Ripple vs. Stellar: what to choose?
Everyone who is taken interest in crypto markets heard about these two projects. The main question is which company would be better to choose for investing? Some people say that these two blockchains are the same. Thus, the question mentioned above is one of the main ones in the cryptocurrencies’ world. In this guide, we will try to make a comparison and everyone can decide for himself what to choose.
The companies can be compared with the Siamese twins. Since the project ideas originated from one person Jed McCaleb. But the target audience and purpose of each company are different. The first twin, born in 2012, was Ripple. Now the value of its own tokens is currently ranked as the third-largest market.
The second twin, born in 2014, was Stellar (XLM). Its father was the very person who established Ripple Company.
XLM represents the mechanism of transacting assets quickly and with the least expenses. In financial transactions, the company applies a distributed blockchain. The protocol’s code resembles the Ripple’s one. It is worth noting that some specialists consider Stellar as Ripple’s fork. But it is not quite true. The fork is a blockchain that was organized based on the blockchain’s code used before.
The Stellar’s technology is available absolutely for all the banks. The main idea concluded that Stellar was aimed at the developing countries’ market. People and companies from third world countries can make payments abroad. All the transactions were with the least commissions. The transaction is made in the shortest periods.
The analogy characteristics of the projects are as follows:
- First of all – the same establisher;
- Only private nodes are used, no mining in both systems;
- The distributed ledger mechanism as a matter of priority;
- The projects are in their way to make payments free and quick;
- Ideal for international payments;
- R&D engineers try to control the number of issuing coins.
Both companies use similar methods in their work. Besides, it is worth noting the essential differences between these two systems. First and the very important fact is that its co-founder left Ripple for Stellar. He is eager to help emergent nations. People in need do not get any financial facilities. He demonstrated his thoughts several times. He just making free XLM donations to all these people. Therefore, XLM Company is represented as a non-commercial organization. And this point first of all differs from the Ripple. Although these two blockchains are targeting at huge payments sector abroad. Mechanisms of their work are devised for banks and financial companies. The Ripple's team believes that banks begin to use this techno. To solve currency problems, banks will buy their currency.
The nods reach an agreement in different ways in both systems. An agreement model is a kind of mechanism. It confirms and verifies all the payments without any intermediaries.
Both cryptocurrencies use their scheme and protocol.
There is a similar system of coins issuing – so-called “at-will” of the team. Besides, it is worth to mention a slight difference here. Annually Stellar takes into account 1% inflation. This mechanism was borrowed from the traditional currency system. When the US Federal Reserve begins to issue more dollars, the inflation process starts. If the currency goes through inflation, it causes the impact of the value. The amount of circulating currency is increasing.
In reference to the XRP coins, they are deflationary. Ripple decided to burn the transaction fees. It means the circulation will decrease sooner or later.
It is commonly thought that Ripple is more decentralized. This company froze XRP coins when McCaleb established Stellar. That was a one-off incident. But it shows the great Ripple’s control over its cryptocurrency. For this very reason, people prefer Stellar instead of Ripple.
The current situation on the market
XLM nowadays is a cryptocurrency that can be sold for billion of dollars. It was managed to achieve a $13 billion capitalization in 2017. The most outstanding triumph was its cooperation with IBM Company. In case of their successful cooperation would be possible to broaden it to the other regions. This will be a great success for all the team.
Ripple had an opportunity to make a much more great partnership. The reason for the earlier establishment. They have already tested their technologies with more than 100 diverse popular banks.
XRP’s using in banks' international transactions is directly influences its value. This criterion is quite important. For today Ripple technology doesn’t require XRP for its functioning. The coin can prove its usefulness only in case banks need it for liquidity. To exchange another currency for their own, the bank must open a notary account. The main problem is that banks must keep money in every notary account. These crypto coins in their way to solve this issue. As a result, banks definitely will use it.
We studied both systems and made a comparison in detail. Despite the same technology, companies’ paths of development are quite different. So, the main question is – which of the company is better to choose?
If you familiarize yourself with the price charts of both coins you will notice a quite similar changer. Because of this, investors have the same faith in each project. So the final decision can’t be made yet. Although, take into account the similar behavior of other altcoins.
Ripple is not trusted by big financiers. So many people choose Stellar Lumens as an investment target. Ripple was the first and it is a popular company that is on everyone’s lips. But their competitors from Stellar have much more potential for growth.
Both cryptocurrencies have shown very good results in recent years. They were managed to conclude an important partnership.