Stellar vs. Ripple consensus

By Answerly app | Answerly | 19 Mar 2021


The majority of the people are undoubtedly aware of Stellar and Ripple. Cryptocurrency enthusiasts compare them due to their similarities in the blockchain. This article will take a more approaching look at both of them; subsequently examining their key differences.  

Stellar vs. Ripple – The History

Ripple was created in 2012 by two American programmers Chris Larsen and Jed McCaleb. Its cryptocurrency is XRP, with the third top market capitalization. The main motive of Ripple is to make international transfers within seconds at no cost. The founders were determined to overcome the pre-existing problems with these payments. Hence, Ripple was the best option. Ripple works with ledger technology, making a third party useless and reducing cost, and saving time. 

On the other hand, Stellar was created by one of Ripple's co-founders, Jed McCaleb, in 2014. Its cryptocurrency is XLM or Lumen, while the technology is called Stellar. Both Stellar and Ripple share the same coding technology and allows quick and affordable funds transfer. However, Stellar's focus is to increase the abilities of those who live in under-developed countries and for an average person of a developing country. 

Stellar vs. Ripple – The Differences

Let's determine the critical differences between stellar and Ripple. 

Stellar vs. Ripple – Consensus Mechanism

The first difference between the two is the way that nodes reach a consensus or an agreement. As blockchain's status dynamically changes, they need a secure and reliable mechanism to ensure that all transactions are legit. The consensus mechanism performs this vital task without the need of a third party. 

The two most popular mechanisms Proof-of-Work and Proof-of-Stake, are used by Bitcoin and Dash, respectively. Stellar and Ripple don't use either of these. Stellar uses "Stellar Consensus Protocol," and Ripple uses "Proof-of-Correctness."

Stellar vs. Ripple – Transaction Throughput 

If we talk about transaction speed, both stellar and Ripple have close competition. It depends on what hardware you are operating Stellar core on, but it typically takes 3 to 5 seconds to confirm the transaction. In one second, you can make 3000+ transactions with a minimal fee of 0.01$ at 300,000 transactions. 

While Ripple takes an average of 4 to 5 seconds for a transaction fee of 0.29$, in terms of the price, it is evident that Stellar is the winner. However, the transaction timing doesn't differ much as well. 

Stellar vs. Ripple – Developer Friendliness

It comes down to which of these has the potential to gain more users. Most people loved XRP coins who fantasized about altcoin riches. With fast execution and low transaction fees, people were looking forward to it. But, Stellar offers are a wide range of products. The Stellar project offers worldwide payment apps that ease the currency-backed tokens existing on the Stellar network.

Moreover, there is a built-in decentralized exchange. It allows users to swap crypto, forex, or other securities. Stellar has also built a micropayments service, which is useful for tipping or subscriptions.

Stellar vs. Ripple – Native Asset Distribution

Ripple doesn't work like any other cryptocurrency or on the blockchain. It has its network, and XRP is just a digital asset, and the tokens are transferred through a digital system called a ripple network. In contrast, Stellar Lumens are based upon a blockchain network that connects to multiple financial institutions. 

Ripple has a centralized structure which is the biggest con, and only the developers know how much to release and how much they shouldn't. However, Stellar's decentralized system doesn't have any restrictions, and the has a decentralized exchange for cryptocurrency, forex, or securities. Users can easily swap between tokens with the help of simple functions of the protocol. 

Stellar And Its Anchors

Stellar lets any individual trade money with others using Lumens or XLM as a medium. In the real world, Institutions like pay-pal are our anchors, but in crypto terms, Stellar has entities known as "anchors" like Tempo, Stronghold, and Remitr. It simplifies the transaction process as all the different anchors connect to the Stellar network and lets you interact with others quickly and easily.  

Stellar's Safety Over Liveness

The FLP states that a deterministic asynchronous consensus system can have two of the following three features: 

  • Safety (results are valid and alike at all nodes)
  • Liveness (nodes that don't fail to produce a product)
  • Fault tolerance (the system can withstand the collapse of one node at any time)

The Stellar consensus favors fault tolerance and liveness over security. This means it prioritizes ledger closes and availability over everyone agreeing on what the ledger is, leading to several potential risk scenarios. Hence, we must prioritize the development of the new Stellar consensus algorithm and increase safety. 

Conclusion

Stellar's most significant advantage is decentralization, as we see that the world is moving towards this trend. Stellar has the edge over it. Even though Ripple has a good name in the industry, they still have to face XLM as they are moving swiftly and have reached in top 10 cryptocurrencies. 

It will be s sensible to go for XLM in 2021 because the project is looking forward to expanding partnerships and platforms, which is a breakthrough for the coin.  

 

 

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