Why Stellar Lumens Could Soon be a Major Competitor to Both Ripple and Ethereum

Currently, Ethereum and Ripple occupy the second and third spots for cryptocurrencies by market cap. The market cap for Ethereum is $90,566,348,282, and the market cap for Ripple is $44,646,047,527. These two coins have been able to earn these two top spots by developing a reputation for excellence in different areas. For Ethereum, these areas are for ICO’s, smart contracts, and DApps. For Ripple, they are fast and cheap payments, remittances, cross-border transactions.

However, despite the fact that these two coins have become dominant in these areas in the last two years, Stellar Lumens could soon challenge both of these coins in their respective areas, and become a true competitor for each coin.

Where Stellar Lumens Stands Now

Stellar Lumens currently has a market cap of $8,299,070,512. and is the 7th largest cryptocurrency by overall market cap. The XLM price is 45 cents. So, it is roughly one fifth as large as Ripple, and roughly one eleventh as large as Ethereum. It may seem like it would be impossible for Stellar to truly challenge Ripple or Ethereum for market cap dominance. However, Stellar is experiencing a lot of forward progress, and 2018 could be the year that it gains significant ground on both of these coins.

How Stellar Can Compete with Ethereum

Like Ethereum, Stellar also has the capability to launch ICO’s on its blockchain, and many ICO’s are starting to choose Stellar over Ethereum. For example, the Mobius Network, a $39 million ICO recently launched on the Stellar blockchain, choosing it over Ethereum.

There are many reasons why Stellar can be more appealing to ICO’s than Ethereum. The first is that Stellar has a built-in, distributed exchange. This means that with Stellar, it is not necessary for a third party exchange to be involved in order for coins to be exchanged. With Stellar, many coins, and even fiat currencies can all be exchanged easily.

Further, Stellar is both faster and cheaper than Ethereum. Stellar transactions only take 3.5 seconds, whereas Ethereum transactions take roughly 3.5 minutes. Further, the price to make 100,000 transactions on Stellar is only one cent. This is remarkably cheap. The speed, low cost, and fact that third party exchanges are not necessary for trading all suggest that Stellar will most likely be used more and more for ICO’s, and could quickly start gaining ground on Ethereum.

How Stellar can compete with Ripple

Stellar can compete with Ripple, because Stellar is essentially, very similar to Ripple and offers many of the same benefits. For example, both Stellar and Ripple have average transaction times that are five seconds or less. Stellar and Ripple are also both designed to facilitate frictionless cross-border payments that are extremely fast and cheap. So, both Stellar and Ripple can be easily used for remittances.

Further, both coins can be used for processing microtransactions. Also, each coin has major partners providing support to it. For Ripple, these partners are Bank of America and Merrill Lynch. For Stellar, it’s IBM. However, despite their similarities, there are also a few key differences that could possibly give Stellar an advantage over Ripple.

For example, Stellar has decentralized governance, whereas Ripple does not. The governance for Ripple is centralized. Many cryptocurrencies were designed specifically for the purpose of decentralization, and decentralization is often touted as being one of the key benefits of cryptocurrencies. So, the fact that Ripple is centralized and Stellar is decentralized can work in Stellar’s favor.

Having a powerful partner who is a leader in the tech world in the form of IBM is also extremely beneficial for Stellar. IBM can help Stellar solve problems and continue its expansion. Key partnerships can really help to move a project forward, and securing IBM as a partner could prove to be a crucial move for Stellar.

Conclusion

For the time being, both Ethereum and Ripple are substantially ahead of Stellar Lumens in terms of market cap. However, 2018 could be the year that Stellar makes incredible gains and starts to catch up to the two coins. Stellar has many benefits, and it is attracting a lot of attention. The price is still very low right now too, which makes it appealing to investors. Ripple and Ethereum will also likely continue to grow in 2018 because of the value they provide. However, Stellar could grow at a faster rate and close the gaps between the coins.

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Why Stellar Lumens Could Soon be a Major Competitor to Both Ripple and Ethereum