One Year Later: How Is Stellar Stacking Up Against Ripple?

We are now nearing 1 year after the frothiest crypto markets the world had ever seen, and one debate which was top-of-mind back then still rages on: Stellar or Ripple?

As blockchain entered the mainstream, we were told how the technology had the potential to revolutionize nearly every industry. And if a company could find a way to turn itself into a day-to-day use, then it had the potential to be worth billions. The legacy market of finance and the financial infrastructure is strong, but many of us intuitively know there are huge inefficiencies there. These two companies sought to target the basic (but currently complicated) use of transferring money between individuals within a country or even across a border.

The Basic Differences

What turns this subtle match-up into more of a cage match is the fact that Stellar was spawned from Jed McCaleb leaving Ripple (after being an integral part of starting it) to create Stellar.

Both cryptocurrencies are viewed more as companies using a cryptocurrency to create utility rather than simple non-profit platforms. To put it a different way, they are seeking to carve out a piece of the banks’ pie, and have already tasted blood.

The currencies technically fill two different needs, even if they are in the same space. Ripple wants their token, XRP, to become a base currency for Binance, but also a bank solution for transferring money in the most efficient way possible. Stellar, on the other hand, is building a platform that enables consumers to transport money cross-border, with over 70 countries already a part of their network.

Comparing the Two Protocols

One of the top indicators of the success of a coin is whether it is listed on Coinbase. They are the blue chip leaders of the space, and it is a strong signal for any cryptocurrency that can get that sort of approval. There were rumours of XLM being considered for listing in July, and in the last month XRP has also received more positive interest, but neither have hit this major milestone yet.

It is difficult to sort out the propaganda from the facts in this debate. You will constantly hear naysayers calling XRP a security and discussing the unethical distribution of coins, but you’ll also hear claims that XRP is twice as good as Bitcoin and has solved all of the scalability issues inherent in the original protocol.

Investment Choices

Assessing the two protocols in the current moment, both have a lot going for them and have traded almost inversely with the rest of the crypto market. Between the two of them, Stellar seems to be showing the most upside potential right now. With Ripple ranked as #2 in terms of market capitalization and Stellar as #5, there is still a significant gap.

The chart of Stellar’s performance over the last year show below is relatively similar to that of Ripple.

However, Stellar is hitting higher lows and shows potential to break through resistance in the near future. Additionally, they have a recently announced partnership with IBM that adds a ton to their fundamentals.

If you were choosing between the two of them, Stellar is likely the better short-term bet. Over the long-term, they both have a ton of room to grow in their own respective niches, but will eventually come up head-to-head over market share. At that point, it could get messy.

Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.

Featured image courtesy of Shutterstock.