Stellar v. Ripple: Understanding the Differences

[This was originally posted four months ago. Based on recent articles published on Bitcoinest (https://bitcoinist.com/ripple-vs-stellar-coin-will-win/) and Cryptocurrency News (https://cryptocurrencynews.com/daily-news/crypto-news/stellar-xlm-vs-ripple-xrp-who-reigns-supreme/), I have republished.]

As of the time of writing the market cap of Ripple sits at $118B, while Stellar Lumens sit at $13B. Both have seen tremendous growth in market cap over the past 20 days. In fact, both cryptocurrencies were created by Jeb McCade.

This begs the question: why is there such a huge discrepancy? Aren't they both used to operate underlying payment processing solutions? The root of the answer lies in the business models of the respective companies.

Ripple
The Company
According to its website, "Ripple enables banks to increase efficiency in their existing payment processes and create differentiated products and services for their customers."

It touts the following benefits for its payment processing solutions, which include retail remittance and corporate disbursement use cases:

Real-time payments with no settlement risk | Using Ripple’s solution, banks can coordinate funds movement across multiple ledgers to remove all settlement risk and minimize delays in the payment process. Having global reach through many nostro accounts is no longer necessary.
Flexible liquidity provisioning | Expand reach to new corridors with Ripple through more efficient liquidity sourcing. Either leverage existing nostro accounts for high-volume corridors that have competitive FX rates or utilize a marketplace of third-party liquidity providers.
Lower operational costs | While traditional processing costs - With Ripple’s bidirectional messaging, banks can validate transactions before funds are transferred and confirm delivery of funds, ensuring high Straight-Through Processing rates, low returns and negligible tracking and reconciliation effort.
The Currency
Ripple (XRP) is the digital currency and related infrastructure that can be used to power the Ripple payments processing solution.

Stellar Lumens
The Company (Stellar)
The Stellar network refers to the technology that processes financial transactions. The technology is open source, distributed, and community owned.

Stellar.org is the nonprofit organization that contributes to the development of tools and social good initiatives around the Stellar network and financial inclusion. Employees contribute code to the Stellar network, but the technology is independent of the organization.

According to its website, "Stellar.org connects people to low-cost financial services to fight poverty and develop individual potential." Based on its mission, its classified as a non-profit organization.

Stellar covers operational costs in several ways:

5% of the initial lumens are set aside for operational costs.
Stellar.org accepts tax-deductible donations from the public.
The Currency (Lumens, or STR/XLM)
According to its website:

Lumens are the native asset of the Stellar network. Native means that lumens are built into the network. Asset is how the network refers to an item of value that is stored on the ledger. One lumen is a unit of digital currency, like a bitcoin. While you can’t hold a lumen in your hand, they are essential to the Stellar network—they contribute to the ability to move money around the world and to conduct transactions between different currencies quickly and securely.

Conclusion
In short, the use cases for XRP surround profit-generating, payment processing solutions for banks, acquirers, and international corporations, while XLM focuses on non-profit distribution of wealth to the masses on an international level. Ripple is about saving costs and increasing efficiency; Stellar is about increasing access. While the two currencies may seem similar to the uninformed trader, it appears there is a logical reason for the discrepancy in market cap. The only question is, should the spread be that wide?