This is a question we can find in a big variety of discussions regarding the Cryptocurrency World. This two Cryptocurrencies with such similar technologies can confuse a big number of people. Which one is the best to keep your money on? Which one is the treasure for the investors that will shoot to the moon in the near future? From both teams which one is developing the best project?
The similarities
As said above, these Cryptocurrencies were created with a very similar technology since they share the same purpose – the possibility of transferring funds in the cheapest and fastest way possible.
Many had also insinuated that XLM was a fork of XRP when it was created. Although this is not correct as developers from Stellar came up to debunk the story as it was false.
Both projects share the same founders in common, Jed McCaleb was both co-founders of Ripple back in 2012 and later on the creator of Stellar Lumens in 2014.
Stellar, like Ripple, uses a distributed ledger protocol to process transactions, This technology is what removes the need for third parties when transferring money across borders, cuts their costs and reduces time.
Neither Ripple or Stellar are mined
Instead, the developers run their nodes through multiple servers. The nodes are also extended to the banks and financial institutions with which they have partnerships with (in order to spread the nodes as much as possible and make transactions smoother and faster).
The coin supply is controlled by the developers and has already been pre-mined as they were both not designed to be mined at all. This last similarity is the one that brings most people not to agree that these Cryptocurrencies are actually decentralized.
What makes them unique?
The actual biggest differences of this Cryptocurrencies are their goals and their audience target. Ripple was created to attract banks and big financial institutions. Which can easily be understood by seeing how many partnerships Ripple has with this kind of institutions. Bank of Canada, Barclays, Santander, the Federal Bank are some of the biggest names that have partnered up with Ripple in the last years. Together with more than 100 other financial institutions.
Stellar is the complete opposite, they always referred to be a ‘not for profit’ technology and their main objective is to Bank the Unbanked. They want to give the possibility to people who don’t have access or possibilities to use banks to be able to make transactions and keep their money safe anyway.
Well, some big companies have also partnered with Stellar, such as IBM, but we can understand this partnership was made with the intent to improve their technology and help the spread of their distributed ledger.
So, we can understand that Ripple focuses more on marketing and attracting big partners connected to the economic world in order to expand. That is why Ripple has raised much more capital than Stellar, their partners and audience proved to have more money to spend and invest in XRP.
Their market cap difference is also one big evidence to this – XRP Market Cap sits at $17 Billion while Stellar XLM’s at $2 Billion.
But, to cover on this, Stellar has the potential to allow transactions to be cheaper, much faster and to spread the transactions in a more wide variety of coins.
Concluding, both currencies are developing their projects in order to be here to stay. One targets big corporations and banks (Ripple), the other targets the ‘unbanked’.
Both have a great power of marketing and volume in their trades, which actually allows them to coexist without any rivalry, because of the target differences.
One would not say that there is one winner between them, the main view is depending on your vision of what a cryptocurrency should do in the market and on what their technology should be focused and targeted on and that should help you to decide in which to invest in.
On one hand, we are beginning to see Banks and big companies interested in understanding and taking advantage of the Blockchain and Cryptocurrency industry.
Although we also know that their privacy, advantage of being untraceable and the position of staying on hands reach of anyone in the globe shows us they will always be the best solution for the unbanked or for the people not believing or trusting in Big Financial Institutions.
That is why we can see both of these currencies having a long reign in the top 10 and will only improve themselves more and more in the future.
