XRP Ledger (XRPL) vs Bitcoin (BTC): Supply Integrity and Usability as a Currency

The XRP Ledger (XRPL) has been in the spotlight lately after claims that Ripple could boost XRP's total supply beyond its 100 billion token cap.

The XRP Ledger (XRPL) has been making headlines recently following claims that Ripple could increase XRP’s total supply beyond its 100 billion token cap. Critics, particularly Bitcoin maximalists, suggest that Ripple might simply mint additional XRP, impacting its scarcity. However, validators within the XRPL community have provided evidence to refute these claims.

This discussion ties into a broader theme within the crypto sphere: the significance of blockchain transparency and supply integrity. In contrast to Bitcoin, which encountered a bug that generated excess tokens, the XRPL has safeguards in place to prevent such occurrences. This debate also raises questions regarding Bitcoin's usability as a currency, with taxation policies posing a challenge to widespread adoption.

.@Jay_SpendDBits has solved this problem @jack. Please check out the @Spend_The_Bits Payments App, where you can utilize and spend your bitcoin the way Satoshi envisioned. https://t.co/SWGxYXY3xR

XRPL Supply: Unalterable From Inception

The XRPL was launched in 2012 with a fixed supply of 100 billion XRP, and from the get-go, the network ensured that no additional XRP could be minted. The entire supply was initially placed in a genesis account with cryptographic keys that are publicly available.

Due to this transparency, anyone can verify that the supply remains unchanged. The ledger's architecture includes an "invariant checker," a built-in security measure that prevents unauthorized token creation. Every transaction undergoes this check, and any attempt to mint additional XRP is instantly blocked by the system.

Related: BlackRock ETFs, BTC, and XRP—Is a Sovereign Wealth Fund the Next Big Catalyst?

How XRP Differs From Bitcoin in This Aspect

This mechanism sets XRP apart from Bitcoin, which encountered a critical flaw in 2010 when an accidental bug resulted in the creation of 184 billion BTC. Although the Bitcoin network swiftly rectified the issue, it highlighted the importance of robust security measures in blockchain design. The XRPL has never faced such a vulnerability, attesting to the integrity of its supply setup.

One of XRP's defining characteristics is its deflationary nature. In contrast to Bitcoin, which utilizes mining rewards that gradually increase the circulating supply over time, XRP transactions gradually reduce the supply.

XRP's Inherent Burn Mechanism Explained

Each transaction incurs a small amount of XRP that is burned as a fee, leading to a gradual yet continuous decrease in the total XRP available. This mechanism ultimately strengthens XRP's long-term scarcity rather than diminishing it.

And despite claims by critics, Ripple does not possess the authority to mint new XRP. While some argue that Ripple could alter the XRPL's code and modify supply mechanisms, such a change would not gain acceptance from the rest of the network. Similar to Bitcoin, forking the XRPL does not guarantee adoption, as validators and developers maintain the decentralized integrity of the ledger.

Related: Top 5 Trending Crypto on CMC: BTC, XRP, ETH, ETHW, CAKE

Bitcoin's Roadblock: Taxation Policies

Apart from the supply narrative, another key obstacle to Bitcoin's utility as a currency is taxation. Current regulations require users to track buy and sell values for every transaction, incurring capital gains tax obligations. This ultimately deters everyday use, making Bitcoin more suitable as an investment rather than a medium of exchange.

Thus, if governments were to remove these regulatory hurdles, Bitcoin and other cryptocurrencies could experience broader adoption as usable currencies. Additionally, technological advancements in blockchain-based payment systems would likely accelerate, enhancing usability and efficiency.

This article is provided for informational and educational purposes only. It does not constitute financial advice or advice of any kind. Coin Edition will not be liable for any losses incurred as a result of the utilization of content, products, or services mentioned. Readers are advised to conduct thorough research before undertaking any actions related to the company.