What is Stellar Lumen (XLM)?
Future of XLM Cryptocurrency and know how to buy XLM

What is Stellar Lumen (XLM)?

Stellar Lumens (XLM): The Basics

  1. Stellar is a decentralized payment network that allows cross-asset value transfer by using a distributed ledger on the blockchain. The Stellar project intends to provide a faster, cheaper, and secure platform for money transfer that helps to fill the gap between cryptocurrencies and traditional payment networks. Stellar is managed by a non-profit organization, named Stellar Development Foundation.
  2. Lumen (previously “Stellar”) is the digital currency of Stellar network. It is represented by its ticker “XLM” in the global market. Lumen is used in multiple ways across the Stellar network. Users are required to keep a minimum balance of 0.5 lumens in their accounts in order to help the network to identify inactive accounts. Lumen is also needed to pay a minimal transaction fee of 0.00001 lumens.

Stellar Development

  1. Stellar projected was started by Jed McCaleb (co-founder and Ex CTO of Ripple) and Joyce Kim (former lawyer) in 2014 with the creation of a website "Secret Bitcoin Project", which served to recruit alpha testers for the project.
  2. In July 2014, the Stellar Development Foundation was established with the collaboration of Patrick Collison (CEO of Stripe), which also secured $3 million as an initial investment for the project. This also marked the official launch of Stellar platform.
  3. In April 2015, the Stellar Development Foundation upgraded the Stellar network with the introduction of a new consensus protocol. The upgrade became live during November in same year. With this upgrade, the token name (Stellar) was changed to “Lumen”.

 

#2 - What are the benefits of Stellar?

Stellar Technology & Features

Money flow in the Stellar Network, Image source: stellar.org

  1. Decentralized: Similar to all cryptocurrencies, Stellar network also leverages blockchain for decentralized advantages that come with blockchain. The network operates on several computers or servers, called nodes, which are connected via internet. These nodes can be anyone, from individuals to organisational entities. Since, whole network is decentralized, it is not controlled by a single party and anyone can join the network to become a node by running a software, called Stellar Core.
  2. Distributed Ledger: A decentralized ledger is the key benefit of blockchain technology. Stellar network also features a distributed ledger that serves to record all the details about every transaction and account that exists of happens in the network. Every node or server in the network hosts its own copy of the ledger that is in sync with all the other nodes across the network. Node helps to validate the transaction and maintaining records on the ledger.
  3. Stellar Consensus Protocol (SCP): Consensus is a process in which, all parties are required to reach an ambiguous agreement over a piece of data or information. Stellar network requires a consensus mechanism to facilitate the synchronization and validation of transactional data across all nodes in the network. In the Stellar network consensus is reached by leveraging Stellar Consensus Protocol (SCP) in 2-5 seconds. SCP uses Federated Byzantine Agreement (FBA) algorithm, which was created by David Mazières, professor at Stanford University.
  4. Distributed Exchange: The Stellar network allows users to place currency exchange offers on the ledger. These offers act as a commitment for exchanging currencies at the rates determined by the users. These exchange offers are arranged in orderbooks with a separate orderbook for each currency. Users can view these orderbooks to have a look on exchange trends followed by currencies. Stellar networks allows exchanging of both fiat and cryptocurrencies, which also include cross transactions between both currency types.
  5. Multi-currency transactions: A key advantage of Stellar network is its ability to facilitate cross-currency transactions, which means a payer can send payments in his desired currency while the payee can receive the same payment in his desired currency. Users have the liberty to choose either fiat currencies or cryptocurrencies. These transaction can take place in three wars:
    1. – Conversion through an offer
    2. – By using lumens as an intermediary currency
    3. – Through a chain of conversions
  6. Anchors: Anchors play an important role in the transaction process. They function as a bridge that connects Stellar network and currencies. Anchors are entities (banks and payment processors) that are responsible for taking deposits and issuing credits to the corresponding accounts. Users are required to trust the anchors to honor their deposits and withdrawals of credits issued by the anchors.

 

#3 - How to buy and store Stellar Lumen?

How to Buy Lumen?

The Stellar Development Foundation minted its entire supply of 100 billion XLM tokens at the beginning; thus new Lumen tokens cannot be created via XLM mining. An Inflation rate of 1% p.a. Is set on total token supply. However, users can earn Lumens for their services as a node in the Stellar network. Stellar Lumens can also be obtained by reading on exchanges.

  1. Stellar cryptocurrency is available for trading on several leading cryptocurrency exchanges, such as Huobi, OKEx, Upbit, Binance, Kucoin, HitBTC, Bitfinex, HitBTC, Gate.io, Bittrex, etc.
  2. Since, Stellar Lumens is available on so many cryptocurrencies, finding a best rate can be a time consuming task. CoinSwitch is an ideal solution for this problem.
  3. CoinSwitch is the largest cryptocurrency trading platform, which can allow trading of more than 350 cryptocurrencies with over 45000 possible pairs. Users can compare XLM rates and trade across all leading exchanges at one place. CoinSwitch aggregates live price and performance charts of cryptocurrencies, enabling users to make an informed decision. You can buy Stellar with Bitcoin from CoinSwitch at the best rate.

Lumen (XLM) Storage

There are several wallets listed on stellar.org for storing Lumens. These wallets are available on multiple platforms. Some of these wallets are community-driven while some are provided by private groups. Below is the list of some wallet options:

  • BlockEQ
  • Lobstr
  • Interstellar
  • StellarTerm
  • Stellarport
  • Stargazer
  • Ledger Nano S

 

#4 - What is the future of Stellar Lumen?

Trend So Far

Also Read: Complete Analysis of Stellar Lumen | Live Stellar Lumen (XLM) Price Charts And Predictions

  1. As of August 2018, Stellar Lumens holds a market cap of more than $4.3 billion, which makes it the sixth largest cryptocurrency by market capitalization in the global cryptocurrency market. There is a total supply of 104,184,649,455 XLM tokens out of which 18,770,588,637 tokens are in circulation.
  2. On August 5, 2014, Stellar went live in the cryptocurrency market, for a price of $0.002976. For most of its existence, Stellar prices kept fluctuating under $0.009 mark; however this changed on May 05, 2017, when the price reached at $0.010 from $0.06.
  3. Cryptocurrencies witnessed an exponential price rise in January 2018, Stellar Lumen also followed this trend. During the month, Lumen price rose to its all-time high of $0.938. After January 2018, Stellar lumen has been more volatile than usual. As of August 2018, its price is floating near $0.23 mark.

Price History in USD

Date

Open

High

Low

Close

Volume

Market Cap

Aug 06, 2018

0.245017

0.248388

0.232036

0.234705

52,688,700

4,599,032,137

Feb 01, 2018

0.540834

0.542970

0.429680

0.456455

172,407,008

9,967,476,736

Jul 01, 2017

0.026959

0.028074

0.023388

0.024466

9,301,920

277,895,072

Dec 01, 2016

0.001629

0.001672

0.001543

0.001619

60,747

11,164,200

May 01, 2016

0.001852

0.001906

0.001841

0.001883

6,884

10,158,800

Oct 01, 2015

0.001984

0.002253

0.001920

0.002224

12,894

9,596,740

Mar 01, 2015

0.003047

0.003052

0.002781

0.002781

17,782

11,020,100

Aug 05, 2014

0.002976

0.003387

0.002349

0.002440

30,316

772,597

Future Trends

Stellar Lumens has shown a rapid growth since May 2017 compared to its growth rate in the early years. Market analysts forecast Lumens as a profitable long-term investment. In five years the price is predicted to have nearly 376.05% increase over its price in August 2018. However, given the market volatility in the cryptocurrency market, these prediction could differ in the future. 

 

#5 - How is Stellar Lumen different from other cryptocurrencies?

  1. Stellar is often compared with Ripple and for a good reason because firstly, Stellar is forked from the Ripple project and secondly, both serve the same function of a cross-border payment network. However, both Stellar and Ripple are targeting different elements in a payment network. Ripple is specifically connecting banks and payment processors while Stellar is trying to increase financial inclusion by including unbanked.
  2. Another difference between Stellar and Ripple is the business model of both platforms. Stellar Development Foundation is a non-profit organisation. This is not the case with Ripple, which is a for-profit organisation and also Ripple is considered more centralized because it need to integrate with several centralized financial institution.
  3. The Stellar Consensus Protocol (SCP) is a unique consensus mechanism that differentiate Stellar Lumens from all other cryptocurrencies, e.g. Bitcoin and Ethereum use proof-of-work (PoW), Ripple uses its own consensus RPCA, which is a proof-of-correctness based consensus.

 

#6 - Should you invest in Stellar Lumen?

  1. Although Stellar showed a slow growth initially, It has gained a lot of attention due to its recent growth. It has already proven itself as a profitable investment and its position on the global cryptocurrency market is the proof of its popularity among people.
  2. Over time, Stellar has gained several key partnerships across the globe. As a payment platform, it has made a name in the industry. Some of its prominent partnership are:
    1. – Software giant IBM
    2. – ICICI bank, India’s largest private bank based on consolidated assets
    3. – Deloitte, a leading global firm for finance and technology
    4. – KlickEx, an award-winning platform that facilitates regional cross-border payments.
  3. Cryptocurrencies come with both high risks and high return on investment. For now, Stellar seems to have the potential for growth in the future, which is due to its increased adoption in the real world, enabling a rise in the price of Lumen. Stellar network is continuously working towards expanding its reach further into the industry.
  4. However, cryptocurrencies are also subject to high volatility, so it is difficult to make certain predictions about any cryptocurrency, Stellar included. Users should do their own research.

Frequently Asked Questions (FAQs)

Q. What are Stellar Lumens used for?

A. Stellar is a fork of XRP, both are payment technology that aims to connect the financial institutions. XLM is designed to be used as IOU token.

Q. How do I buy Stellar Lumens?

A. You can buy Stellar at the best rate from CoinSwitch.

Q. Are Stellar Lumens decentralized?

A. Stellar Lumens are decentralized payment protocol

Q. Is Stellar a Blockchain?

A. Stellar is a blockchain, aimed to provide financial assistance to individuals and organizations.

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