Both XRP and Stellar Lumens (XLM) are distributed ledger technology (DLT)-based platforms that aim to provide cross-border payments solutions between large banks and financial firms. However, Stellar’s products have also been developed for the individual consumer.
Notably, the Stellar payment network is a fork of the Ripple protocol and was founded by Jed McCaleb in 2014. McCaleb is also the co-founder of the Ripple protocol. When the Stellar project was proposed, a non-profit Development Foundation was launched as well – in order to support the ongoing development of the Stellar platform.
Stellar Backed By Stripe
One key difference between XRP and Stellar is that the latter was created by a non-profit organization. Due partly to the lower overhead costs of operating as a non-profit entity, the transaction fees on Stellar’s network are quite low. Early stage investors in the Stellar project include San Francisco-based Stripe, an internet-based payment processing service.
Similar to how the XRP cryptocurrency (developed by Ripple Labs) is used to facilitate transfers between two parties who may use different fiat currencies, the Stellar network also allows users to send and receive payments to/from bank accounts that support different currencies – without having to pay high currency conversion fees.
Transactions Only Cost Fractions Of A Cent
For example, the Stellar network can be used to send a payment in British pounds (GBP) to an account that accepts USD. The sender of the payment on the platform only has to pay a 0.00001 XLM network usage fee – which is only a fraction of a cent.
San Francisco-based Ripple Labs has also developed products which are quite similar to those offered by Stellar. XRP is a cryptocurrency that was developed by Ripple Labs and its transactions are conducted on the XRP ledger, at incredibly small costs. In order to transact on the XRP ledger, however, an address must hold at least 20 XRP.
As explained on Ripple’s official website, users must hold a minimum of 20 XRP so that “the shared [XRP] global ledger [does not] grow excessively large as [a] result of spam or malicious usage.”
As most XRP community members would know, not all of Ripple’s products use XRP as the base currency. xCurrent, which does not use the token, is an enterprise-level software product that utilizes the Interledger Protocol (ILP) to “instantly” process international payments – as it allows for “inter-operability” between virtual and fiat currencies.
The Interledger Protocol was created by Ripple Labs, but its ongoing management and development is now handled by the World Wide Web Consortium (W3C) group. The W3C is an international body that creates open standards to support further growth of the internet.
MoneyGram Tests xRapid, xCurrent Supports Real-Time Messaging
Notably, xCurrent supports
Another popular product developed by Ripple Labs, xRapid, was also launched recently. If XRP is used to send payments using xCurrent, then Ripple refers to these types of transactions as xRapid. Prior to going live (production), xRapid was tested by leading money transfer services such as Western Union and MoneyGram.
One of the main benefits of using xRapid, according to Ripple, is that it provides liquidity through XRP – which allows money to be transferred cheaply and quickly.
Public Vs Private DLT Networks
Although Ripple, the company, claims to have partnered with around 150 different financial institutions who are either currently testing its products or are even using them in a production environment, the American fintech’s critics say that transactions on RippleNet are not transparent. That’s because it’s a private DLT-based payment network.
However, digital currency transactions on the Stellar network can be verified and seen by anyone – which is something that generally holds true for most public blockchains. Another thing which Stellar’s community focuses more on, compared to Ripple, is serving the underbanked – meaning helping to provide financial services to people who do not have access to modern banking services.
There have been a number of legal disputes between members and founders of Stellar and those working on Ripple Labs’ initiatives. One of the most notable disputes between the two involved digital asset exchange Bitstamp. There was about $1 million in cryptocurrency that was held on Bitstamp – which had been claimed by both the Stellar Development Foundation and Ripple Labs.
Bitstamp had asked the courts for permission to transfer the disputed amount to Stellar’s foundation, as it had claimed that it was unable to determine whether the funds belonged to McCaleb’s cousin, Jacob Stephenson, or if Ripple Labs was the actual owner of the funds. Stephenson, the defendant, had reporteldy sold the XRP tokens to Ripple through Bitstamp.
According to Ripple, this transaction was in violation of certain terms and conditions that McCaleb had agreed to as a former board member at Ripple Labs. As CryptoGlobe reported in late September, McCaleb had been accused by Ripple’s board members of selling more XRP than he was allowed to (during a certain time frame)- as per terms stated in the contract. Although it is unclear exactly how many XRP tokens McCaleb holds, it is well over 5 billion XRP.
Ripple Predicts Asian Market Takeover And a Leaner Payments System In 2020
Determination to outdo the western markets has been a motivation behind why an ever increasing number of Asian organizations were adopting blockchain technology
Ripple’s focus on the cross border transaction market has been evident from all its updates and developments. But apart from this, the company has revealed that they want to create a more seamless payment network easily accessible to society.
In a recent Ripple blog post, Marcus Treacher, the Ripple SVP Customer Success spoke about what lies in store for financial markets in 2020.
The Ripple official had five major pointers as to what might change in the coming months. Treacher spoke about how the international payments market will continue to get faster and smaller by leveraging emerging technologies. He claimed that there will be more developments oriented towards consumer solutions and increased SME needs.
Marcus Treacher opined that major mainstream banks will delve fully into making cross border transactions faster than ever. This is expected to be done by reducing overhead costs, a major hindrance in the current scenario. To carry out this plan, banks are expected to use upcoming technologies like the Interledger Protocol [ILP].
Today Ripple works closely with a lot of institutional investors and the insights the company received are invaluable. Treacher predicted that in the coming months, banks will turn to cloud providers of banking technology to help reduce overhead costs. According to the Ripple blog:
“…cloud-hosted banking technology providers have developed new platforms with modern methods, pioneers of cloud service providers are ideally positioned to easily and inexpensively integrate into emerging blockchain networks, Artificial Intelligence (AI) engines and other emerging fintech categories—meaning the competitive advantage of innovative banks over slower-moving rivals will be intensified.”
Building consumer solutions on an international level was also a major area of interest for Ripple and other companies. One concept being tested out is in the field of instant cross border settlement. This would mean that an international tourist can conduct payments in a foreign country while trading in their native currency.
This would be done by tying up banks in multiple countries under the umbrella of a decentralized blockchain network. Micropayments have been tested out in small scale applications like Telegram and Line but the vision for the future is to scale it on a global level.
Small-to-Medium Enterprises [SMEs] are expected to be the biggest beneficiaries of the burgeoning decentralized economy. Marcus Treacher stated that if SMEs use blockchain technology, it will free up more capital for reinvestment. This is then expected to open up SMEs to new markets.
The Asian and the South Asian markets have taken multiple steps over the past few months to become major players in the decentralized economy. This determination to outdo the western markets has been a reason why more and more Asian companies were adopting blockchain technology. Treacher revealed that this rapid expansion will increase the digital asset trade rate coming in from Asia, which at present stands at a whopping eighty percent.
XRP Flips Key Resistance Into Support: Can Bulls Push Prices Higher?
XRP May Soon Explode Against Bitcoin, Analyses Show
Over the past few weeks, all cryptocurrencies — from Bitcoin, Ethereum and XRP to Digibyte, Waves, and Electroneum — have surged higher, gaining dozens of percent apiece as buying pressure has washed over the cryptocurrency market.
Altcoins have interestingly taken the front seat in this recent surge, seemingly denying a trend of Bitcoin-first price action over the past year.
This market price action, per CNN-featured cryptocurrency analyst Luke Martin, has allowed XRP’s pair against Bitcoin (XRP/BTC) to retake a key support level, which it has sustained for five days in a row. This pivot purportedly is “bullish,” meaning Martin is “expecting outperformance.”
It isn’t only Luke Martin that has pointed out the XRP/BTC trading pair is looking primed to break upwards.
Per previous reports from Ethereum World News, Michael Van De Poppe, contributor to CoinTelegraph and a trader at the Amsterdam Stock Exchange, revealed in a TradingView post published Wednesday that he expects for XRP/BTC to soon explode 170% higher.
He noted that the pair is on the verge of breaking out of a downtrend that has constrained prices since the start of 2019, before adding that XRP has held a very important historical support level against Bitcoin, suggesting bullish strength.
Poppe’s chart also pointed out that the recent price action is eerily reminiscent of an XRP/BTC break out in 2018, suggesting that a surge of dozens of percent can be had if history repeats itself.
XRP/USD Performance a Different Story
Although the prospects for XRP/BTC are looking positive per the above analyses, the outlook for the cryptocurrency’s performance against the dollar is looking harrowing.
A trader recently said on Twitter that it is “difficult for me to be bullish on Ripple right now.”
Backing his assertion, he looked to a chart of XRP against the U.S. dollar on a monthly basis. The trader depicted that despite the recent 35% surge off local bottoms, prices not seen in years, the cryptocurrency remains decisively below a key resistance that has been absolutely essential for the asset’s past two to three years of price history.
What’s more, it was actually rejected at the resistance level, suggesting the macro bear trend for XRP remains intact.
It is important to note that even if the cryptocurrency falls against the dollar, it can still rally against the dollar.
Photo by KaLisa Veer on Unsplash
Ripple’s On-Demand Liquidity Services Grew Six-Fold Last Quarter
Ripple Insights has published its quarterly markets report, which reveals that the company and its XRP token experienced mixed growth in 2019.
Ripple’s On-Demand Liquidity (ODL) services, which facilitate cross-border settlements, saw noticeable growth. These services handled 550% more value in Q4 of 2019 than they did in Q3. In raw transactions, those services saw a 290% increase in activity.
This growth is reportedly due to greater adoption. In less than a year, over 24 financial companies signed on for ODL, including Viamericas, FlashFX and Interbank Peru.
Ripple’s most notable client may be MoneyGram, which began to use Ripple’s services last August. This partnership has been particularly successful in Mexico, a market where MoneyGram is moving 10% of its volume through ODL.
Fewer Exchange Sales
Despite growing demand for ODL, Ripple sold relatively little the XRP token in Q4. Though this was partially due to a change in its measurements, Ripple also cut back its sales deliberately in order to act as “disciplined, responsible stakeholders.”
The company paused programmatic sales entirely in Q4, causing sales in that category to fall to zero. In a separate category, Ripple executed over-the-counter (OTC) sales with a “few strategic partners,” but significantly
The end result is that Ripple sold just $13 million XRP tokens over the course of Q4. This represents a five-fold decrease from Q4, when it sold $66 million worth of XRP.
Additionally, XRP’s daily trading volumes fell to $187 million in Q4. By contrast, the token’s daily volume in Q3 was $198 million, and its daily volume in Q2 was $430 million.
Token Supply and Demand
At first glance, these trends suggest that XRP is no longer highly sought after. However, Ripple seems to be releasing its XRP token into circulation in a calculated way.
It’s not yet clear if this strategy will affect prices positively. In the short term, XRP lost about 23% of its market value during the last quarter of 2019. By comparison, Bitcoin only lost about 14% of its market value during the same period.
It is possible that XRP token prices may not be a concern in the future: Ripple CTO David Schwartz recently proposed an XRP-backed stablecoin to help users avoid volatility.
In the meantime, practical applications targeted at consumers may drive up demand for the token. This week, the popular payment processor BitPay integrated XRP payments, allowing merchants to accept the cryptocurrency.