Bittime - Stellar (XLM) Vs Ethereum (ETH) is a comparison between two leading blockchains. Learn the advantages, disadvantages, and key features of each to choose the best!
DTwo big names that are often compared in the crypto world are Stellar (XLM) And Ethereum (ETH). These two platforms have different approaches, with the main goal of each targeting unique solutions for its users.
Ethereum is widely known as a platform for building decentralized applications (dApps) and smart contracts. Meanwhile, Stellar focuses on fast and cheap cross-border transactions.
For investors and blockchain enthusiasts, the comparison between Stellar vs Ethereum is not just about price, but also their technical features and future potential. Check out a comprehensive comparison between the two in this article.
What is Stellar (XLM)?
Sumber: MakeUseOf
Stellar (XLM) is an open source blockchain network launched in 2014 with the aim of facilitating fast and cheap transfer of value. You can transact in both fiat currency and digital assets.
Stellar was founded by Jed McCaleb, co-founder of Ripple, with the aim of solving the problem of slow and expensive cross-border transfers.
Unlike many other cryptocurrencies, Stellar Lumens (XLM) is not an asset used for speculation. Instead, these tokens are used to facilitate transactions within the Stellar network itself.
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Key Features of Stellar (XLM)
1. Fast and Cheap Transactions:
One of Stellar's key features is its speed and extremely low transaction fees. Each transaction on the Stellar network can be processed in less than 5 seconds, with very low transaction fees (only 0.00001 XLM per transaction).
2. Decentralization and Security:
Stellar uses Stellar Consensus Protocol (SCP) which is different from other consensus mechanisms such as Proof of Work (PoW) and Proof of Stake (PoS). SCP allows transactions to be carried out securely without the need for miners, making the network more efficient.
3. Multi-Currency Network:
Stellar supports the transfer of various currencies and digital assets, including fiat currencies (such as US dollars and euros). This network allows automatic exchange between various currencies at very low fees.
4. Open Access for Developers:
Stellar allows developers to create and launch their own tokens, which can represent a wide variety of assets, from cryptocurrencies to loyalty points or even physical goods.
Pros and Cons of Stellar (XLM)
Advantages:
- Low Transaction Fees: Stellar is ideal for small or cross-border transactions, thanks to its almost non-existent transaction fees.
- High speed: Stellar transaction speeds can reach 5 seconds, much faster than many other blockchains.
- Decentralization: The Stellar Network does not rely on third parties or financial institutions, making it a more open and democratic option.
Disadvantages:
- Feature Limitations: Although Stellar is very efficient for transactions, it is less flexible than Ethereum when it comes to developing decentralized applications or smart contracts.
- Token Inflation: Although the total amount of XLM is limited, new tokens were still issued every year at an inflation rate of 1% until 2019, which slightly increased the token supply.
Read also: $XLM Price Prediction Today, December 18: Reasons for 23% Rise
What is Ethereum (ETH)?
Ethereum (ETH) is a more complex blockchain platform and is very famous in the cryptocurrency world. Ethereum was first proposed by Vitalik Buterin in 2013 and launched in 2015.
Ethereum is not only used to transfer value (like Bitcoin), but also to create decentralized applications (dApps) and run them smart contracts. Smart contracts are codes that allow transactions and agreements between two parties to be executed automatically without intermediaries.
Key Features of Ethereum (ETH)
1. Smart Contracts:
Ethereum is a pioneer in the use of smart contracts that allow two parties to carry out transactions without the need for a third party. For example, in buying and selling transactions, smart contracts can automate the transfer of money and digital assets based on pre-determined agreements.
2. dApps (Decentralized Applications):
Ethereum is home to thousands of decentralized applications (dApps), which provide broader functionality compared to other blockchain platforms. These dApps range from decentralized finance (DeFi) to blockchain-based games and NFTs.
3. Ethereum Virtual Machine (EVM):
The Ethereum Virtual Machine allows developers to run applications and smart contracts in a secure and isolated environment, without the risk of disrupting the Ethereum mainnet.
4. Ethereum 2.0:
Ethereum has just completed the transition to Ethereum 2.0, which uses consensus Proof of Stake (PoS) replace the system Proof of Work (PoW) to increase efficiency and reduce energy consumption.
Advantages and Disadvantages of Ethereum (ETH)
Advantages:
- Wide Ecosystem: Ethereum has a vast ecosystem with thousands of dApps built on top of it, creating a highly liquid market and many opportunities for developers.
- Innovative and Flexible: With smart contracts and EVM capabilities, Ethereum enables the creation of a very diverse and sophisticated blockchain application.
- Future Scalability: With Ethereum 2.0, Ethereum is looking to improve scalability and reduce transaction fees, which could make it more efficient in the long run.
Disadvantages:
- High Transaction Fees: One of Ethereum's biggest problems is the high transaction fees (gas fees), especially when the network is busy. Although this will decrease with Ethereum 2.0, transaction fees remain prohibitive for some users.
- Slow Transaction Speed: Ethereum can only process around 10 to 15 transactions per second, much slower compared to Stellar which can complete transactions in seconds.
Differences between Stellar (XLM) Vs Ethereum (ETH)
| Aspect | Stellar (XLM) | Ethereum (ETH) |
| The main purpose | Fast and cheap transactions, especially for cross-border payments | A platform to create dApps and smart contracts |
| Transaction Speed | 5 seconds per transaction | 10-15 seconds per transaction |
| Transaction Fees | Very low (0.00001 XLM) | Depends on network (can be over $100 at peak) |
| Model Consensus | Stellar Consensus Protocol (SCP) | Proof of Stake (PoS) pada Ethereum 2.0 |
| Usage | Cross-border payments, value token creation | Development of dApps, smart contracts, and DeFi |
| Total Supply | 50 billion XLM | Unlimited, but with controlled supply via staking |
| Smart Contracts | There isn't any | Yes, it is very flexible and can be used for a variety of applications |
Read also: Bitcoin $108K: ATH Doubles in 24 Hours!
Stellar (XLM) Vs Ethereum (ETH), Which is Better?
Sumber: Coinexams
Choice between Stellar (XLM) And Ethereum (ETH) It really depends on your needs and goals. If you are looking for a fast, cheap, and efficient platform for cross-border transactions or micropayments, Stellar is a better choice.
With low fees and very high transaction speeds, Stellar is an ideal solution for transferring various types of assets.
On the other hand, if you are interested in developing decentralized applications or leveraging smart contracts for various use cases, Ethereum is a more suitable platform.
Ethereum has a larger ecosystem and more support from the developer community, although high transaction fees and slower speeds can be a challenge.
Both platforms have their strengths and weaknesses, and the decision to choose between Stellar and Ethereum depends on what is more important to you: transaction speed and costs, or the ability to develop complex decentralized applications.
FAQ
Why are Stellar Smart Contracts considered limited?
Stellar, unlike Ethereum, is only capable of running a minimal set of operators in a variety of situations and does not have a Turing complete language for writing smart contracts. A Stellar smart contract (SSC) is a collection of related transactions carried out under various constraints.
Does Stellar run on Ethereum?
No, Stellar smart contracts are executed on a separate proprietary blockchain.
Is Stellar Lumens worth buying?
These cryptocurrencies are invaluable as a means of cross-border storage and payments. If you are looking for an option to make a profit, consider other altcoins, as the ROI of Stellars is relatively low.
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Reference
Forbes, Stellar Versus Ethereum: Four Key Differences To Know, accessed December 18, 2024.
Coinexams, Ethereum vs. Stellar, accessed December 18, 2024.
Owner Wallet, Stellar vs. Ethereum: Here’s What You Need to Know | OWNR Wallet, accessed December 18, 2024.
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