Stellar VS Ripple: Which Crypto Payment Network is Better?

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In this article, we will be taking a look at two of the biggest players looking to gain control of the payments space; Stellar vs Ripple.

As of 2019, the crypto world has spawned a few ventures that are backed by serious capital and tech people. In that order of ideas, ventures that focus on a specific niche that needs to be served rather than all-purpose cryptocurrencies (such as the ol’ Bitcoin) are gaining traction and momentum.

stellar vs ripple

It’s worth mentioning that some of the new ventures in the crypto world incorporate more than just crypto/blockchain technology. Simply put, they develop and offer a service, often financial, but take advantage of blockchain technology or other crypto technologies, many times just for the hype rather than a real justification to use the technology.

But returning the subject. Stellar vs Ripple, right, first we should dig a little more into both and see what makes them similar and not-so-similar.

  • Stellar is an open-source protocol that features a conversion of digital assets to fiat money allowing worldwide transfers and remittances in a multi-currency setting. The protocol is maintained by the non-profit Stellar Development Foundation. The Stellar network uses a cryptocurrency called Lumens (XLM) to handle transactions within the network. See here for a list of the best wallets to store your XLM. it’s Stellar’s commercial arm and is currently seeking adoption and implementation of the Stellar technology commercially. It’s worth mentioning that Jed McCaleb co-founder of Ripple is also the founder of the Stellar venture.

  • Ripple works as a real-time live gross settlement platform that also provides currency exchange and remittance services owned and created by Ripple Labs, a US company. Ripple aims to “secure, instantly and nearly free global financial transactions of any size with no chargebacks.”

XRP is Ripple’s native cryptocurrency and it’s among the top 5 coins by market capitalization. Moreover, it’s seen increased adoption by financial institutions and intends to increase the adoption in the foreseeable future.

Stellar vs Ripple: Which is better?

Both systems have their cryptocurrencies that are held by their seed investors, private investors and general users. Also, they are openly traded by cryptocurrency exchanges and are used as a means to store value or for speculative investment. So, XLM vs XRP in terms of token value and exchangeability are pretty similar considering that both their value floats and fluctuates according to market conditions.

A quick glimpse to a XRP vs XLM price chart…




Both XLM and XRP suffer from the same fluctuations that all main crypto markets do, it’s true that at times they can perform better than the crypto behemoth, Bitcoin, but they still are entangled and behave as other major crypto markets. So the Stellar Vs Ripple feud cannot be decided just by looking at market/price charts.

XLM, Stellar’s cryptocurrency share similarities in technology and operation with XRP. This is an expected outcome since they share a founder and aim at providing an easier and cheaper alternative to moving money cross-border. But alas, the difference lies in their target, Ripple is aimed at banks and financial institutions whereas Stellar, even though can still be used by banks, focuses on average people and the unbanked.

So Should I invest in XRP or XLM?

It all boils down to personal preference, what vision aligns better with yours? However, there is a good question that comes out of both projects. Can both ventures coexist? Or does one have to drive out of business the other? 

Both cryptocurrencies share so many similarities that one is led to believe that only one is needed. Nevertheless, the most discernible difference is their target audience, XRP is there to appeal to banks and financial institutions whereas XLM focuses on helping the unbanked and those needing better access.

Financially, XRP has increased its business reception and its market is where the money is, XLM depends on more user traction to gain sustainability. Additionally, XRP is a deflationary cryptocurrency while XLM goes the inflationary road. XRP has gained more funding, but that is to be expected since they are targeting banks and capital holders.

In the technological part of the Stellar Vs Ripple discussion, we begin by noticing that their algorithms are different. XRP uses proof of correctness and a unique consensus for XLM. Ripple’s XRP is more centralized than Stellar’s XLM, but they both are by standard, decentralized. It’s worth noting that both aim at keeping lower fees and quick transactions.

The Future of Stellar Lumens (XLM) 

It’s been successful so far, XLM has been adopted by major exchanges and it agrees with the primal concept of cryptocurrencies. The concept states that cryptocurrencies are meant to provide access to financial services for the unbanked or underbanked, XLM is more decentralized than XRP as well, another point in favor of riding the trend.

There is no reason to believe that both ventures can’t coexist. Ripple has more high-profile partners which include big banks and financial institutions, Bank of America is one of them. On the other hand, Stellar partnerships are mostly focused on their technology rather than as a service (Remember it started as a non-profit venture). As a result, partnerships with IBM and Deloitte are among the most notable and show Stellar’s steady path to success.

Then, does that mean that Stellar Lumens will survive? If we look at a Stellar price chart, like the one mentioned before, we can see their market volume and evolution are similar to other big cryptocurrencies. Consequently, we can assume that Stellar is in it for the long haul, but cryptocurrencies are volatile and still a very young technology and market.


Stellar vs Ripple: Conclusion

Stellar Lumens (XLM) and Ripple (XRP) share a lot of similarities but diverge in their target audience. Ripple is linked with high-profile partners whereas Stellar sounds more like non-profit technology aiming to reach the individuals and underbanked.

Stellar Lumens doesn't use (PoW) Proof of Work nor (PoS) Proof of Stake to operate and secure its blockchain. It relies on a Byzantine agreement system. The system’s inflationary currency has a fixed increase rate of 1% per year.

The Ripple Protocol consensus algorithm (RPCA), is run every few seconds in every node. This is done so that correctness and order are maintained in the network. When consensus is achieved, that ledger is considered “closed” and it’s considered the latest. Normally, the algorithm is successful and the next round starts. Otherwise, a fork would occur but that’s highly unlikely.

As with every cryptocurrency in circulation, it’s hard to make accurate Stellar predictions. The growth of the cryptocurrency market seems inevitable, Stellar has a few features that make it a good candidate for long-term investment.

  • Jed McCaleb, one of Ripple's founders along with an excellent team.
  • A proven working product.
  • Good partnerships and integrations such as Wirex, Stripe, Microsoft, IBM.

The current price seems a little undervalued compared to Bitcoin, it might be a good time to consider entering the market.

Ripple shares these advantages with Stellar but it’s worth mentioning that there is a lot more capital investment in Ripple due to its high-profile partnerships and target audience. Ripple was all over the news in 2018 due to its partnerships with big names and it caused spikes in the price of XRP. 

Which one, then? It’s hard to know, and sadly, our crystal ball is not giving us a clear image. But, considering all we analyzed before it’s not crazy to say that both assets are pretty good looking for a possible investment.

The Stellar Vs Ripple battle seems to have ended in a technical tie, they can both coexist since they have different targets. Yes, they have similarities but that both are based on a successful model and are not necessarily a bad thing. Both are promising, sustainable and have solid founding.

As always, invest only what you can afford to lose and make your due diligence.

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