Stellar (XLM) vs. Ripple (XRP): Which is the better project?

By July 24, 2018Ripple
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Recent news and developments have re-ignited the longstanding debate concerning two of the top ten crypto projects: Stellar (XLM) vs. Ripple (XRP).

A wave of events seems to be tilting the scales in favor of Lumens, seen by some solely in terms of the price increase for the coin.

Even as the popularity of Stellar among potential investors and holders soars, one question that is still worth asking is: Stellar or Ripple- which is a better project?

XLM currently trades at about $0.29 against the US dollar, having gained over 35 percent in the last 7 days. Ripple’s price remains below $0.50, struggling to get a continuous uptrend.

Stellar is definitely doing well in recent days, but does that make it better?

Jed McCaleb was recently named among the top 10 most influential people in cryptocurrency and blockchain.

It’s a great recognition for a man who is a co-founder of both Ripple and Stellar. The former was founded in 2011 and aimed at transforming the banking industry.

Stellar (XLM), on the other hand, was founded in 2014 after McCaleb had fallen out with members of the Ripple team.

He co-founded the Stellar Development Foundation, a nonprofit that runs the Stellar Consensus Protocol and its native currency XLM.

Both “cryptocurrencies” want to leverage blockchain technology to transform cross-border payments and remittances.

Cross-border payments and remittances- which is the better approach?

Stellar’s efforts are targeted towards individuals and institutions outside of the banking industry, using anchors.

Basically, it targets the unbanked who want a cheap and secure way to transfer money around the world.

It puts a strong emphasis on how to adapt its technology for the everyday use, mostly in developing regions of the world.

This approach makes it unlike Ripple, whose main focus is to work closely with banks and other financial institutions to make the transfer of money faster and less costly.

The target is to have XRP used by these institutions, essentially replacing traditional methods like SWIFT.

As such, the two may have cross-border payments and remittances as their main target, but they differ greatly in how they want to achieve it.

To this end, Stellar has partnered with IBM and is likely to be incorporated in most of the tech giant’s ventures.

XRP, on its part, is being tailored for adoption by major banks and payment providers. In fact, Ripple has aggressively been laying the groundwork by partnering high profile banks and remittance services.

Decentralized vs. centralized debate

Another point that often crops up in various social circles is that of a decentralized vs. centralized platform.

Many view Stellar as a more decentralized network which then makes it possible for it to work around the constraints of traditional banking.

On the flipside, Ripple is seen to be quite centralized and aims at working closely and more specifically with banks. It has been accused of being profit-based and has attracted a couple of class action suits this year.

What makes Stellar (XLM) hot?

Stellar has had a spectacular few days following the series great news.

First, it was news that Coinbase was considering adding it on its list of tradable assets. Coinbase presents a very lucrative prospect for XLM, as it has the capacity to see its price explode once that happens.

Although it’s not guaranteed, it seems possible that Coinbase will probably add XLM due to its popularity and low-price.

However, it may avoid adding the coin if its price rises disproportionally to underlying development.

The prospect of XLM becoming accessible to over 13 million users means its price could gain massively in coming months.

Another prospect for XLM is the IBM Project that involves Stronghold USD, which will utilize XLM.

Also attracting a lot of attention is the deal with Tempo Money Transfer that is going to expose Stellar to users in Europe and Latin America.

It could turn out to be bigger for XLM since Tempo Money has a stronghold in Europe, potentially making it the primary channel for EUR-USD transfers.

Stellar also acquired a Sharia-compliant certification that opens it up for use in the Islamic regions of the world.

The Stellar network can now be accessible to several countries in the Middle East and Southeast Asia.

The potential for massive growth for the XLM token is there should it capture the market that makes about one-third of the market for cross-border transactions.

For now, the Lumens is hot and could see its price skyrocket. If it tumbles due to missing out on Coinbase, it will be a different story altogether.

Why Ripple (XRP) could be better

Missing out on Coinbase and the prospect that it may be declared a security by the SEC makes XRP not so attractive to investors at the moment.

But there’s the feeling that getting listed or not on the top exchange no longer matters for the third largest coin.

Its focus on seeing XRP adoption via its blockchain solutions is as aggressive now as they were at the beginning of 2018.

Also, its price has plummeted from over $3.00 to below $0.50, more so after failed attempts to get listed on Coinbase.

But the company behind the coin has continually sought innovative ways aimed at increasing its adoption.

The Xpring initiative is likely to see the platform develop several other use cases that will all add up to the collective attractiveness of the ledger and its native token.

According to Ripple Labs execs, whatever happens to the company, XRP Ledger is here to stay and thus the native token also will. Assuming the adoption happens, XRP prices can only be expected to rise.

Who is better in the Stellar (XLM) vs. Ripple (XRP) debate?

There’s no way an agreement will be reached among the two communities as to which platform is better. Although many hold the view that Stellar has an advantage, especially after recent developments.

Stellar (XLM) is more of a decentralized project, that has been very successful so far with the best yet to come.

Ripple (XRP) seems to be constantly fighting negative media attention, which although is not necessarily bad, definitely doesn’t help their case.

Ripple may end up successfully penetrating the banking industry, and become the global cryptocurrency for international money transfer. But first, it has to navigate the regulatory murky waters as well as see off legal battles.

Stellar on the other hand could also carve a niche of the market for itself, connecting individuals and institutions thereby controlling a huge market.

It doesn’t have the challenges facing Ripple and thus may be a little bit attractive to investors and potential users.

The rest of 2018 will likely be a defining time for the two coins, especially with what happens on the regulatory front.

A wave of events seems to be tilting […]

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