’s advantages, such as fast processing times and cheap costs. PayString, a new universal payments identifier that incorporates parts of Interledger’s interoperability features, is another project being worked on via RippleX. PayString uses a unique payment address that enables users to send and receive money across several networks. It’s being used for P2P transfers, e-commerce, subscriptions, and invoicing, among other things.
Review of Ripple
Now that we’ve completed the second part of our NEM vs. Ripple comparison, it’s obvious that Ripple lacks NEM’s sheer versatility, since it has only been tested and designed for use in settling payments or big money transfers.
However, this has enabled Ripple to focus on one objective, which we believe will be a powerful disruptor in the existing system, bringing about a much-needed evolution for cheap, quick, and seamless money movement.
Pros of Ripple
- Very scalable (up to 65,000 TPS) and capable of competing with big centralized systems (i.e., VISA).
- In comparison to many other blockchains, it is much more energy efficient and therefore ecologically friendly.
- Payments and big settlements are processed in seconds with little to no costs.
- It can be readily incorporated into existing, legacy IT networks without requiring a complete redesign.
- A lengthy list of collaborations with major financial organizations and banks.
Cons of Ripple
- There is no clear roadmap timetable in place, and the SEC’s action has added to the uncertainty.
Conclusion: NEM vs. Ripple
Vs there you have it: a detailed comparison between NEM and Ripple. But, because this is a contest, there has to be a winner, right? Could one of these two enterprise-ready, enterprise-friendly blockchains (and one distributed ledger) emerge victorious? This is a difficult decision to make since the target audiences of NEM and Ripple are very different. However, in our NEM vs. Ripple comparison, we’re going to choose Ripple as the winner, and there are several compelling reasons for this.
Ripple’s XRPL distributed ledger needs to be recognized, despite the fact that it is a bigger and more popular “blockchain” in terms of value than NEM. So far, no rival has been able to match Ripple’s ability to create a decentralized network capable of processing billions of dollars in payments and settlements in seconds for little to no cost, while also being selected by so many businesses.
Ripple has come extremely near to broad business use of blockchain-esque technology that we’ve seen thus far, with major banks across the globe as clients. Nonetheless, it’s not as though NEM isn’t deserving of attention. Given the stiff competition, such as Ethereum, it remains to be seen if they can compete on their own. Despite this, its unique concepts have led in the development of a strong blockchain that exhibits a remarkable level of seamless interoperability.
In the best crypto under 1 cent article, I compare NEM and Ripple. The article discusses how XRP has a higher maximum speed, but NEM is better for those looking for a stable coin.
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