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Stellar vs. Ripple | What to Choose Between the Two? | Notum

By Notum

Jan 25, 20239 min read



Stellar and Ripple are two popular cryptocurrencies on the market. Both have their own unique features, but they also share some similarities. In this article, we'll compare Stellar and Ripple to help you decide which one is right for your needs. We'll look at each cryptocurrency's history, technology, use cases, and pros and cons. Which option could be the best in your unique case? Let's crack that distinction and understand how both work and maybe make a wise choice or even fall in love with two options.

What Is Stellar?

Stellar is a decentralized, open-source protocol for digital asset transfers. The protocol was created in 2014 by Jed McCaleb, who was also one of the co-founders of the now defunct Mt. Gox exchange and the Ripple cryptocurrency. Stellar is powered by its native currency named Lumens (XLM). Unlike other cryptocurrencies, which use blockchain technology to record transactions, Stellar is based on the Stellar Consensus Protocol (SCP). This protocol is a consensus system that allows its users to achieve agreement in a decentralized and trustless network.

Stellar provides a fast and secure platform for digital asset transfers. Transactions are processed in as little as 5 seconds, compared to traditional payment methods that can take up to several days. Similarly, compared to Bitcoin whose transaction fees are notoriously high, Stellar's transaction fees are much lower and depend on the network load at any given time.

Stellar can also be used for issuing tokens, which is a very attractive feature for businesses looking to raise funds through Initial Coin Offerings (ICOs). It's also possible to issue tokenized assets, such as gold or real estate, through Stellar. Furthermore, Stellar has a protocol that facilitates decentralized exchanges between the different tokens issued on its network.

What Is Ripple?

Ripple (XRP) is a digital currency and payment platform that has changed the way we think about global remittances and cross-border payments. Ripple uses its own distributed ledger technology – called the XRP Ledger – to provide fast, low-cost and secure transfers from one party to another. The Ripple network is open source, meaning anyone can join and take advantage of its benefits.

Ripple has two different tokens available, XRP and Ripple. XRP is a digital token that acts as a bridge currency between any two currencies in the Ripple network. This allows users to instantly move money between different fiat currencies without having to go through intermediaries like banks or money transfer services. Ripple, on the other hand, is a platform token that provides incentives for users to participate in the network and use its services. You can also use XRP as a form of payment within the Ripple network itself.

Ripple also offers various tools and services designed to make global payments easier and faster than ever before. Some of these tools include RippleNet, a global payments network that allows customers to send and receive money anywhere in the world; xRapid, a liquidity solution that uses XRP to make fast cross-border payments; and xCurrent, a secure messaging platform for banks.

Ripple has gained traction among many of the world’s biggest banking institutions, who have adopted Ripple’s technology in an effort to reduce costs and speed up the process of making international payments. As a result, Ripple has become one of the leading players in the cryptocurrency market and is seen as an important part of the future of finance.

Stellar Vs. Ripple 

Round 1: Differences 

  • Accessibility
    Stellar is an open-source platform, so anyone can access the system. As for Ripple, it requires people to receive permission to use it, and it ends up with only banks, and other financial groups can use the blockchain.
  • Inflation and Deflation
    XRP is a deflationary currency. What does that mean? The purchasing power of the currency will likely go up. This is because XRP’s transaction fees are burned or permanently removed from circulation. Stellar has an annual inflation rate of 1%, that is fixed.
    Inflation helps ensure people who can access XLM can continue to receive a decent value for the currency as inflation progresses worldwide.
  • Distribution
    More than 90% of XLM was distributed to the public upon release. The currency’s founders own about half of the XRP tokens. Their main focus is to regulate the XLM system and ensure its continued functionality. 


Round 2: Similarities 

  • Limits
    Both XRP and XLM have limits on how many coins are available. Mining is not available for both cryptocurrencies, as all coins are already minted. XRP's maximum supply is 100 billion coins and XLM — 50 billion. 
  • Fees
    Ripple and Stellar charge little to 0 fees. The minimal transaction fees point to each cryptocurrency’s intended purpose: to help people transfer fiat currencies securely, with minimal cost. Transaction costs are lower than equivalent fiat currencies.
  • Transaction
    The transaction time for XRP and XLM is relatively minimal. It takes about 5 to 10 seconds to make a transaction.

Here’s a table that compares both platforms to your convenience:



Permissioned and centralized payment network

Permissionless/open blockchain platform

XRP as its own cryptocurrency

Uses lumen as its cryptocurrency for trading

On the market since 2012

On the market since 2014

Uses Ripple Consensus Algorithm for agreement among their nodes

Stellar uses Federated Byzantine Agreement for consensus

Profit-making organization

Non-profit making organization

Ripple has fixed supply of 100 billion XRP

Stellar has inflation of 1 %

Centralized in nature so it is prone to censorship

Decentralized so it is free from censorship

Among their partners are Kotak, Axis Bank etc.

Stellar’s partners are AnchorUSD, Smrtlands, Wrex etc. 

Wrap Up

Ripple is generally more suitable for financial institutions due to its centralized nature and faster transaction times. Stellar's open-source codebase makes it seems to be a better choice for developers who want to create decentralized applications. 

So, do you know what you are waiting for from a perfect platform? Try each one on your demands and expectations, then DYOR and make a beneficial decision. Both networks offer unique perks and can be used to process sufficient, secure, and low-cost transactions. 

With the increasing popularity of digital currencies, it is likely that both Stellar and Ripple will continue to expand in the future. Whichever network is chosen for a particular application, users can rest assured that the technology behind the transaction will be reliable and trustworthy.