Ripple or Stellar, that is the question
When it comes to blockchain technology, there are many platforms to choose from. However, two of the most popular and promising options are Ripple and Stellar. Both offer unique features and benefits to users, making it difficult to decide which one to choose. In this blog, we will compare these platforms and help you make an informed decision.
Ripple: the banking platform
Ripple, established in 2012, is a real-time gross settlement system (RTGS), currency exchange, and remittance network built on a distributed ledger called XRP Ledger. It is based on a permissioned blockchain, which means the validating servers are controlled by trusted, vetted institutions. Ripple aims to be a global leader in facilitating cross-border payments and currently has partnerships with over 300 financial institutions worldwide.
Ripple's advantages
One of Ripple's distinct advantages is its transaction speed. It has the potential to settle 1,500 transactions per second (TPS), making it one of the fastest blockchain platforms globally. This speed is critical for large-scale financial institutions that require real-time settlements. Ripple's technology also offers transparency and lower transaction costs, which are significant benefits for financial institutions.
Ripple's disadvantages
On the other hand, Ripple's technology is centralized, which goes against one of the fundamental principles of blockchain: decentralization. Additionally, XRP has faced controversy for years, with allegations of XRP being a security or unregistered security still lingering today. Ripple is also very dependent on financial institutions, making the company and its product more susceptible to regulatory scrutiny.
Stellar: the coin for the people
Stellar is a decentralized, open-source blockchain platform launched by Ripple's co-founder Jed McCaleb in 2014. Unlike Ripple, Stellar offers a public blockchain that allows anyone to participate in securing the network. Stellar has been designed with the goal of facilitating fast and affordable cross-border payments for individuals, small businesses, and large enterprises.
Stellar's advantages
Stellar has a higher transaction speed than Ripple, with the potential to handle up to 3,000 TPS. The platform's consensus algorithm, known as the Stellar Consensus Protocol (SCP), is also unique in that it allows users to vote on network changes actively. This system allows for more decentralized decision-making and governance, allowing for more transparency and security for assets moving through the network.
Stellar's disadvantages
However, compared to Ripple, Stellar has fewer partnerships and is more geared toward microtransactions. This means that Stellar may not be the best option for financial institutions or large-volume transactions.
Conclusion
Both Ripple and Stellar offer unique benefits that make them attractive to different audiences. Ripple is a reputable financial platform with more partnership agreements and targeted towards financial institutions with high transaction volumes. Stellar, on the other hand, is a decentralized blockchain designed for individuals and small businesses, offering low transaction costs and greater transparency. In the end, the choice between the two platforms depends on individual needs and circumstances.