Detecting differences between XML documents is one of most important research topics for XML. Since XML documents are generally considered to be organized in a tree structure, most previous research has attempted to detect differences using tree-matching algorithms. However, most tree-matching algorithms have inadequate performance owing to limitations in terms of the execution time, optimality and scalability. This study proposes a stream-based difference detection method in which an XML binary encoding algorithm is used to provide improved performance relative to that of previous tree-matching algorithms. A tree-structured analysis of XML is not essential in order to detect differences. We use a D-Path algorithm that has an optimal result quality for difference detection between two streams and has a lower time complexity than tree-based methods. We then modify the existing XML binary encoding method to tokenize the stream and the algorithm in order to support more operations than D-Path algorithm does. The experimental results reveal greater efficiency for the proposed method relative to tree-based methods. The execution time is at least 4 times faster than state-of-the-art tree-based methods. In addition, the scalability is much more efficient.