Ripple’s (XRP) Success Brings High Demand to Stellar (XLM)
One cryptocurrency making headlines lately is Stellar, trading as XLM, as she continues to grow and be developed for use in smaller applications. While up over 900% from the start of December 2017, XLM has made major strides in becoming a premier altcoin as she is now ranked 8th among all coins in total market cap. Closing in on a longtime favorite, Litecoin, Stellar has seen extreme growth since her inception back in 2014 and has made strong returns in the past year as all cryptocurrencies have had success from the emerging market benefiting from capital going into a multitude of digital assets.
As many know the story of Ripple, Chris Larsen and Jed McCaleb took over XRP from Ryan Fugger after a few years of little success. However, McCaleb later moved on to start his own cryptocurrency in Stellar. It is of note that he still does hold a tremendous amount of Ripple as his net worth was valued at $20B a few days ago which would rank him 40th in the world. Stellar was originally set up on the Ripple protocol, but now has her own native currency. This relationship is crucial to the cryptocurrency’s success as McCaleb and Larsen clearly have a great rapport. While XRP continues to do well, XLM can ride this wave of success. Also, since they are not directly competing with one another, the business relationships and contracts can truly benefit both large and small transactions from each company without taking value away from the other.
While both XRP and XLM are designed so users can transfer money internationally securely and quickly, XLM is geared towards smaller populations with far less capital to transfer. This is a significant advantage to most other digital currencies as, like Ripple, many of these centralized companies are vying and competing for the absolute largest financial institutions in the world in order to maximize their volume in total capital exchanged. Stellar is deviating far from this crowded field and moving towards the very back-end transactions where the common populous will be involved. From bypassing the banks, we see that people all over the world can directly transfer remittances without the middle-man nor the regulations involved which will in turn save them money.
As of note, XLM is a non-profit which could return less on their investment compared to other cryptocurrency corporations. I believe this will actually work in their favor as investors may see that their user base is on the very low end of the wealth scale and any negative PR they receive could weigh down their value tremendously. As there are far more people living in poverty than there are those who are well-off, the power of a large population to boycott or restrict transactions is not a scenario in which traders would want to be financially entangled. As the only way around this is to display their company as one that will help people advance in life from a financial standpoint without being greedy on their side, that is where the customer satisfaction will come. This is a very long-term investment coin as the infrastructure in third-world countries will still need to develop in order to compete and modernize with the majority of the world, but those that get in early will certainly reep the benefits. Ripple and Stellar could both become monopolies in their respective fields if their growth continues on both sides of the spectrum.
