Ripple has its cryptocurrency XRP, Stellar has its XLM. The latter forked off the prior by its co-founder Jed McCaleb. From there the story becomes a bit more complex. That has many people asking what the deal is with Stellar Lumens vs Ripple XRP?

Origin Story

In 2012 Ripple was founded with a goal of replacing the SWIFT system which is the underlying bank-to-bank payment system. In 2014, Jed McCaleb, who had a hand in founding Mt. Gox, eDonkey2000, and Ripple helped found Stellar. They are aimed at also transferring money but Stellar is a non-profit and aimed at individuals and companies.

Essentially, Ripple is working with financial institutions and Stellar is looking to work with emerging markets, and promote financial access around the globe. Ripple is a centralized system run by a for- profit company. Stellar is a non-profit corporation with an open-source protocol.

After Stellar made consensus code changes, it forked away from Ripple. Eventually, in April 2015, Stellar created a new consensus algorithm with all new code. The updated network for Stellar went live in November 2015.

Recent Stellar Lumens vs Ripple XRP History

In 2017, Ripple gained 36,000% in value and became, briefly, the number two cryptocurrency by market capitalization. That made 2018 look like it was going to be a tsunami of value building for Ripple. Meanwhile, Stellar was quietly amassing value itself and today it sits at number six in the market cap chart.

The Stellar Lumens vs. Ripple XRP debate is now heating up as the two companies seem to be working toward fixing the same problem in very different ways. Stellar partnered with IBM on a Hyperledger Fabric Project implementation. IBM is working to create a network of Lumen trading institutions to enable payments globally. This puts Stellar in a more direct competitive relationship with Ripple. However, Stellar is more focused on creating new markets. While Ripple does state that same objective in their mission statement, they do not seem as focused on it.

Centralized vs. Decentralized Financials

The major point that sums up Stellar Lumens vs Ripple XRP is that Stellar is more decentralized and could work around the traditional banking system. Ripple is made to be centralized and work specifically with banks. McCaleb left the Ripple team because he wanted a better product and his personal belief system differed from those at the company. That is most likely why Stellar is a non-profit and Ripple a for-profit corporation. Stellar is decentralized and Ripple is centralized. Stellar seems to want to enable individuals and companies in emerging markets. Ripple seems to want to profit by becoming fully integrated into the banking system. Ripple has a lot of former bank employees. Stellar is made up of entrepreneurs from the tech world.

Who Wins a Stellar Lumens vs Ripple XRP Showdown?

Many believe that Stellar has an advantage over Ripple if they were to go head-to-head. But there is no evidence to show that it will boil down to a this or that scenario. The two groups are aimed at different segments of a global market. Ripple could successfully be integrated into the global banking systems and not cut into Stellar’s market share. Stellar could connect individuals and companies around the world to enable financial growth and payments and probably not cut into Ripple’s market.

Realistically, Stellar may have the advantage in the Stellar Lumens vs Ripple XRP contest. If Stellar gets into emerging markets first, and is able to create anchors in those markets. They could pull business away from traditional banks in those markets and thereby pull potential business away from Ripple.

Is it a Conflict?

However, what is more than likely is that the Stellar Lumens vs Ripple XRP “conflict” is all hype and conjecture and they will find a way to coexist. Ripple currently has a market share of around $47B and Stellar has $10.5B. Both are just starting to become used around the globe. That means right now, both have room for growth. Both could find a good amount of success in their specific niches without ever coming into direct contact. Others are pinning the market cap of each as a sign of its importance and influence or impact. But that doesn’t really work. Ripple was around first, and they are geared at making money more than Stellar. Stellar is looking to give more people financial freedom and potential. Which could have a larger impact in the long run?

People are pitching this as a conflict or a zero-sum situation. Reality is more fluid in that we do not know what the full market potential for these two groups is just yet. There’s not necessarily a direct correlation between Ripple’s value and Stellar’s. There’s also no direct correlation between one winning and the other losing.