Much of the success achieved by Stellar XLM and Ethereum ETH have come from their co-founders. Ethereum was the brainchild of Vitalik Buterin. He began it in 2014 when he was just 19 years and had his major break when Coinbase listed it in 2016. Jed McCaleb, the co-founder of Stellar has, on the other hand, founded a few more companies before settling on Stellar.
Jed started off by creating the infamous Mt GOX exchanges, it, however, got infamous after he sold it and the new owner changed the coding. It was then that it was hacked and millions were stolen. He then founded Ripple with the help of David Schwartz, Arthur Britto, and Chris Larsen. This would not last as he left the company after a disagreement with Chris Larsen. It is after this that he founded Stellar in 2014, essentially starting afresh at the same time with Vitalik. So, in terms of experience, Jed has a ton of it. As for Ethereum, it has found a business model that works for them and they have stuck with it.
Why Stellar Runs Circles Around Ethereum
Ethereum was specifically designed for creating smart contracts and it remains the most popular platform for this. However, Stellar has been proven to be better at this. For starters, a team from the National University of Singapore found out that Ethereum was more vulnerable to attacks and their smart contracts were easy to manipulate. According to experts, this is because the contracts are flexible and this makes them vulnerable.
Stellar has seized this opportunity and developed Stellar’s smart contracts. Although these smart contracts are less flexible, they are safer and more reliable than Ethereum’s. Stellar has also gone a step further to ensure security by ensuring that it uses authentication constraints and encryptions.
Stellar has been focusing on micro-payments which have driven more projects towards them. What Stellar does best is execute micro-payments, this makes it a better choice for thousands of startups. Unlike Ethereum which offers complete programming flexibility, Stellar lets you have only the features you want.
Stellar is pocket-friendly. A transaction on Stellar is a fraction of what it is on Ethereum, around 0.01%. One might think this means the network is slow, but it is actually Ethereum which has scalability issues. Stellar transactions will take seconds while Ethereum will take minutes. Ethereum which uses proof-of-work says it is working on proof-of-stake, this will make the network faster and make the blockchain energy efficient. While Vitalik’s team is working on that, Jed’s team has already solved that by employing a new concept, Byzantine Consensus. It is fast, reliable and energy-efficient.
One factor that truly differentiates Stellar and Ethereum is KYC/AML compliance. Startups that prefer to use a blockchain that is KYC/AML will have to use Stellar. Tokens built on the Stellar blockchain will only be traded between KYC/AML approved addresses. The blockchain also follows the established financial regulations, accounts proven to be owned by a terrorist are frozen. Ethereum ETH does not have these restrictions.
Stellar has built in a distributed exchange from which Stellar-issued tokens can be listed. This means after conducting an ICO on Stellar, startups do not have to look for an exchange in which to list their tokens. It also means that the tokens are tradable from the first day they are issued.
Stellar XLM is definitely doing a solid job and although it isn’t as widely adopted as Ethereum ETH right now, in the long run, it will be more popular than Ethereum. Currently, Ethereum has found a business model that is working for it. This makes it a better investment option for a short-term, but Stellar XLM is definitely the best investment option for a long position. It has every potential of becoming the best ICO platform.