XLM (Stellar Lumens) and XRP (Ripple) are two cryptocurrencies that have some common features as both aim to optimize and simplify international payments. However, they also have key differences.
What XLM and XRP have in common:
1. Purpose of use:
Both tokens were created to accelerate international payments, reduce their cost, and simplify working with different currencies.
2. Speed of transactions:
Both cryptocurrencies offer virtually instant transactions that are completed within seconds.
3. Low fees:
XLM and XRP provide minimal transfer fees, making them attractive to financial institutions and users.
4. Creator and inspiration:
The founder of Stellar, Jed McCaleb, was previously a co-founder of Ripple. This partly explains the similarity in technologies and approaches.
5. Application in finance:
Both projects aim to address the issues of traditional banking systems, such as the complexity and high cost of cross-border transfers.
Key differences:
1. Target audience:
XRP: Focused on banking institutions and large financial organizations.
XLM: Aims to support emerging markets, individual users, and non-bank solutions.
2. Consensus technology:
XRP uses its own Ripple Protocol Consensus Algorithm (RPCA).
XLM uses the Stellar Consensus Protocol (SCP), which is more decentralized.
3. Mission:
Ripple (XRP) aims to become a global means for bank transfers.
Stellar (XLM) aims to make financial services accessible to people without bank accounts and facilitate access to global markets.
4. Governance structure:
Ripple is managed by the company Ripple Labs, which makes the project more centralized.
Stellar is managed by the non-profit organization Stellar Development Foundation.
5. Token supply:
XRP was originally created with a fixed supply (100 billion tokens).
XLM has a dynamic supply that decreased after the token burn in 2019.
Conclusion:
Although XLM and XRP seem similar due to their goals and technologies, their differences in governance, target audience, and philosophy make them unique. XRP is better suited for large financial institutions, while XLM is for individual users and emerging markets.
