While many crypto assets can be seen as competitors, very few get put up against one another as much as XRP and XLM do. These two coins are often seen as competitors by many investors, and many believe it is simply impossible for both to succeed in the long run.
This article will take a closer look at that ideology and see whether these two assets will be able to co-exist or if one will ultimately be the winner. In addition to that, we will look at some similarities and differences between the two coins as well as give a brief introduction to each coin.
XRP was released all the way back in 2012 and their goal is to enable instant, free and secure transactions throughout the world. Stellar, on the other hand, released in 2014, is an open-source protocol for value exchange. XRP has a market capitalization of around $17.7 billion with the XRP to USD price of $0.44, while the market capitalization for Stellar Lumens is around $5.6 billion and one XLM unit is valued at $0.29 (as of 30 July 2018).
Now that you know a little about each coin, let’s look closer at their similarities, differences and whether they can co-exist.
When you first look at these two coins and how they work, they seem quite similar. However, we will dive deeper into why this isn’t the case in the future. While they both help make transactions easier and faster, they have different goals and market.
In addition, to both working with making transactions and payments easier, there are more similarities worth mentioning as well. They both have a total coin supply of around 100 billion and each has a transaction clearance of between 2 and 4 seconds.
However, when you become more experienced in crypto and understand the technicalities, you will learn that there are actually more differences between the two assets than there are similarities.
One of the main differences is that they are going after different target markets. For Ripple, they are trying to get banks and other large corporations to use them when making large, international payments.
On the other hand, Stellar lets individuals transfer money to one another. So while they both essentially help facilitate mainly international payments, they do it in incredibly different ways.
Another difference is that the teams behind each coin have a very different makeup. Behind Ripple, you have those with a lot of investment banking background, as well as those who have worked as executives at large companies.
On the other hand, the team at Stellar is made up of entrepreneurs who have experience in launching and/or working at startups. This type of team makeup makes sense as Ripple is going after large banks and companies, and Stellar is going after individuals.
There is also a multitude of technical differences between the two coins as well. XLM has a 1% inflation each year, whereas XRP is actually deflationary, which means the total amount of coins is decreasing. Another huge technical difference is that XRP is largely centralized while XLM is not.
There is also a very large philosophical difference between the two coins. Stellar is a non-profit that seeks to provide an increase in financial inclusion and looks to serve the millions of unbanked or underbanked individuals. Ripple, however, is for-profit and wants to work alongside huge companies to connect large corporations and financial institutions from all over the world using their network.
Can They Co-exist?
While it is impossible to tell the future and predict what will occur, we do believe that both of these coins will be able to co-exist successfully. The biggest reason for this is that they have different goals and target markets.
While they work in a similar fashion (XLM was actually based off of XRP at the beginning before they adopted their own system), that is about where the similarities end.
As a result, there should be no competition as each should be able to work directly with their target market and not worry about what the other is doing. Of course, if either starts to branch out and infringe on the other’s market, that could change the story a little bit.
But if they each stay in their respective lanes, there is no reason that two international payment facilitators can’t work alongside each other.
Another reason why we believe they can co-exist is the large discrepancy in pricing and market cap for each coin. They are not neck and neck regarding those metrics, so there isn’t some sort of struggle to be the best and most popular option. They are both appreciated by their markets, and that is good enough for them, at least for the time being.
Many holders of one coin will look at the other and feel as if they are affecting their growth. For example, if someone holds XLM, they might believe that XRP poses a large threat when it comes to growth, despite the fact that there are different goals and markets involved.
As for which one you should support and invest in, that is ultimately up to you. XRP is currently more well-known, established and popular, but XLM has been exploding onto the scene more and more in the recent months and is showing impressive growth, even in a time when many coins are struggling.
It is up to you and your own independent research to decide which is the coin you want to invest in and utilize.
If you are into cryptocurrencies, and I bet you are if you read this article I invite you to TopGold Forum Cryptocurrency section to discuss the latest price updates and developments of Stellar and Ripple.