Stellar vs. Ripple – Which One Should You Choose?

Updated on January 7, 2024

At a Glance

  • Ripple (XRP) focuses on fast, low-cost international transfers for banks.
  • Stellar (XLM) aims to provide affordable transfers for individuals, especially in developing countries.
  • Ripple is more centralized, targeting the banking sector, while Stellar is decentralized and focuses on accessibility.
  • Both share similarities like distributed ledger technology, fast transactions, and private nodes.

Ripple and Stellar are two of the companies that offer cryptocurrency, and because they are not as popular as Ethereum or Bitcoin, you might not know a lot of things about them. However, upon reading about them, you notice some similarities, which makes it harder for you to choose between them. Fortunately, that is exactly what we are here for – to show you what makes the two of them different.

If you want to pick between Stellar vs. Ripple, all you have to do is read this post and get familiar with the things that set the companies apart from each other.

Stellar vs. Ripple: Overview

Ripple and Stellar have similar blockchains, and because of that, many people end up comparing the two. They are two altcoins that have been around for more than 6 years. Back when one Bitcoin reached the level of $20,000, Stellar and Ripple also gained a lot of traction.

Both Stellar and Ripple have been founded by the same individual, Jed McCaleb. He collaborated with Ryan Fugger in order to make Ripple and XRP. Its goal was to become a crypto network that didn’t rely on the same energy-consuming process as Bitcoin. Later on, though, McCaleb and the rest of the team at Ripple started having major disagreements. As a result, McCaleb decided to leave. After that, together with Co-Founder Joyce Kim, McCaleb started Stellar in 2014.

Comparing Ripple and Stellar

In order to compare Stellar and Ripple, you need to understand them and their differences. Here are some details about both of them so that you can make an informed decision.

What Is Ripple?

Ripple is a network that uses the XRP token. It was created back in 2012 by Chris Larsen and Jed McCaleb. Ripple is the technology used, while XRP is the token. The crypto has the 3rd market capitalization with the XRP/USD price being $0.32.

Ripple allows banks to make transfers more easily and much faster. In general, people using Ripple can make international transfers that are completed in a matter of seconds, and the price is very low too. This is to prevent any cross-border payment system challenges, like high prices, inefficiency, and lack of speed.

No Third-Party Transfers Needed

The company uses distributed ledger technology. Because of this, there is no need for a third party to make the transfer possible. Transferring money across borders can happen quickly while cutting some costs in the process. On top of that, XRP can provide liquidity, which is great for banks.

Also, even though banks are the ones that use it the most and they are the target market, anyone is free to use Ripple as they wish. Even individuals who are passionate about cryptos can take advantage of the amazing technology.

What Is Stellar?

Stellar was founded by Jed McCaleb, one of the Ripple co-founders. The company was created in 2014. Its cryptocurrency is known as XLM or Lumens. Just like Ripple, Stellar is also very affordable and quick in making transfers, and it has a very similar coding. Since it was established by one of Ripple’s co-founders, this isn’t such a big surprise.

More Accessible

Stellar’s cryptocurrency is more accessible for the average individual. This is what makes it unique. Unlike Ripple that is more directed towards banks, Stellar is focusing more on people, especially those who live in parts of the world that are still developing. As such, people who live in rather poor areas of the planet will be able to interact with the global economy. Not only that, but the prices are not high either, so transactions will be easier for them to perform.

Direct fiat currency exchange is also possible thanks to the protocol that Stellar follows. Usually, the money of the sender is changed into Lumens, whereas Lumens is converted into the currency of the receiver.


One of the most obvious differences between the two is the fact that they have different algorithms. Not only that, but XRP coins are deflationary and Lumen coins are inflationary. Also, Stellar is not as centralized as Ripple.

Then, the two also have different target markets. As we mentioned earlier, Ripple is mostly directed towards banks. Banks are a very large market, after all, and they can bring a lot of money. Meanwhile, Stellar is focusing on individuals, particularly people from less-developed countries, giving unbanked people an opportunity to interact with the market at a global level. Because of that, Stellar likes to call itself “not for profit”. This is because it considers itself a platform that helps people rather than a platform that wants to make a profit.

Also, Stellar has a very experienced team, but it is much smaller compared to Ripple. They don’t focus on marketing as much as their competitors either. Ripple, on the other hand, is a very large organization and has way more capital raised. In the end, their target market is different, and it generates more capital as a result.


They are different, but they do share some similarities. Because of that, you may think that one of them would be enough. They are similar because:

  • They both rely on distributed ledger technology
  • Mining is not allowed on either of them and they both have private nodes
  • Transactions are very fast and almost free, which is why they are so great for international transfers and payments

Still, they are two separate platforms with separate goals among other things.

Which Is the Right Crypto for You?

It may be hard to choose between Stellar or Ripple’s cryptos. But your decision should be based on the near-term SEC action outcome. XRP has been removed from some of the largest exchanges. As a result, exchanging the coin is something that will have more limitations, and there will be less volume potential as well.

Because an SEC lawsuit is ongoing, it will be much harder for XRP to reach its full potential. A lawsuit was filed against Ripple, which took place because Ripple sold 1.3 billion dollars of unregistered securities.

So, focusing on XLM may be the better decision, at least for 2021. Stellar will likely grow the platform more and more, and there will be more partnerships coming. Therefore, the coin may get more traction slowly but surely. When this happens, XLM may be more likely to attract investment.

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Final Thoughts

Stellar and Ripple are both technologies with some great cryptocurrencies. XRP and XLM have gained more traction over the recent years, and XRP was the one that gained more capital overall. It is more focused on banks, while XLM targets individuals instead. But since there is an ongoing lawsuit involving Ripple right now, XRP may be affected, which may give XLM the chance to get one step ahead of it. If you want to invest in one of them, XLM may be the better option.

Frequently Asked Questions (FAQ)

What is Stellar?

Stellar is a decentralized blockchain platform designed to enable fast and low-cost cross-border transactions. It aims to connect financial institutions and individuals, facilitating the transfer of various assets, including cryptocurrencies and fiat currencies.

What is Ripple?

Ripple is a digital payment protocol and cryptocurrency that aims to enable fast and secure international money transfers. It aims to provide a seamless experience for financial institutions by using its native cryptocurrency, XRP, to facilitate liquidity and reduce transaction costs.

What are the main differences between Stellar and Ripple?

While both Stellar and Ripple aim to streamline cross-border transactions, there are some key differences between the two platforms. Stellar focuses on providing financial services to the unbanked population and emphasizes inclusivity. Ripple, on the other hand, primarily targets financial institutions and aims to improve the efficiency of their payment systems.

Is Stellar or Ripple more suitable for individual users?

Stellar is generally considered more user-friendly for individual users due to its focus on inclusivity and accessibility. It offers a user-friendly interface and wallet options, making it easier for individuals to participate in the Stellar network. Ripple, on the other hand, primarily targets financial institutions, so it may be less accessible for individual users.

Which blockchain consensus algorithm does Stellar use?

Stellar uses a consensus algorithm called the Stellar Consensus Protocol (SCP). This algorithm is designed to ensure the security and integrity of the Stellar network by allowing nodes to agree on the validity of transactions without relying on a central authority.

How does Ripple’s consensus algorithm differ from Stellar’s?

Ripple uses a consensus algorithm called the Ripple Protocol Consensus Algorithm (RPCA), formerly known as Ripple Consensus Algorithm (RCA). RPCA relies on a network of trusted validators to agree on the order and validity of transactions. Unlike Stellar’s SCP, which allows for decentralized participation, Ripple’s RPCA relies on a set of pre-selected validators.

Can Stellar and Ripple be used interchangeably?

Stellar and Ripple are separate blockchain platforms with their own unique features and goals. While they both aim to improve cross-border transactions, they have different target audiences and design philosophies. Therefore, they are not usually used interchangeably, and the choice between the two depends on specific use cases and requirements.

Are Stellar and Ripple decentralized?

Stellar and Ripple have different levels of decentralization. Stellar aims to be more decentralized by allowing anyone to participate in its network as a validator or participant. Ripple, on the other hand, relies on a set of trusted validators, which some argue makes it less decentralized compared to other blockchain platforms.

Can I invest in Stellar or Ripple?

Both Stellar (XLM) and Ripple (XRP) are cryptocurrencies that can be purchased and traded on various cryptocurrency exchanges. If you are interested in investing in either Stellar or Ripple, you can research and choose a reputable exchange that supports these cryptocurrencies.

Is Stellar or Ripple more widely adopted?

Both Stellar and Ripple have gained significant traction and have been adopted by various financial institutions and organizations. However, Ripple has generally been more widely adopted in the traditional financial industry, with numerous banks and payment providers using its technology to facilitate cross-border transactions.

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Frank Gogol

I’m a firm believer that information is the key to financial freedom. On the Stilt Blog, I write about the complex topics — like finance, immigration, and technology — to help immigrants make the most of their lives in the U.S. Our content and brand have been featured in Forbes, TechCrunch, VentureBeat, and more.

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