Source: @crypto-guides
The Ripple network (and its XRP token) was one of the first altcoin networks to be made during the early years of cryptocurrency, when people were still trying to figure out of what use was Bitcoin. The Stellar network (and its XLM or "Lumens" token) was another early altcoin network, although it was launched shortly after the launch of Dogecoin. Both networks were co-founded by Jed McCaleb, so there are many smilarities between them. There are also some key differences. This Guide will explain the similarities and differences between Ripple (XRP) vs Stellar (XLM).
There is a section in the "What is Ripple crypto (XRP)? - Ripple Guide" titled "Ripple (XRP) vs Stellar (XLM)"; for @crypto-guides -- Feel free to adjust as needed for Guide purposes.
Similarities between Ripple (XRP) and Stellar (XLM)
Founder (or Co-Founder)
Jed McCaleb was the CTO of Ripple before he left to found Stellar in 2014. Before founding or co-founding Ripple and stellar, Jed McCaleb had also founded Mt. Gox, the centralized Bitcoin exchange.
Code Base
Due to conflicting visions for Ripple, Jed McCaleb left Ripple in 2013. Joining Jed McCaleb to form Stellar in 2014 was Joyce Kim, who had been a venture capitalist at Freestyle Capital.
When they joined to found Stellar, they forked it from Ripple. Over time it incorporated a number of technical changes to distinguish itself from Ripple.
Purpose
Both Ripple and Stellar were designed to to make transfers of funds in a matter of seconds at almost no cost (since, generally, there is always a cost even if it costs nothing to the user of the network).
Ease of Use
If you've tried to wire money overseas or even to locations in the same country using banks or services such as Western Union, you've encountered both high fees as well as delays which are part of the money transfer process. Ripple and Stellar networks were built to facilitate international transfers instantly with almost no cost.
Accessibility
Anyone can use Ripple and Stellar, although both were made with different audiences in mind. At price levels similar to LEO and HIVE, Ripple (XRP) and Stellar (XLM) tokens can be easily acquired and used between institutions, peer-to-peer, or between an institution and an individual.
Differences between Ripple (XRP) and Stellar (XLM)
Target Audience
This is the most fundamental difference between Ripple and Stellar.
Ripple is geared for use by banks and other financial institutions. The Ripple network was made to connect banks, digital asset exchanges, and payment providers, thus making possible real-time settlement and lower transaction fees. At least 100 banks use Ripple in some way; among them are Royal Bank of Canada and Bank of America.
Meanwhile, Stellar is meant for use by unbanked individuals.
Profit-Making Status
Ripple's intended audience is banks and other financial institutions, so it has greater opportunities for making profits.
Stellar, on the other hand, operates as a non-profit bringing services to unbanked individuals.
Exchange Functionality
Anyone who holds XRP and wants to exchange it for another asset needs to take the XRP to another exchange.
Meanwhile Stellar allows people to convert their XLM/Lumens to other assets thanks to the exchange that's built-in to the Stellar network.
Smart Contracts
Although Ripple is a network which caters to banks and other financial institutions, its XRP token is "just money" like Bitcoin or Litecoin.
On the other hand, Stellar Lumens is programmable money thanks to smart contracts used by XLM. This would be of more use to individuals since it would also permit decentralized finance.
Degree of Decentralization
Compared to fiat currencies and Central Bank Digital Currencies, both Ripple and Stellar are decentralized.
However, Ripple is a more centralized network than Stellar. Consensus is reached on Ripple by a limited number of individuals or participating institutions. This is in contrast to Stellar, where anyone can participate in the consensus process.
In Conclusion
Both Ripple and Stellar are meant to facilitate the transfer of funds locally and internationally in less time and at near-zero cost. With Stellar being forked from Ripple, the two networks are very similar.
Ripple was made to work with banks and financial institutions, and the resources used to promote Ripple to that market reflect that audience focus. Stellar was made as an network to bring banking services to the unbanked, and it considers itself a non-profit.
Ripple (XRP) was made to be "just money" as its predecessors Bitcoin (BTC) and Litecoin (LTC). Stellar Lumens (a.k.a. XLM) was made to be programmabe money, with all that implies. What Stellar (XLM) lacks in resources compared to Ripple (XRP), it makes up for in additional functionality and greater decentralization.
With both XRP and Lumens priced at levels comparable to LEO and HIVE, both are tokens are affordable and easy to acquire. Given the legal woes surrounding XRP due to the lawsuit filed against Ripple by the U. S. Securirites and Exchange Commision, enthusiasm for XRP isn't what it would normally be. This and Lumens' lesser price make XLM a better buy. Legal woes aside, both XRP and XLM are winners.