Boasting “Stellar” Returns in 2018, The “Ripple Killer” May Be Here

stellarStellar (XLM) Could Give Ripple a Run for Its Money

Ripple, Ripple, Ripple. This cryptocurrency is on everyone’s lips these days. After all, Ripple has shot up by more than 1,100% in the past one month and by more than 43,000% in just one year!

It won’t be too far-fetched to say that overnight riches have been made with this cryptocurrency. Countless young investors have turned their modest investments into ginormous jackpots in a very short span of time.

Somebody in my extended friends has just turned an early $15,000 investment into more than $140,000. There are countless other examples like these flooding Ripple’s subreddit these days. So, it’s obvious that Ripple is flashing dollar signs in everyone’s eyes.

Just yesterday, I received a call from a distant relative asking me if now was a good time to invest in Ripple. My response, however, may not appeal to readers blinded by Ripple’s flashing dollars.

I asked him to look into Stellar Lumens (XLM) instead. It is another digital currency, which is posing to be a “Ripple Killer.” This digital currency is up more than 700% in the past one month and is still trading for less than a dollar apiece.

stellar chart

Chart courtesy of

So let’s begin with responding to the first question that may have just popped up in your head.

What Is Stellar Lumens (XLM)?

Quite simply, Stellar is a blockchain-based network and “lumens” are its digital currency—its cryptocoins—just like “bitcoins” are to the Bitcoin network or “ether” to Ethereum.

Stellar is a platform for users to move money across borders cost-effectively. Stellar allows for an easy, fast, and secure way to transact (make or receive payments) in any currency in the world.

Since the transactions take place across countries, you can imagine that any number of currencies may be involved. To bypass the trouble of exchanging one currency into another and incurring hefty fees in the process, users can just buy lumens and transact with them. In short, Stellar makes international transactions both cheap and fast.

Wait, isn’t that what Ripple is doing? You may want to argue here that Stellar is nothing more than a cheap clone of Ripple.

But the two are not quite the same.

Ripple-vs-stellarRipple vs. Stellar

Stellar is more like Ripple’s fraternal twin. It was hard-forked from Ripple back in 2014. There’s a common brain who created both these technologies. Jed McCaleb—the famous crypto-world personality who founded the notorious cryptocurrency exchange, Mt. Gox—is both the co-founder of Ripple and the creator of Stellar.

So obviously, the two shared similarities in the beginning—but that’s only up until the summer of 2015. Beyond that point in time, Stellar neither shared the same code as Ripple nor its ideology.

The key difference between Ripple and Stellar is their target market. Ripple is being marketed to banks. Stellar is being targeted to the average laypersons—you and me.

It’s true that Ripple is doing the exact same thing as Stellar—allowing cheap and fast cross-border money transfers. But Ripple wants to be the middleman between banks and people. On the contrary, Stellar wants to cut out the banks from the equation and be the middleman between people and people. On top of that, Stellar is reportedly cheaper than Ripple when it comes to transaction fees.

Now, you may ask why Stellar isn’t as popular as Ripple. I can give you a one-word answer for that.


Ripple gets a lot more media coverage than Stellar, which has blown it into a full-fledged crypto-brand. Ripple had a first-mover advantage in the industry. It arrived three years earlier than Stellar and so, obviously, had a head start.

Plus, strong PR within Silicon Valley as well as Wall Street has helped it form significant partnerships in the corporate and financial worlds. Ripple’s technology is already being tested by a number of international banking giants, which is why the average Joe is getting so keen on this idea.

Although Stellar may have been late to the party, it is now closely tailing Ripple.

Why Stellar Could See Exponential Growth

Stellar, like Ripple, is also rubbing shoulders with the bigwigs. Top of the list is Big Blue.

Just recently, Stellar entered into a partnership with International Business Machines Corp. (NYSE:IBM) to create a cross-border payments solution using lumens.

IBM will be using Stellar’s blockchain technology to build an international network that would connect people and banks across a number of big and small countries, allowing them to transact in forex, using only Stellar lumens. (Source: “IBM and Stellar Are Launching Blockchain Banking Across Multiple Countries,” Fortune, October 16, 2017.)

Think of it like this: A buyer sitting in Afghanistan may be able to send a secure payment to a seller sitting in a small town in Somalia. The transaction would be conducted in lumens and neither take days to settle nor take up hefty transaction fees. It sounds like a pipe dream, except it’s much closer to becoming a reality than you think.

Some famous banks are also showing interest in Stellar. To name a few, global banks like Spain’s Banco Bilbao Vizcaya Argentaria SA (NYSE:BBVA), Japan’s Mizuho Financial Group Inc. (NYSE:MFG), Australia’s National Australia Bank Ltd. (ASX:NAB), and Canada’s Toronto-Dominion Bank (NYSE:TD) are getting involved with Stellar.

Analyst Take

Ripple’s moat could actually turn out to be its Achilles heel. Remember that Ripple’s blockchain technology is open source and its primary target market is the banking sharks.

The same banks shaking hands with Ripple right now may actually stab it in the back should they find an opportunity. There’s no reason for them not to replicate Ripple and bypass using its service altogether.

You may now question why other banks would ever want to use their competitors’ platform. The answer is simple. They’ll use whatever service saves them money. And economic theory suggests that competition must result in plenty of these cheap services.

Forget banks. Any major corporation could create a Ripple clone. Think Visa Inc (NYSE:V), Mastercard Inc (NYSE:MA), or even Paypal Holdings Inc (NASDAQ:PYPL).

My point is that the ultimate success of any platform will depend not on who uses it, but on how many use it. Obviously, there are more people in this world than banks and, mind you, Stellar is reaching out to people.

It should be easy for you to put two and two together now. I’m looking at the bigger picture that involves not a bunch of money-hungry corporations, but humanity at large. For that, I’m thinking “long term.” This is exactly why I pitched Stellar to my relative and would do the same to you. Only time will tell if I’m eventually right or wrong.