It’s safe to say that the crypto world has never seen a lack of interesting projects, some of who can seem very alike. If you’ve been involved in the cryptosphere (or at least passionate about cryptos in general) for a bit, then you probably know about some various projects that seem very similar such as Ethereum and NEO.
However, there are two projects that have started to capture more and more attention in the cryptosphere, across mainstream media, and especially of future-minded investors. These are Ripple and Stellar- two projects with a somewhat similar identity, similar technologies, but with different philosophies, purposes and technologies behind them.
Bellow, we will discuss their similarities, their differences, as well as which one is the better holding and why.
What is Ripple?
Ripple is the older project of the two, as it was created in 2012 by American programmers Chris Larsen and Jed McCaleb. The platform was designed to allow banks to transfer money internationally in a matter of seconds without any associated costs. In short, the project’s main goal is to revolutionize the international cross-border payment systems which tend to be outdated, slow, and expensive.
XRP is the native cryptocurrency of the project, a project that uses distributed ledger technology to allow banks to bypass third parties and trade bank-to-bank.
What is Stellar?
Stellar was created two years after Ripple, by one of its co-founders, Jed McCaleb. Just like Ripple, Stellar also uses distributed ledger technology to process transactions. In fact, their code bases are very much similar. Stellar’s goal is pretty much the same – that of allowing funds to be sent and received quickly and cheaply. However, the project is focused on the needs of individuals, and not those of financial institutions such as banks.
Stellar Lumens or XLM is the native cryptocurrency that powers the platform. It’s a crypto token that is mainly intended for the developing world, even though it can be used by banks.
As mentioned before, the two projects are fairly similar, not really surprising considering the fact that they share the same founder (Jed McCaleb). For starters, the code of blockchains is almost identical. Both Stellar and Ripple do not rely on miners, which sets them both apart from most of the PoW crypto projects out there.
It’s worth mentioning that both blockchains are indeed decentralized, but that they do not allow the public to run nodes. Nodes are private as the developers behind both projects run their own nodes across multiple servers. Both projects make use of the distributed ledger technology to verify the authenticity of funds, and both projects are known for fast transactions and very low fees.
Keeping the value of their coin low is a priority for both Ripple and Stellar, as they aim for their services to be inexpensive in order to be viable global payment systems. Last but not least, both projects have their coin supply controlled by the developers (unlike Bitcoin, where new coins are released by the network until the maximum supply is reached).
One of the main difference between the two projects has to do with their different philosophies. While Ripple was created to revolutionize how banks allow cross-border payments, Stellar has been specifically designed for helping the unbanked, people in poorer or developing countries who do not have access to everyday financial services. Stellar was created from McCaleb’s passion for helping people.
Another big difference between the two platforms is the way the nodes reach consensus. For those who don’t know, a consensus model is a technology responsible for confirming and validating transactions without the need for third-party intervention. Stellar uses a consensus protocol called “Stellar Consensus Protocol,” while Ripple uses a “Proof-of-Correctness” protocol, both of which are different from the popular PoW or PoS protocols.
Which is the better holding?
There are a lot of key factors worth taking into account if one is to establish which one is better, Stellar, or Ripple. For starters, it’s worth noting that Ripple’s XRP token is currently the second most valuable token behind Bitcoin, putting Ethereum way behind. As expected from a project with two years ahead of Stellar, Ripple has multiple noteworthy partnerships with over 100 different banks. This not only increases the trust in Ripple, but it also improved Ripple market liquidity. Ripple seems to be a success story, as it made its mark by trying to revolutionize the international payments sector.
In this context, Stellar seems to be the underdog, especially when considering its plan to deliver low-cost financial services to the world. Even though it doesn’t enjoy the same level of backing as Ripple, Stellar has held up pretty well, and its token is now ranked 6th on CoinMarketCap, an exceptional achievement. On the other hand, there is the possibility that Stellar will get more users in the future as it anchors itself in the developing countries, making it easier for people to perform international payments cheaply than with XRP.
Ripple vs Stellar Conclusion
At the end of the day, it’s worth acknowledging the fact that both Stellar and Ripple are two of the world’s most valuable projects. Two projects started by the same man, with similar inner workings, but very different philosophies and a focus on very different target markets.
Trying to frame an argument between the two feels like missing the point. Each project has its own strengths and weaknesses, so make sure to thoroughly research both before deciding which is the better pick for your time, energy, and money.