What Is Stellar XLM: A Complete Guide To The Stellar Currency
Have you ever heard about Stellar Lumens? If not, you definitely should, as it is one of the most promising currencies in the crypto market nowadays. Why is Stellar so special? This cryptocurrency is more than a traditional or digital currency: it is a part of a unique payment system. Plus, Stellar constantly works to improve its products and services, forging various partnerships and developing cutting edge tech.
The aim of the Stellar project is to make money transactions as easy as sending emails. They are creating a free, simple, and transparent platform that allows everyone to build inexpensive financial apps. However, Stellar isn’t alone in the industry, as there are numerous ventures using the same technology.
So, how can Stellar really compete? And what is important for us — is it a good idea to trade and use Stellar (XLM)?
In this Stellar (XLM) review, we’ll give you everything that you should know about the Stellar project and Lumens. Plus, we’ll also analyze the potential of XLM and try to answer the question of whether we should invest in it or not.
What is Stellar?
Launched in 2014, the Stellar project was designed to bridge the gap between the traditional financial and crypto worlds. It was a challenging task, but it seems Stellar has achieved some impressive results. Since 2014, the Stellar coins have taken on a bunch of partnerships with several well-known companies not only in finance but also in tech. The list of partners includes some big corporations such as Stripe, IBM, and Deloitte. Plus, Stellar is cooperating with numerous payment processors throughout the world. No matter where you are — in Asia or Europe, Stellar can be useful for you.
Stellar’s ambitious plan is to become one of the best digital payment platforms in the world. Therefore, they have built a system that is able to bring together people, banks, and payment applications. The Stellar network allows you to send money to anyone, no matter where they are. One of the advantages of Stellar is that the transactions are fast, easy, and safe. Plus, it is necessary to mention a transaction fee: it is super low. Most transactions cost less than a penny. This fact alone may put traditional payment solutions out of the game.
Some experts state that the Stellar coins were created as a hard fork from the Ripple technology. This theory is quite plausible, as Jed McCaleb who started the Stellar platform also was a founder of Ripple. At the same time, McCaleb has written himself that the two cryptocurrency projects use different codes, and Stellar ISN’T a fork from Ripple. We think that we should believe what he said. Whether it is true or not, let’s move to other aspects of the Stellar project. Anyway, the past won’t tell you anything about the future of Stellar cryptocurrency.
What is XLM?
Even though the Stellar platform was created to handle various currencies and their digital representations, they also issued their own native cryptocurrency called Stellar Lumens or XLM. Actually, if you want to use Stellar, you need to have some Stellar Lumens to become a member of the network. This requirement is expected to prevent the platform from becoming filled with spam and fakes. But why did they create unique crypto for this task? In fact, it is quite an obvious move as Stellar wants to remain free from any specific currency in general. For instance, if Stellar decided to use USD, and required you to have a particular number of dollars then the network would be somewhat connected to the position of USD in the world, or, at a maximum, the services would be limited to the US area. This is a situation that founders wanted to avoid at any cost.
Stellar Lumens may look like an ordinary cryptocurrency, but there is a huge difference between XLM and, for example, Bitcoin. In contrast to most cryptocurrencies, Stellar Lumens don’t need to mine blocks of transactions. Since there is no mining in the network, participants don’t receive any awards for validating the blockchain. This technology is in stark contrast to the majority of digital coins, including the most known ones.
Stellar just decided it was better to release 100 billion XLM during the network’s launch. Since then, the number of Stellar increases by 1% annually for about six years.
Then, the team changed its approach. Starting from October 2019, Stellar decided to lower the supply of XLM. They believed this measure was more conducive to their plans. As a result, they decreased the amount of XLM down to 50 billion. Moreover, there are currently no plans to release more Stellar Lumens in the future.
There are 20 billion XLM in the market now, plus 30 billion are held by the foundation itself. These funds are used for the development of the XLM system. They also use their ‘savings’ for marketing purposes and when they need to partnership with other ventures.
If we take a close look at Stellar’s features, it’s easy to say that the network is an interesting project with a bright future ahead of it. Stellar combined the advantages of blockchain technology with the capabilities of traditional payment systems.
How can you use Stellar (XLM)?
You can use Stellar Lumens as other cryptocurrencies. XLM can act as Bitcoin’s alternative but with extra features, as it is much faster and more scalable coins that don’t require mining. Moreover, Stellar Lumens can be used for transnational financial operations at ease. You can be anywhere in the world and transfer funds in just 5 seconds.
That’s why Stellar Lumens are perfect for cross-border transactions, including overseas operations. Easy, inexpensive, and quick financial operations from your smartphone, computer, or tablet can be especially helpful if you are far from traditional banks but have access to the Internet.
There is another reason to use Stellar Lumens — the cost of transactions. You won’t have to pay expensive fees from banks or payment companies like Western Union. In other words, if you send or receive funds from someone who lives abroad, you won’t have to pay extra fees for transactions. When it comes to XLM, you will pay only around 0.00001 XLM, which is less than $.01 right now.
In addition to all these benefits, Stellar also offers an exchange where you can buy or sell other digital coins such as Bitcoin, Ethereum, or Repocoin. And, of course, you can trade Stellar Lumens here. Let’s imagine you want to exchange XLM cryptocurrency to USD. You can easily do it on the Stellar platform.
What will happen to Stellar Lumens in the future?
When it comes to the perspectives of Stellar cryptocurrency, it is hard to predict its future. However, Stellar Lumens are widely used for various purposes right now. XLM is especially useful in the South Pacific region. It is anticipated to be used for 60% of transnational transactions in the retail industry. Nowadays, Stellar and IBM act as banking infrastructure in the most isolated areas of the whole world. Many people from the distant edges of the globe still don’t have access to financial services, and Stellar can significantly improve the situation. Furthermore, you can use Stellar with little or no money.
Are Stellar Lumens safe?
Stellar Lumens are completely secure but similar to other cryptocurrencies there are some risks when you use them. The Stellar platform and XLM have never experienced any serious issues or hacks. However, there was one situation when Stellar Lumens were taken from digital wallets, but we can’t blame Stellar for it. The problem was with a pitfall in the wallet, not in Stellar's infrastructure. We are talking about BlackWallet.co, which was attacked by hackers. That time the harmful code was injected into accounts with more than 20 XLM.
Overall, Stellar is worth your attention. This cryptocurrency has received the least amount of negative feedback, which means that it is pretty good. Stellar has a professional team behind it and a wide array of advantages over similar ventures. Especially if we take into account that IBM is already using the digital coins in real-world applications in the South Pacific. We also have simple advice for you. If you decide that you need to buy Stellar, make sure to use only reliable exchange services!