Stellar Vs. Ripple – The Ultimate Showdown

NOTE: At the end of the article, we have a GetSmart Quiz for you. If you correctly answer all the questions, you will receive (1) entry to win $4,000 CAD of Bitcoin! Draws are held at the end of every calendar month.
ripple vs stellar

In Brief:

  • Both Ripple and Stellar were created with the aim of disrupting the global financial system.
  • Ripple aims to partner with banks and financial institutions to improve cross-border payments.
  • Stellar works at the grassroots level to improve the global payments system.
  • Ripple holds 60% of the overall XRP tokens, while Stellar holds 5% XLM tokens.


Both Ripple and Stellar were created with the aim of disrupting the global financial system, and both cryptocurrencies have taken very different approaches to achieve their goals. For example, Ripple works closely with big banks and financial institutions to change the financial system and revolutionize cross-border payments. On the other hand, Stellar has taken a completely different approach and is working with people at the grassroots level and giving unbanked individuals access to financial services.

Ripple and Stellar have one goal, to disrupt the financial and cross-border payments. However, both approach their goal in different ways. Ripple was founded in 2011 by Jed McCaleb, one of the most prominent crypto community members. Due to continuous differences between the Ripple team and himself, McCaleb left Ripple and founded the Stellar Development Foundation.

What Is Ripple (XRP)?

Ripple (XRP) is currently the 5th largest cryptocurrency by market capitalization. However, a lot of people confuse Ripple and XRP. So, to clear that up, Ripple (aka RippleNet) is the technology, while XRP is Ripple’s native token.

Ripple has partnered with banks and financial institutions to enable banks to make cross-border payments within seconds and with almost no transaction costs involved. Ripple hopes to solve several challenges that the current cross-border payment systems face: speed, efficiency, and high costs.

Operating as a peer-to-peer, open-source, decentralized platform, Ripple allows users to transfer currency in the form of traditional fiat currencies or other cryptocurrencies. Ripple can be used by banks as a payment protocol, allowing banks to transfer cross-border payments in seconds, making remittance, currency exchanges, and real-time gross settlement possible. Transactions on Ripple are recorded on a public ledger, ensuring complete transparency. Ripple is building partnerships all over the world to allow seamless cross-border payments.

What Is Stellar (XLM)?

Stellar is very similar to Ripple but serves a different purpose. It allows users to transfer funds quickly and affordably. Lumens (XLM) is Stellar’s native cryptocurrency and plays a significant role in the Stellar network.

Stellar Lumens focuses on individuals, especially individuals in underdeveloped or developing parts of the world. Stellar aims to give individuals in poorer countries access to the global economy. XLM overcomes the issue of high fees and high transaction times by providing a quick and inexpensive method of transferring money anywhere in the world.

Also read: What is Stellar? A Comprehensive Guide

Ripple vs Stellar: What Are The Key Differences?

Target Audience

Ripple and Stellar have quite a few similarities, such as private nodes, reliance on distributed ledger technology, and instant transactions. However, there are also several critical differences between the two cryptocurrencies.

This is probably the most significant difference between Ripple and Stellar. Ripple has been designed keeping banks and major financial institutions in mind. It makes cross-border payments faster and cheaper, solving major issues with international payments. Ripple focuses on high transaction fees, high exchange rates, and payment tracking.

Stellar Lumens focuses on the underdeveloped and lower-income countries, focusing on limited access to the current financial system or entirely unbanked. There are 2 billion people that do not have access to banking services. Stellar Lumens targets these people, giving them access to banking services and more control over their money.

Consensus Mechanism

The consensus mechanism is the technology through which blockchains confirm and validate transactions without the involvement of any third party. Ripple uses the Ripple Protocol Consensus Algorithm (RCPA), while Stellar uses the Stellar Consensus Protocol (SCP). These algorithms do not waste computational resources like Bitcoin’s proof-of-work (PoW) and are a lot faster.

Token Distribution

XRP is Ripple’s primary token and is used as a utility token. Recently, there was a significant controversy regarding XRP and whether it is a security or not. What is a security token? A security token means that anyone holding the token owns a part of the company. However, we do not need to go into the details of the case. There are a total of 100 billion XRP in existence, and all of them have been pre-mined. Ripple does not need any miners or stakers. Ripple owns about 60 billion of the 100 billion XRP tokens that will ever be in circulation.

Similarly, Stellar has already pre-mined its 100 billion XLM, with the distribution of the tokens overseen by the Stellar Development Foundation. Stellar Foundation holds 5% of the tokens.  To counter spamming, Stellar has included a feature known as Spam Fees. The platform charges a nominal fee per transaction. The fee discourages spammers as multiple transactions would not be feasible.


Some of Ripple’s partners include American Express, SBI Group, Western Union, MoneyGram (not anymore), Accenture, GMT, to name a few.

Stellar Lumens also has a significant partnership with IBM for their IBM World Wire project. IBM World Wire is a global network that enables financial institutions to clear and settle cross-border payments in real-time.

Ripple vs Stellar – In Closing

  Stellar  Ripple 
Goal Focus on poorer and underdeveloped areas, helping individuals in these areas to gain access to the financial system. Work with banks to solve the problems of slow and costly cross-border payments.
Founders Founded by the Stellar Development Foundation Founded by Ripple Labs
Token Distribution More than 95% of the tokens to be distributed amongst people Founders own almost 60% of XRP
Consensus Algorithm Uses the Stellar Consensus Protocol (SCP) Utilizes the Ripple Consensus Algorithm (RPCA)
Native Token Uses Lumens (XLM) as its primary token. Uses Ripple (XRP) as its primary token.

Where Do I Buy XLM and XRP?

If you interested in Ripple and Stellar you can buy the tokens via CoinSmart. CoinSmart allows you to buy cryptocurrencies with ease via fiat.

How to Buy Stellar Lumens (XLM)

Alright, it's quiz time!

Before you take the quiz, make sure that:

  • You have a verified CoinSmart account (to get your reward if you successfully answer all the questions).
  • You use the same email in the quiz that you use to register your CoinSmart account.

Ripple vs Stellar GetSmart Quiz: Answer All The Questions And Earn An Entry To Win $1,000 CAD of Bitcoin

Enter your name
Enter your email
Which of the following uses computational resources?

IBM has partnered with Ripple. True or False?

Stellar owns how much % of the XLM tokens?