Ethereum has long been thought of as the best platform for development and issuing tokens. But more people are starting to see Stellar as a viable alternative. These are excellent platforms for developers, but each has its respective differences. Each is ideal for certain entrepreneurs. This article explores the four most significant differences between Stellar and Ethereum. After reading this, readers will have a clearer picture of what these coins offer.
Blockchain Development vs. Decentralized Payment Platform
Ethereum is a platform designed for creating smart contracts and decentralized apps. Stellar is a multi-currency payment platform. Additionally, Stellar can be used for making simple and straightforward applications and smart contracts. Stellar’s advantage is that its simpler programs are faster, which gives it a significant edge. However, despite being slower, Ethereum’s platform allows developers to create more complex programs. Developers using Ethereum can create whatever they want, within reason, while Stellar is more limited.
Developers who need a platform for complex programs that can carry out many functions should consider Ethereum. As for Stellar, it is ideally suited for developers who need a fast and dependable payment option.
Which Is More Secure of the Two?
Etereum is one of the top choices for people who want to develop smart contracts and decentralized applications. However, its growth has put a target on its back. As a rule, the larger the network is, the easier it is for people to hack. Stellar’s networks are not nearly as extensive as Ethereum’s. Additionally, Stellar has several security features that make it less easy to hack. These features include the ability of businesses to choose nodes for transaction validations, batching, and more. Security token offerings (STOs) like Stellar represent tangible assets. So it is vital for people using tokens for payment processes to get the most secure platform possible.
Stellar Is Faster Than Ethereum
Many of these platforms are notoriously slow. It is a significant obstacle to those who want tokens and blockchain platforms to be more prevalent. Ethereum’s platform is more complex, meaning it can take minutes for a transaction to be completed. This speed is much better than other platforms, but it is still a long time to wait. However, Stellar’s processing time is around five seconds. Additionally, Stellar users do not have to pay fees to third parties for transactions. You can also exchange these currencies on Godex — a decentralized anonymous exchange that offers a favorable 1 ETH to XLM rate.
Stellar, Ethereum, and Compliance
Compliance is another issue to take into consideration, especially for people in the United States. They have to deal with the Securities and Exchange Commission and other regulatory and law enforcement agencies. KYC and AML laws are stringent in the United States, Great Britain, and several other countries. Non-compliance can lead to serious legal trouble. It is crucial to find a token with built-in protections for those who want to remain compliant and avoid problems with regulatory agencies and law enforcement.
Stellar is compliant with KYC and AML rules; in fact, users cannot trade with someone who does not have an approved address. Additionally, it can freeze accounts that are not compliant. Ethereum does not have these features.
Liquidity is not a problem for Ethereum because most developers use it to create customized ERC20 tokens. There are many compatible wallets and exchanges where they can be traded and secured out there. However, each year a seemingly infinite number of tokens are issued. They are listed on numerous exchanges, meaning they can be challenging for new investors to trade.
Stellar got around this problem by structuring itself so that its users do not have to use other exchanges. Instead, Stellar has its own exchange where tokens can be traded. The problem is that its exchange does not have many projects, so there is little activity and trading volume. Increasing liquidity depends on Stellar’s progress in attracting customers.
Which Is Better?
None is better than the other in principle. It all depends on the person who is using the platform. Stellar is ideal for people who want something fast, secure, intuitive, and regulatory compliant. Its transaction speeds are more immediate. This allows users to complete transactions in seconds rather than minutes or hours. Additionally, its intuitiveness gives it a layer of convenience Ethereum lacks, not to mention its various security protocols. Finally, its built-in KYC/AML protocols make it ideal for people who want to avoid legal trouble.
Ethereum is a more complex platform that gives developers more freedom to create and expand various programs and applications. Stellar is mostly, if not entirely, limited to payment processing. Additionally, Ethereum is much more liquid than its competitor.
Entrepreneurs and developers should create a list of things they want in a token and choose accordingly. To summarize, Ethereum is for those who need to develop complex programs. Stellar is ideal for streamlined and KYC/AML-compliant payment processing.
Stay updated with all the insights.
Navigate news, 1 email day.
Subscribe to Qrius