What Makes Stellar Different To Other Digital Currencies?

What makes Stellar different from other cryptocurrencies that are capable of conducting fast transactions are the organizations called ‘’Anchors.’’ They are trustworthy entities that deliver credit lines to people that use assets such as Dollars or Euros.

Let’s see an example. If you live in the United Kingdom and you have a friend in Germany that needs 100 EUR, you can use the Stellar network by paying the equivalent amount in pounds to Anchor who in return will update the balance on the ledger which will be used by an anchor in other country to deliver the euros to your friend. If the transaction is conducted in XLM, the entirety of the transaction will cost less than $0.01.

What makes stellar different as well is apparent that the platform is quite dissimilar to other cryptocurrencies since it has an altruistic motive rather than only profits. The processing of cross-border transfers is a very complex process that involves domestic banks that maintain accounts in foreign jurisdictions and local currencies. However, the Stellar blockchain can shorten or eliminate the delays and complexity that is involved in the process. The XLM cryptocurrency can be used to provide liquidity and to also streamline the process and as some predict, the banks will use their own cryptocurrency to facilitate transfers similar to these in the future.

The long list of similarities between Stellar and Ripple will make some believe that there is no need for both but they do both have private nods without mining and they rely on distributed ledger technology. Also, they allow a free and instant transaction which makes them ideal for international payments and transfers. Despite the similarities, there are a lot of differences between Stellar and Ripple to account for the need for cryptocurrencies and one of the main differences is the target audiences and the goals behind the blockchains. Ripple’s creation happened to the only appeal to banks and Stellar’s creation was to extend the reach of the financial services across the world and to help the unbanked. Stellar refers to itself as ‘’not for profit’’ because its goal is helping other people rather than making money.

both of them also use different consensus algorithms with the unique consensus protocol for Stellar and proof of correctness for Ripple. Lumens coins are inflationary while XRPs are deflationary which means that they can increase and decrease in circulation. Ripple is more centralized and Stellar is more decentralized than traditional currencies. What makes stellar different is that it has a bigger and more experienced team and has not put as much emphasis on marketing. Of course, they are different in regard to their goal, size of the organization, consensus protocols and the inflationary and deflationary nature of the tokens.

With all of the differences between them, both of them are among the most popular cryptocurrencies and they even have similar prices. Those who want to learn which of the cryptocurrencies will come out on top if one has to go away, and the accurate answer won’t be provided. The world of cryptocurrencies is volatile and highly unpredictable. Right now, Ripple even has a bigger market cap than Stellar. Stellar has the potential to allow for cheaper and seamless exchange of currencies and has sufficient users to exchange the currency on a day to day basis.