I asked this specific question because I read a wonderful post written by Tom Sean Kelleher answering a similar question and I'd like to share that information here.
Q: Please list technical and fundamental reasons how RIPPLE is better than ETHEREUM?
A: At this point in time, philosophically, they are addressing fundamentally different paradigms so there is no "better".
Ripple's Codius was on track to compete directly with Ethereum but when it comes to distributed computing Ripple engineers noted there were other projects addressing this with what they considered far better approaches and were much further along (notably Docker) so they shelved this track of development in favor of focusing on another protocol which could deliver networked trustless escrow between any two distributed ledgers capable of cryptographically proving receipt of payment. They dubbed this "Interledger Protocol" or ILP which was heavily influenced by the feedback and direction from the Internet Payments work group at W3C. The goal is to establish a low-level protocol for how any two ledgers, properly configured, can agree to an exchange of value alterations to each other or token exchange and execute it simultaneously or not at all (atomically) without a trusted third party.
For any ledgers which integrate ILP including Bitcoin, Ethereum, Ripple, most alts, bank chains, federal chains, etc there would be an instant, native portal to any other chain ... Coordinating buy/sell offers would shift from centralized exchanges prone to failure and theft, to automated pathfinding algorithms, likely hosted on Ripple like chains or Ethereum dapps designed to map hawala trust lines and connect any two value exchangers in the world.
This was a bit disconcerting at first to small-time XRP investors but in recent weeks Ripple has come back strong with its banking RCL pitch in its very specific use case as a banking and corporate supply-chain cross-border payments solution. Currently, RCL and its mainline products "RippleConnect" and "RippleStream" are transitioning from 'alpha' testing to enterprise-ready production and they are introducing a new incentive program for disributing XRP, not to developers, validators or participants but to market makers. The goal is to buffer the volatility and fatten the margins for those able to facilitate increasing liquidity. Ideally, the operations of market-making can be automated and secured with decentralized computing solution such as Ethereum funded with any source of value such as Bitcoin or XRP. Since Ripple sits on a mountain of XRP, offering it up as an the initial pool of incentive source will chew through their stash and also accelerate drop destruction. XRP will climb slowly but steadily, the overhead of market makers is not particularly high, so selloff rate will be considerably lower than say bitcoin miners, and there will be active competition to provide faster and better market making, not thicker and increasingly redundant security in the form of carbon.
They are able to this because Ripple specifically set about addressing integration of distributed ledger technology within the current regulatory framework of cross-border payments while also working with regulators and Internet standards workgroups to craft forward looking regulation and potentially legislation which improves on relevant legal concepts for value exchange as well as criminal activity oversight monitoring and tracking while minimizing the effects antiquated laws and practices have on bottle necking the capability of the technology to drastically increase the worldwide capability to exchange value. This is what Chris Larsen is talking about when he describes the Internet of Value.
Technically speaking, Ethereum is still on PoW while Ripple has been using RCP for 4 years which is both faster and designed for a long term, sustainable, decentralized validation network. Before you jump down my throat, I know that many, particularly the Bitcoinistas here on Reddit, stop at the initial "pre-mine" token strategy or focus on Ripple's essential monopoly on contributions to their open source code as well as the currently exclusive topological control they exert over the validator network, reflexively yell CENTRALIZATION and turn heel without fully observing the code or how their strategy will manifest into a network of decentralized validators with mutual interest in keeping it decentralized. Even when peter todd claimed to have "analysed" the ripple consensus protocol he openly admitted to not actually examining the consensus protocol bit in the paper itself and then confirmed so on Twitter. I wrote about Ripple's path to decentralization last year
Perhaps Ethereum's strongest characteristics are its positive community energy, functional governance, and quality leadership. A rumor has been circulated recently that VB almost came to work for Ripple but as a non-college graduate his visa from Canada could not be secured ... Something ironic about that I'm sure ... But when it comes to designing a system for transporting value that meets all stakeholders parameters instead of staking its future to a non-cooperative political stance, Ripple is way ahead of the game.
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