MN504 Networked Application Management: Bitcoin and Ripple Report

This report provides a comprehensive analysis of Bitcoin and Ripple, two prominent cryptocurrencies, within the context of networked application management. The paper begins with an introduction to both Bitcoin, operating on a public blockchain for digital currency transactions, and Ripple, a technology and digital payment network utilizing XRP. The core of the report delves into Ripple's architecture, highlighting its cloud service and Python-based agent for event processing, and its features, including fast international transactions and low commission rates, while acknowledging its challenges, such as centralization. The report also explores various applications of Bitcoin, including its use as a platform for services like Uproov and Gyft Block, and as a system of record for cloud storage solutions. Furthermore, the paper provides a detailed comparison between Ripple and Bitcoin, outlining their similarities, such as decentralization and open-source protocols, and their key differences, including consensus mechanisms, transaction speeds, and the nature of their networks. The analysis includes a table summarizing key differences in developers, transaction times, costs, and energy consumption. The report concludes that while both cryptocurrencies have their merits, Ripple may be considered superior to Bitcoin at this time.

Running head: Network application management
Network application management
Name of the Student
Name of the University
Author Note

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1 Table of Contents
Introduction:...............................................................................................................................3

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2 Introduction:
The purpose of this paper is to discuss bitcoin and ripple. The bitcoin operates on the
public ledger of public blockchain which can support the digital based currency that is
utilized for the payment for products, goods and services. Primarily the bitcoin is known for
cryptocurrency that is based on bitcoin. It is actually based on the concept of blockchain as
well as a public ledger of record keeping as well as transactions that are verified [1]. The
confirmation of bitcoin related transactions can take so much times with a cost of high
transaction. On the other hand, ripple is a technology which is known as for the protocol and
digital payment network. Though, the ripple is also having the own cryptocurrency of it
which is also known as XRP which is actually a payment settlement, remittance system as
well as asset exchange which can work more such as the SWIFT that is a service for the
security transfer and international money, used by the banking networks and financial
intermediaries. This paper will discuss Architecture, Features and Challenges related to
ripple. It will also discuss about the differences and Similarities between Ripple & Bitcoin.
3 Ripple:
3.1 Architecture:
(Figure: Ripple architecture)

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The figure is summarising the architecture of ripple. A cloud service and a python
based agent monitoring file system processes the events as well as manages the execution
process of action. A hybrid computing mode is leveraged by the ripple, in that the events can
be locally filtered via the cloud based services. The cloud services of ripple can provide a
platform that is saleable for processing the events, managing the agents, evaluating the rules
as well as coordinating the execution procedure of action [2]. A rest API is exposed by this
service, which is supported by Lambda function which is serverless. The action can be
performed by the job runners that is supported by one of the agents or by a runner that is
based on cloud to perform suitable actions by the external services.
3.2 Features:
Unlike Ethereum and Bitcoin, ripple does not have a blockchain. Though a crypto-
currency that is without blockchain may sound so much strange, as if there is no existence of
blockchain the how the transactions will be verified [3]. So, for that ripple is having an own
pattern of its which is known as Ripple protocol consensus algorithm (RPCA). The features
that ripple is having are as follows:
 Fast international transactions. The average time that ripple takes is almost seconds
per transaction.
 It is also known as the low commission currency exchange. Ripple can be defined as a
mediator; however, this is much cheaper than the USD.
 Ripple was designed originally for the day to day payment system. It is so much
power safe than the bitcoin too.
 Ripple is also having the ability that it can be exchanged to any of the currencies with
a commission that is so less or minimal.

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3.3 Challenges:
There is not anything existed that is a 100% safe in investment as well as each of the
decision is having the own risk of them. The challenges that ripple is having is as follows:
Ripple is centralized highly. The entire method of this cryptocurrency is for avoiding
the control that is centralized.
In addition to the centralization, currently this is so much a monopoly as the Labs of
ripple that is owning 61 percent of coins [4].
This is open-source as well as so much smart. However, once the code can be
accessed, there is a huge chance that the hackers will try to hack this. Some of them
can also get success.
4 Applications of bitcoin:
The bitcoin and blockchain has been becoming one of the discussed most buzzwords,
that to not only in the industry of payment but also across the multiple industries. There are
several applications of bitcoin. They are as follows:
4.1 As a platform:
4.1.1 Uproov:
The bitcoin technology can be used as an inexpensive and convenient notary service.
As example it can be said that applications such as Uproov that is a multimedia platform in
smartphone can be instantly notarised that to as soon as the users creates a video, image or
any sound recording [5]. Actually, it can be used for notarizing the proof of ownership of the
digital creation.
4.1.2 Gyft Block:
The bitcoin can also assist the retailers who offers loyalty programs of gift cards by
making the procedure so much cheaper as well as much secure through cutting out person

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who remain in the middle as well as utilizing the unique verification capabilities of
blockchain [6]. The gyft block is basically a partnership between the chain of bitcoin API
developer and gyft that issues a gift card that is digital which can be traded securely on the
public ledger of blockchain.
4.2 As a system of record:
4.2.1 VentureBeat (Distributed cloud storage):
The cloud based storage will be one more application of that the business can take
benefit. The Storj company is utilizing the bitcoin for providing the clients with fast,
affordable as well as secure cloud based storage [7]. The founder of VentureBeat said that
“Simply using excess hard drive space, users could store the traditional cloud 300 times
over.” It was also added by Wikinson that ““Considering the world spends $22 billion + on
cloud storage alone, this could open a revenue stream for average users, while significantly
reducing the cost to store data for companies and personal users.”
4.2.2 Yoti:
The technology is offering a solution for many of the identity issues that are digital,
where the identity may be authenticated uniquely in an immutable, secure as well as
irrefutable manner [8]. This technology can be applied for identifying the applications that
are related to online account login, IDs, E-residency, birth certificates as well as passports
[9]. The organisations are utilizing this for validating the identity of an individual on the
mobile device of them.
5 Differences and Similarities between Ripple & Bitcoin:
As there are so many similarities and differences between ripple and bitcoin. They are as
follows:

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5.1 Similarities:
 Both the ripple and bitcoin are decentralized.
 Both of the bitcoin and ripple are the protocols that are open-source as well as both of
these are not owned by anyone.
 Both of these use the algorithm for ensuring that the networks of them come to the
similar conclusion [10].
 Both of these is able to eliminate many of the monetary trust requirements such as
trust in the financial service organisations, in the central banks as well as in the legal
systems etc.
 Both of these allow for the p2p, free and anonymous transactions across the internet.
 For redeeming XRP or Bitcoin, the users require a gateway organisation for helping.
5.2 Differences:
 The ripple and bitcoin use various methods for reaching the consensus of network.
Mining (Proof of work) is used by bitcoin, and on the other hand ripple utilizes an
iterative consensus procedure [11].
 Bitcoin is so much slower than the ripple. Ripple takes a few seconds for finalizing
the transactions as well as ripple is also power efficient.
 Ripple can be considered as transaction network that is decentralized, on the other
hand bitcoin is a decentralized currency that is digital based. Ripple contains also a
digital currency that is known as XRP or ripples.
 The network of bitcoin is able to track the movement of bitcoin. On the other hand,
the network of ripple is able to track any type of information. Ripple is able to track
the account balances of any currencies that are existed [12].

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Platform Ripple (XRP) Bitcoin (BTC)
Developers
A huge group of the developers
of Ripple
A tiny group of the developers
Ownership Private organisation Public
Time of Transaction 4 seconds approx.
Approx. 1 hour and it also
depends on chosen fee.
Average cost of
transaction
0.004 dollars $40 dollars
Transactions in every
second
1,500 approx. 10 approx.
Cost of Energy in
every transaction
Negligible 250 kWh approx.
Processing of
algorithm
Consensus Proof of work

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Inflation
Deflationary or Static. Almost
an indiscernible amount of the
XRP is destroyed in every
transaction.
The supply of coin is
increasing to 21 million caps
by 2140.
Limit of Coin supply 100 billion 21 million
6 Conclusion:
Thus, it can be concluded from the above points that the bitcoin is actually on the basis
of the concept of blockchain as well as a public ledger of record keeping as well as
transactions that are verified. The confirmation of bitcoin related transactions can take so
much times with a cost of high transaction. On the other hand, ripple is a technology which is
known as for the protocol and digital payment network. Though, the ripple is also having the
own cryptocurrency of it which is also known as XRP which is actually a payment
settlement, remittance system. The report has described the architecture of ripple, the features
and challenges related to ripple. The report also discussed applications of bitcoin. The report
also describes similarities and differences between ripple and bitcoin. So, it can be concluded
that the ripple is better than bitcoin at this moment.

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10.2139/ssrn.3293904.
[3] M. Perugini, "Monete Digitali Alternative: Ripple (Altcoins: Ripple)", SSRN Electronic
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[4] D. Ivanov, B. Sokolov, I. Solovyeva, A. Dolgui and F. Jie, "Ripple Effect in the Time-
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[8] Foroglou, George, and Anna-Lali Tsilidou. "Further applications of the blockchain." 12th
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[9] Armknecht, Frederik, et al. "Ripple: Overview and outlook." International Conference on
Trust and Trustworthy Computing. Springer, Cham, 2015.
[10] Dolgui, Alexandre, Dmitry Ivanov, and Boris Sokolov. "Ripple effect in the supply
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[11] Cao, Xin, Qing-Chang Zhong, and Wen-Long Ming. "Ripple eliminator to smooth
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[12] Heilman, Ethan. "One weird trick to stop selfish miners: Fresh bitcoins, a solution for
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