With the drama in the crypto scene in the last few weeks, it is easy to see that Stellar Lumens (XLM) has managed to come up in almost every news article. Especially with the coin managing to remain stable in the face of constant price slumps in the market, its future potential is constantly being weighed against Ripple (XRP).
Being in the crypto scene in the last few weeks should have gotten one acclimatized with US-based Ripple and its native token, XRP. The fact that it has also managed to gain credibility in wider financial circles or cling to more of its price valuation despite the price fall is hard to miss.
However, in the face of the Stellar’s steady rise to fame, much of the chatter around the crypto community circles around whether the blockchain project could kick out XRP from its place. Here’s why.
Stellar’s Rise to Fame
Stellar’s integration in 2014 by Ripple’s co-founder Jed McCaleb marked a milestone in the crypto world. It was created as a blockchain project with features which with time steadily rose and made it to the top 5 cryptocurrencies by market cap.
Based on latest market valuation, the coin is taking the bulls by the horn and is in the 5th position after significantly breaking support. Based on the nature of its network and the strategic partnerships, the coin is majorly gaining traction in wider circles.
Created as a Blockchain network, Stellar Lumens was developed to offer fast, cheap and reliable cross-border payments. In doing so, due opportunities to connect financial institutions, people all around the globe and payment systems are created and actualized.
With the common disparity between the mainstream financial world and the crypto world, exchange with fiat currencies is majorly perceived as difficult to achieve. It is noteworthy that Ripple was developed to create a link between financial institutions and international transactions with greater efficiency.
Stellar Lumens, however, seeks ways to provide developing worlds with low-cost financial services and options. In this case, not only financial institutions get to perform transitions but individuals can interact with one another with XLM as a medium of exchange.
Also, as a decentralised network, it offers a platform for launching ICOs. This is because Stellar’s payment protocol, Stellar Core, is majorly built on the Stellar Consensus Protocol Algorithm.
This algorithm provides a medium of reaching a consensus for recording and validating transactions without necessarily waiting on a closed system of nodes.
XLM is majorly designed to be self-replicating though initial supply is capped at 100 billion. This is explained with the fact that its total supply is programmed with an inflation rate fixed at 1% annually while all transaction fees get recycled.
With Ripple (XRP), this is not so. XRP is designed to be self-destructive in a way. With every transaction made with XRP, a small amount of the coin gets destroyed. This according to its developers is to protect the XRP Ledger from “denial-of-service attacks.” This simply means that over time, the supply of XRP will diminish.