Currently, the crypto market is much more diverse than several years ago, as investors have opportunities besides Bitcoin and Ethereum. As it turns out, the two cryptos that have been under the scope of many traders are Stellar’s XLM and Ripple’s XRP.
The coins are somewhat similar, as they hit the peaks of investor interest around the same times — in January 2018 and May 2021. Also, both Ripple and Stellar have had similar goals and aimed to solve similar problems. However, Ripple changed its target users later down the road.
Like many other cryptocurrencies, XRP and XLM are highly volatile. So check their current prices before you proceed with any transaction.
Price isn’t everything, though. In this article, we’ll make a detailed overview of both cryptos and help you decide which one is the best option for investment.
Explaining Ripple (XRP)
XRP is intended to make payments, particularly cross-border ones — affordable and fast. It can be regarded as an alternative to SWIFT, i.e., international wires and similar methods that are usually considered slow. However, Ripple utilizes decentralized technologies to make the process faster.
The Ripple platform supports the throughput of 1,500 transactions per second (TPS). Users can also enjoy platform fees of 0.00001 XRP. Ripple has a strong partnership with over 100 large enterprises such as MoneyGram, Zip Remit,
BeeTech, and American Express. Cooperation with organizations of such caliber is proof of the project’s reliability.
The coin has been around for quite a while. It has been actively traded since 2013, and its price peaked on January 4, 2018, when a single unit’s cost was $3.84. The total supply of XRP equals 100 billion, and almost 50% of them are already in circulation.
Explaining Stellar (XLM)
Stellar was created in 2014 to boost financial inclusion, which is considered similar to Ripple’s initial goal. The target users of the coin were the unbanked. In other words, XLM was aimed to help those who didn’t have or couldn’t open a bank account for some reason.
The Stellar network is capable of 1,000 TPS. Besides fiat currencies, the platform supports the use of digital money. Its native token is Lumen or XLM. The support of multi-signatures and smart contracts is what makes the platform highly secure.
The coin price reached the all-time high of $0.938 on January 4, 2018, which happens to be the same day XRP hit the ceiling.
Do They Have Something in Common?
XLM and XRP can be compared to Microsoft and Apple in the world of cryptocurrencies. They
started as direct competitors, but that changed with time.
Here are some of the things that both cryptocurrencies have in common:
● Both are based on distributed ledger technology.
● Both feature a fast transaction time of 3-5 seconds. Ripple can process around 1,500 transactions per second (TPS), whereas Stellar can process around 1,000 (hoping to increase the number to 5,000 in 2022).
● Both offer comparatively affordable transaction fees.
Differences Between XLM vs XRP
The two coins don’t differ too much. However, Ripple is a larger organization than Stellar. Unlike Stellar, Ripple is relatively centralized, and the team behind RippleNet has a straightforward strategy of partnering with financial institutions around the globe.
Ripple is a profit-making organization, whereas Stellar’s policy is altruistic. The initial target market was similar when the two cryptocurrencies were launched. Stellar’s business goal is to optimize cross-border transactions for individuals worldwide. Ripple’s main targets are financial companies.
Ripple has been more consistent with its rankings, and right now stands at 6th place by market cap. Stellar was also in the top 10 list at some point, but it suffered some losses and now takes 31st place. As the popularity of XRP grows, so will its value. If XRP reaches its max supply, it has the potential to double its market cap, which will put the coin in the 4th spot of capitalization rankings.
Which One Is a Better Pick for Investment?
The coins share a lot of similar characteristics, like low fees and fast transaction speed. The main difference is that Ripple has been more consistent with its capitalization value and partnerships.
Stellar XLM and Ripple XRP are great picks for trading and short-term investments. However, if a long-term investment is something you strive for, then XRP would be your go-to option.
