In the latest cryptocurrency news, we have witnessed exciting products in the industry. Notably, some projects are unique while others tend to look similar. For crypto lovers, it is not hard to notice that projects like Ethereum and NEO have some striking similarities.
Despite the industry witnessing an increase in the number of projects, Ripple and Stellar appear to stand out from the pack. These two projects are gaining interest and are appealing to future-minded individuals. Both Ripple and Stellar have some similarities in identity and technologies. And the thing about these is that both cryptocurrencies had awesome cryptocurrency news in the past. Both of them want to solve the issue of a crossborder payment system.
However, the two projects tend to differ in terms of philosophies and the general purpose within the cryptosphere. Here is a breakdown of the similarities and differences between the two projects. In this ripple vs stellar comparison, we will try and compare both and see which one has a better consensus mechanism for international transfers. Our comprehensive guide is the ultimate comparison between ripple and stellar and will help you understand which digital asset is used where and what’s so special about it.
Understanding Ripple (XRP)
Brad Garlinghouse is the CEO of Ripple protocol. The blockchain technology created by ripple is used by banks on operations such as transferring money worldwide. Basically, it is a crossborder payment solution with a close to 0 fee that doesn’t involve so many third partys and that allows banks to send money from a place to another in seconds.
Ripple emerged first in 2012. The project is a product of Chris Larsen and Jed McCaleb alongside Brad Garlinghouse. Developers of Ripple intended to make the system support a crossborder payment instantly for free, almost. Its started as a payment protocol, to ease the transfer of money between borders. Traditionally, international money transfer is outdated, slow and costly. Ripple wants to change this model.
They are trying to change this by using xRapid – which already have a lot of banks that are using it – and probably soon Binance will use it too. To have a better understanding about xRapid, you may check the xRapid explained article. Same for xCurrent or xVia. Ripple digital asset grow in 2017 to as much as $3 and had a market capitalization of $130 billion at its all time high price. It wasn’t the largest cryptocurrency at the time and its not now, but its however widely used as a payments solution for transferring money using blockchain technology.
Ripples XRP is the cryptocurrency that the ripple protocol uses. The Ripple protocol was build to send money abroad and have Ripples XRP as the cryptocurrency for it. However, banks can use it to send money from one to another one in just a few seconds and for a fee of less than 1/10th of a cent. Ripple labs are working hard to establish more partnerships and have more banks join their network. If we take a closer look at the XRP price analysis , we can see that XRP decreased to $0.20 lately – after it had a value of $0.46 in 2019. Ripple XRP price decreased a lot mostly due to Bitcoin fluctuations and cryptocurrency trading.
Understanding Stellar (XLM)
Stellar emerged a few years later after Ripple with Jed McCaleb being one of the project co-founders. Jed McCaleb worked with Brad Garlinghouse at Ripple Labs also.
Stellar also deploys the use of blockchain to process payments. It is important to note that the code bases for Ripple and Stellar are all similar. Stellar’s entire project goal strikes some similarities to Ripple. It seeks to enable the ability of an instant international payment . Stellar Network add its transactions to a shared, distributed ledger that its available for anyone to check. The Stellars XLM is powered by the Stellar Development Foundation – who are working on improving the Stellar consensus protocol. Stellar wants to solve the international transfers issue by created a crossborder payment system focused on people, not banks – unlike Ripple’s XRP. The Stellar Lumens XLM is the cryptocurrency that its used on the stellar lumens blockchain.
Stellar stands out a bit because its primary focus is on individuals unlike Ripple’s target for institutions like banks. Stellar network is a bit more flexible than current payment options – such as PayPal. The fee of using Stellar’s service is low too – a merely 0.00001 XLM per transaction.
The developers came up with Stellar Lumens or XLM as the native cryptocurrency. Stellar also had the biggest cryptocurrency airdrop to date – with $125 Million USD distributed among the people that verified their identity on blockchain.com. Stellar’s price analysis doesn’t look too good either, as Stellars XLM lost over half of its value in 2019. However, the stellar network is still one of the most used ones and stellar lumens XLM is still in top 15 based on its market capitalization. The price forecasts for Stellars XLM are not so favorable lately, but with the right catalyst – Stellar lumens can be one of the solutions for a perfect crossborder payment solution.
XRP vs XLM – Similarities Between Ripple and Stellar
When it comes to Stellar vs Ripple, we have had some fundamental similarities to point out. It is not a surprise that they strike some similarities considering that their code base is the same. Additionally, the two projects were co-founded by Jed McCaleb.
It is important to note that Ripple and Stellar do not depend on miners. Lack of miners means that both projects stand out compared to other PoW cryptocurrencies. Furthermore, the blockchain used by Ripple and Stellar claims to be decentralized. The truth is, the cryptocurrency enthusiasts have solid points when they claim that both of them are more centralized than decetralized.
However, both don’t permit running of nodes by the public. Developers of the project kept the nodes private and operate their nodes on many servers. When it comes to authentication of payments, the two projects use a distributed ledger technology. They have a reputation for instant payments at a lower cost.
Ripple and Stellar have prioritized keeping the value of the coins low. Maintaining the value will enable both projects to have affordable services with the aim of supporting cheap cross border payments.
Both XRP or XLM are listed on more than 10 top crypto exchange. The cryptocurrencies are used for cryptocurrency trading as well as their main purpose – creating a reliable crossborder payment system based on a distributed ledger technology. XRP or XLM can be stored on hardware wallets, such as Ledger nano or a Trezor. So if you’re looking to hodl any of these two, its really easy if you own a Trezor or Ledger Nano.
XRP Token vs Stellar XLM – Key Differences between Stellar Lumens and Ripple
At a glance, Ripple and Stellar vary from each other based on their philosophies. Ripple labs focused on making the project the solution to instantly and cheaply conduct a crossborder payment one bank to another. The XRP distributed ledger technology is not public, as they work mostly with banks. The system has the XRP token as the fuel for these transfers.
On the other hand, Stellar focus on individuals. The project targets people in developing countries who lack access to financial services. According to Stellar’s developer Jed McCaleb, he was motivated by his passion for helping people. A key difference between Ripple and Stellar is the fact that the Stellar code is open-source and can be found on Github.
Unlike Ripple, which is built mostly for banks. The two projects also differ on nodes consensus. A conses model is a system that is used to validate payments without the use of any intermediaries. For Stellar, it deployed a protocol dubbed Stellar Consensus Protocol. On the other hand, Ripple implements the Proof of Corrections protocol to validate payments. All these protocols are different from the popular PoW and PoS models popular among other crypto projects.
XRP or XLM – Which is the best project?
Before determining the better holding in the Stellar vs Ripple debate, we have some factors to consider. After Bitcoin and Ethereum, Ripples XRP is the third most valuable token based on its market capitalization. Because Ripple joined the market two years after Stellar, the latter has managed to ink key partnerships with more than 100 banks.
Such collaborations plays a crucial role in enhancing the trust in Ripple while at the same time improving the project’s market liquidity. Generally, Ripple stands out due to its notable success. The platform has proven a point while attempting g to revolutionize the cross border payments system.
Stellar looks like an underdog when compared to Ripple due to its plan to enable affordable financial services across the globe. It is evident that Stellar still lags behind Ripple in terms of success, but it has managed to maintain its position in the market.
The Stellars XLM is ranked 11th, but its among the cryptocurrencies with a good use case and usage around the globe. We also have a possibility that Stellar will attract more customers in the coming days as it sets base in developing countries. This model makes it easier for people to transact globally using XRP. So, XRP or XLM? Who would win in the XRP vs Stellar battle?
If we look at the market capitalization, the XRP token is way far ahead. However, its latest technical analysis and price prediction doesn’t show any sign of recovery too soon. But the project is still solid and has a valid use case for the future. Stellar and Ripple have their similarities and differences. Both want to solve the money transfer issue – but each for a separate client. Stellar’s focusing more on individuals while Ripple was created for banks. Now, its all about understanding ripple and understanding stellar to know which one to pick – XRP or XLM. Both of them can be easily swapped to fiat currency so the liquidity is not really a problem for neither.
XRP vs XLM Conclusion
It is important to note that both Ripple and Stellar are on course to be among top global projects. Despite being a product of one individual, Ripple and Stellar have different ideologies with a concentration on a diverse customer base. For the Ripple vs Stellar debate, it is only noble to note that each project comes with its strength and weaknesses. Before settling on any token, conduct research and decide on a project that will give you value for your money. We believe that both project have a crucial role in the cryptocurrency field development and both would probably succeed. Which one will have a higher price in the future? That will depends on the business decisions each company will take, adoption and the user base of the companies. If you think about buying XLM or XRP – keep in mind that there’s a big risk as the market is extremely volatile these days.Image Source : Medium