WHICH IS BETTER?
Cardano vs Stellar
A Complete Comparison with All Pros/Cons for Cardano vs Stellar
Cardano (ADA) versus Stellar (XLM)? Which of the cryptocurrencies is a better investment? How are they different from each other? Which is expected to grow faster? We have received many questions about these cryptocurrencies so have written this comparison guide.
It’s not easy to understand the difference and choose between Cardano vs Stellar. Both Stellar Lumens and Cardano have massive potential to make it in cryptosphere. The great prospects of both blockchain projects make choosing between the two a daunting task for a potential crypto investor who wants to select the best token to add to their portfolio.
Which should you buy? Anyone desirous of doing a Cardano vs. Stellar comparison must begin with the knowledge that both are inspiring projects. However, to collect information, analyze it, and make a good investment decision is not as easy.
In this complete comparison guide, we will answer all your questions. Our guide will dwell on the expert advice of both digital assets, so you can have sufficient facts on which to base your decision. This commentary examines the similarities and differences that as an investor you can use as a basis for your investment decision.
In this guide show you the pros and cons of both coins and which one you should choose and reasons for your decision. Let’s begin by introducing Cardano! →
Top 3 Crypto Exchanges - January 2023
Welcome to CryptoRunner! I’m David Andersson, co-founder of this site.
We understand that cryptocurrencies can be confusing and frustrating. That’s why we are here to help you.
The Story of Cardano (ADA)
Experts have hailed Cardano (ADA) as a leading cryptocurrency in the market. Word has it that the decentralized public blockchain project is also working on a smart contract platform. These factors place Cardano at a vantage point to become an advanced protocol in the future. The Cardano team is said to be working on new regulated computing that will guarantee security by enabling enhanced financial inclusion through its open access.
The Cardano platform is fuelled by the ADA cryptocurrency whose primary objective is to provide a fast, safe and secure means of exchange that allows users to operate several smart contracts hassle-free. Cardano was developed by Japanese company Emurgo in partnership with IOHK in 2015 and ADA was released in 2017 as the first layer being pre-capped at 45 million coins.
Cardano has caught the attention of many organizations that use smart contracts; the most prominent one is a partnership between Cardano and the Ethiopian government for its AgriTech sector. At the moment, the future looks bright for Cardano.
Benefits of Cardano
Since we are interested in Cardano vs. Stellar with the aim of making a good investment, let’s consider the benefits of Cardano.
- Best of Two Worlds: Cardano has been the first peer-to-peer system operating on scientifically tested theories. ADA combines Bitcoin’s transactional properties with Ethereum’s Dapps and Smart contract systems.
- Smart Contract Language: The developers are keen on creating a unique smart contract language called Plutus that will feature smart contracts that can’t be changed without both parties’ consent.
- Secure Transactions: Cardano’s smart contract transactional processes are more secure than other cryptocurrencies because they are layered, thereby creating less room for tampering with data.
- Fully Decentralized: Cardano’s systems are decentralized, cannot be restricted to select individuals and the information is therefore permanently stored in a ledger.
All Dapps created on the Cardano platform use the ADA cryptocurrency as their primary token and use smart contracts to create a virtual interactive economy.
Pros and Cons of Cardano
As far as Stellar vs. Cardano goes, it’s safe to say that Cardano has a lot to bring to the table. However, like every good thing, there are some struggles you want to appreciate. Since it’s always good to begin on the right note, let’s look at Cardano’s positive characteristics first:
Pros & Cons with Cardano (Why Invest?)
Pros of Cardano
The Cardano blockchain is popular because of the following reasons:
1. Open-Source Code
Cardano’s open-source code is meant to ensure that cryptocurrencies can interact across blockchain networks. This objective is intended to promote interoperability and will support atomic swaps that make blockchain technology a collaborative affair.
2. A Reliable Team
Cardano is run by a credible and competent team consisting of Charles Hoskinson and Jeremy Wood; both guys were involved in the creation of the Ethereum blockchain. Together with Professor Aggelos Kiayias, they set up IOHK (Input Output Hong Kong), the company behind the Cardano project.
3. Double Layered Character
Cardano integrates two functionality layers in its blockchain making it more refined. The first, the settlement layer, records, and processes transactions while the second has functionalities like smart contracts. Apart from adding features, double layering enhances efficiency.
4. Energy efficient consensus protocol
Cardano uses Proof-of-Stake (PoS) to ensure mining blocks in the blockchain is energy efficient, making it an affordable cryptocurrency.
Cons of Cardano
It’s true that Cardano has many advantages but, well, there are a few disadvantages as well:
1. Centralization Fears
The proof-of-stake protocol makes mining easier, but there are fears about centralization as it allows only validators to choose which block to validate.
2. Security Vulnerability
Proof-of-stake creates a gap that makes double-spending transactions possible via forking blocks just before the transaction.
3. Unproven Programming Language
Cardano uses Plutus; a new and unique programming language without a proven use case, lack of a track record can be potentially problematic.
Should You Invest in Cardano / ADA?
The best cryptocurrency expert cannot give you a sure answer to that question. You need to compare cryptocurrencies and choose Cardano vs Stellar based on your own judgement.
We will base our advice on prevailing market trends and the known fundamentals of Cardano to tell whether it’s a good or bad investment. Cardano rose 1500 percent during the 2018 Bull Run before losing value like all other cryptocurrencies. However, ADA has solid fundamentals that include being backed by a strong team that is burning the midnight oil to improve the blockchain’s technology.
Cardano has good potential as a long-term investment because it has a more significant incentive than the market can currently handle. Other reasons ADA is good investment include:
- Its potential for decentralized applications
- It has a good market cap volume and supply
- The project has evolved and continues to develop out of research and scientific philosophies
- Backed by a good crypto community
Having dealt with the first part of our Cardano vs. Stellar debate, it is now time to look at the second side of the coin →
The Story of Stellar Lumens (XLM)
The main focus of the Stellar Lumens blockchain platform is assimilating the distributed ledger technology (DLT) into the current financial structure. The blockchain calls itself the future of banking was created to address existing gaps between the closed systems of contemporary financial markets.
Stellar adopted a bipartisan stance in its approach to building an international economic platform. The platform offers solutions to centralized baking systems besides providing low-cost financial services to the under-banked or unbanked.
Otherwise called XLM in short, is a digital asset of an open-source payment infrastructure called Stellar. Founded at the beginning of 2014 by Joyce Kim and Jed McCaleb, Stellar started as a hard fork of the Ripple protocol. The founders made a few critical changes to the consensus code they named the fork “Stellar Core.” The Stellar Development Foundation’s aim for creating the platform was to create a system to “connect people, payment systems and banks.”
Stellar (XLM) was created to link fiat currencies to enable instant exchanging where the buyer or seller doesn’t have to touch the crypto itself. The Stellar system is unique because the currency plays an anti-spamming role where the minuscule fee becomes a preventive measure barring nefarious users from flooding the network. Lumens also play a security role by eliminating large-scale transactional attacks.
Benefits of Stellar Lumens
No single individual controls Stellar, since being decentralized. Anyone can easily join the network and become a node to run their software called Stellar Core.
2. Distributed Ledger
Stellar’s distributed ledger records the details of every account and transaction that happens within the network. All servers and nodes host their copies of the ledger which is synced to all other nodes in the system; nodes validate transactions and maintain records on the ledger.
3. Stellar Consensus Protocol
The Stellar platform has a consensus mechanism that facilitates the validation and synchronization of transactional data across all nodes within the network. The Stellar Consensus Protocol (SCP) takes 2-5 seconds to validate transactions via Federated Byzantine Agreement (FBA) algorithm.
4. Distributed Exchange
The Stellar network enables exchanging cryptocurrencies and fiat, besides, to cross-currency transactions between both. Users can place their offers on the ledger, and the exchange arranges the orders in separate order books for every currency.
5. Multi-currency Transactions
The Stellar network facilitates cross-currency transactions, meaning a user can send payments in their desired currency and the payee receives it in their own desired currency, whether it’s in fiat or crypto.
Anchors in the Stellar transaction process play the role of a bridge connecting the network to other currencies. The entities that include banks and payment processors take the deposits and issue credits to corresponding accounts.
As we compare Stellar vs. Cardano, it is proper that we now outline and explain the different pros and cons of the XLM project:
Pros & Cons with Stellar (Why Invest?)
Pros of Stellar
Stellar looks attractive for the potential investor and could have massive potential if banks would substitute their traditional methods for international transfers with Stellar Lumens’ technology. This would help to skyrocket the price of XLM as significant amounts of money would be involved.
When compared to projects like Ripple, which serves a similar purpose, anyone can validate XLM network transactions which are restricted in XRP. The decentralization aspect of Stellar reinforces the structure that cryptocurrencies seek to defeat.
Several multinational institutions, led by IBM, have already embraced Stellar Lumens technology for their cross-border remittances. With such market leaders appreciating the network the future looks bright.
Cons of Stellar
Competition with Ripple
Since Stellar forked from Ripple, considerable controversy exists among users on which coin is legitimate and which one is a fork. Ripple seems to be miles ahead of Stellar, something that can be attributed to the media coverage the former receives.
Lack of Stability
By being a decentralized currency and trying to cater to banks and financial institutions that would prefer a more centralized structure, XLM may appear less stable to such institutions, which is not necessarily true.
Stellar is a latecomer in its field, and as far as cryptocurrencies are concerned, the early comers easily take a sizeable chunk of the market with the rest playing catch-up.
Should You Invest in Stellar / XLM?
One thing you want to remember when making a Cardano vs. Stellar contrast is that while XLM is not yet a giant crypto asset, it has a bright future in terms of investment. The reason XLM is an excellent long-term investment includes the following:
Strong technology model
As per Weiss Ratings, Stellar is among the four leading cryptocurrencies for long-term investment based on several metrics among its technological model. This gives the crypto a high-performance ability, fast speeds, and high scalability.
Enables cross-border payments
Stellar has purposed to use its high transaction speeds to solve the challenge of slow and expensive cross-border payments. This will place it at the same league with its main competitor XRP, with the potential to receive similar adoption levels shortly.
The Lightning Network
The other reason Stellar XLM should be on your investment radar is its upcoming Lightning Network launch. Once it goes live, it will boost the cryptocurrency by making for fast and secure payments as it reduces transaction volumes by 50 percent.
Stellar’s robust framework gives it the potential to solve problems facing the cryptocurrency community of users and investors and could become a profitable investment if adopted by many users.
Cardano vs Stellar: Which Is Better?
As we conclude our Cardano vs. Stellar comparison guide, you must have realized that deciding between the two is not as easy as choosing between apples and oranges. Cardano (ADA) is one of the best smart contract platforms while Stellar Lumens (XLM) is a fantastic platform for sending money abroad.
Cryptocurrency predictions are good but since they are just that, predictions based on snapshots and fundamentals that are always changing, you want to take them with a pinch of salt. Most Altcoins are predicted to recover from the 2018 bearish market if everything works as expected.
Seeing that both Stellar and Cardano have huge potentials, there are also risks. As a rule of the thumb, you should never risk more than you are willing to lose.
Which Should You Buy?
There is no straight answer to that question. You need to make that decision yourself. We hope this was enough information to compare these cryptocurrencies. If nothing else, you can buy both Cardano (ADA) and Stellar (XLM) to build a diversified long-term portfolio.
Which one will you buy? Let us know in the comments! Below you will find the best exchange for buying both Cardano and Stellar →
Frequently Asked Questions
Is your question not answered here? Let us know!
Cardano SL refers to settlement layer, which is the cryptographic currency developed by IOHK.
Stellar doesn’t have a mining based digital currency. The developers created 100 billion stellar tokens with inflation remaining as the only other XLM creation mechanism.
Do you want to buy Cardano instantly with your debit/credit card? In that case, use the cryptocurrency exchange we recommend above. It’s the fastest and easiest way to buy Cardano →
Do you want to buy Stellar instantly with your debit/credit card? In that case, use the cryptocurrency exchange we recommend above. It’s the fastest and easiest way to buy Stellar →