Difference between RIPPLE and STELLAR

sim1981

1) Overview

RIPPLE is a real-time gross settlement system (RTGS), currency exchange and remittance network. The Ripple Transaction Protocol (RTXP) or Ripple protocol is built upon a distributed open source Internet protocol and consensus ledger.
Native currency is called Ripples (XRP)
Ripple is supported by Ripple Labs company.
www.ripple.com

STELLAR is a real-time gross settlement system (RTGS), currency exchange and remittance network. The Stellar protocol (SCP) is built upon a distributed open source Internet protocol and consensus ledger.

Native currency is Lumens (XLM)
Stellar is supported by a nonprofit, the Stellar Development Foundation (SDF)
www.stellar.org

Both networks support tokens representing fiat currency, crypto currency, commodity or any other unit of value such as frequent flier miles or mobile minutes. Both Ripple and Stellar are separately based around a shared, public database or ledger which uses a consensus process that allows for payments, exchanges and remittance in a distributed process.

2) History

Ripple
The predecessor to the Ripple payment protocol, Ripplepay, was first developed in 2004 by Ryan Fugger. Ryan Fugger conceived Ripple in 2004 after working on a local exchange trading system in Vancouver. The intent was to create a monetary system that was decentralized and could effectively empower individuals and communities to create their own money. Fugger later built the first iteration of this system, RipplePay.com.

In May 2011, Jed McCaleb began developing a digital currency system in which transactions were verified by consensus among members of the network, rather than by the mining process used by Bitcoin.
In August 2012, Jed McCaleb hired Chris Larsen and they approached Ryan Fugger with their digital currency idea. After discussions with McCaleb and long-standing members of the Ripple community, Fugger handed over the reins.
In September 2012, Chris Larsen and Jed McCaleb co-founded the corporation OpenCoin.
OpenCoin began development of the ripple protocol (RTXP) and the Ripple payment and exchange network.
On 26 September 2013, OpenCoin officially changed its name to Ripple Labs, Inc

Stellar
Stellar was founded in early 2014 by Jed McCaleb and Joyce Kim.
Initially, Stellar used the Ripple protocol. A fork in Stellar network prompted SDF to take steps to build a new consensus protocol, which resulted in the SCP. SDF claimed the fork resulted from a flaw in the Ripple protocol. Ripple maintains that its consensus network is not vulnerable to the issue encountered by Stellar.
The Stellar Development Foundation with the help of Stanford University Professor DAVID MAZIERES then created an updated version of the protocol with a new consensus algorithm called federated Byzantine agreement (FBA), based on entirely new code. The code and whitepaper for this new algorithm were released in April 2015, and the upgraded network went live in November 2015.

3) Mission and Use Cases

Ripple works with banks to transform how they send money around the world. Ripple provides global financial settlement solutions to enable the world to exchange value like it already exchanges information – giving rise to an Internet of Value (IoV). Ripple solutions lower the total cost of settlement by enabling banks to transact directly, instantly and with certainty of settlement.

Use Cases https://ripple.com/solutions/
Corporate Disbursements: Banks can offer real-time, on-demand, completely traceable and data-rich international payment services to their corporate customers, allowing them to achieve superior working capital management, high Straight-Through Processing rates and automatic reconciliation.
Retail Remittances: Ripple enables banks to provide a low-cost remittance service with a drastically improved customer experience. With Ripple, banks can offer their customers real-time remittances with up-front visibility into rates and fees, payment status tracking and delivery confirmation.

Stellar mission is to expand financial access and literacy worldwide.
It is a platform that connects banks, payments systems, and people.
Stellar connects people to low-cost financial services to fight poverty and develop individual potential by moving money quickly, reliably, and at almost no cost.

Use Cases: https://www.stellar.org/how-it-works/use-cases/
Micropayments: Decrease the cost of smaller transfers. Offer incremental payment options to customers.
Remittances : Send money to different countries quickly, for a fraction of a cent. Facilitate low-cost payments between different currencies.
Mobile Money : Make mobile money platforms interoperable. Let customers send MM to recipients with different providers.
Social Enterprises + NGO Projects : Use low-cost financial services to bring about sustainable social change.

4) Native Currency

Ripple XRP https://ripple.com/xrp-portal/

Of the 100 billion XRP created, 20 billion XRP were retained by the creators, who were also the founders of Ripple Labs. The creators gave the remaining 80% of the total to Ripple Labs, with the XRP intended to fund operations.

As of May 7th, 2017
TOTAL XRP HELD BY RIPPLE LABS is 61,688,925,291
Total XRP Held by Others including creators is 38,305,873,86

Ripple Labs currently plan to distribute XRP primarily through business development deals, incentives to liquidity providers who offer tighter spreads for payments, and selling XRP to institutional buyers interested in investing in XRP. Ripple Labs expect to hold approximately 50 billion XRP by the end of 2021.
XRP is a deflationary coin. 100 billion XRP were created. When a user conducts a financial transaction in a non-native currency, Ripple charges a transaction fee. The purpose of the fees is to protect against network flooding by making the attacks too expensive for hackers. This transaction fee is not collected by anyone; the XRP is destroyed and ceases to exist.

Stellar Lumens XLM https://dashboard.stellar.org/

Originally, the native coin of Stellar network was called Stellar STR.
After the network was upgraded in 2015, STR was replaced with XLM to avoid confusion between the Stellar network name and its native currency.

100 billions of Lumens were originally created.
XLM is an inflationary coin. The Stellar network has a built-in, fixed inflation mechanism. New lumens are added to the network at the rate of 1% each year. The network also collects a base fee for each operation in a transaction. The funds from base fees are added to the inflation pool.

As a balancing measure for the ecosystem, anyone who holds lumens can vote on where the funds in this pool go. Each week, the protocol distributes these lumens to any account that gets over 0.05% of the votes from other accounts on the network. The votes are calculated based on total XLM.

Lumens Distribution as per Stellar mandate: https://www.stellar.org/about/mandate/
50% for the world via the direct signup educational program
25% for nonprofits to reach underserved populations via the increased access program
20% for the Bitcoin program
5% for operational costs

XLM Distribution as per May 13th, 2017:
Lumens available not hold by SDF: 9.54 Billion XLM (including 2 Billion XLM held by Stripe)
Total Lumens held by SDF: 93.36 Billion XLM

Luminer

@sim1981 Good break down. I've also been thinking this type of data can be very effective and useful in a infographic with the key items.

ZachWeisman

Can anyone explain the rationale behind Stellar inflation?
Why is this needed at all?
Why is it a good thing?
According to Austrian views, inflation of a currency supply is not a good thing because it robs purchasing power from existing currency holders.
Can someone that agrees with Austrian economics chime in on this?
Can someone that agrees with Keynesian economics chime in on this?

MisterTicot

Indeed, 1% inflation means that your money loose 1% of its value every year. It's a tax.

IsaacKarjala

xlm is supposed to be a protection for the Stellar Network against spam and DoS attacks, Stellar accomplishes this by requiring a minimum balance of xlm to participate in the network and assessing a per transaction fee to be paid in xlm. Inflation (devaluation) of xlm means cheaper network participation and transactions, which is good as long as it doesn't get so cheap that the spam and DoS attacks it's meant to prevent are not enabled.