Stellar was launched in 2014 by Jed McCaleb, co-founder of Ripple and Mt.Gox. It is an open-source distributed payment network that facilitates transactions among payment services, banks, and individuals. Stellar Lumen (XLM), the native digital currency of Stellar, controls the blockchain network’s entire operations area, and is traded under the ticker symbol XLM on different cryptocurrency exchanges. At the initiation of the Stellar network, 100 billion XLM/Stellar Lumens were created. Over the last five years, Stellar has become one of the most dependable altcoins with a market cap of over $1 billion.
What is Stellar (XLM)?
Stellar is a payment protocol that allows faster cross-border transactions on the distributed ledger technology, which is significantly identical to other blockchain-based cryptocurrencies. Stellar’s primary goal is to emerge as the world’s leading digital payment provider through connecting with payment systems, people, and banks. Stellar enables the transfer of money anywhere, securely and quickly, with minimum transaction costs.
How do Stellar Lumens Work?
- Stellar uses decentralization to improve the transfer system and a distributed ledger technology to enhance users’ transparency and efficiency. The distributed ledger maintains and preserves the network data, which includes the transaction history, carried out from day one.
- The Stellar platform is straightforward and convenient, similar to popular payment processors like Paypal. The process starts when the user uploads the funds to anchors via the Stellar ecosystem.
- The anchor acts as a medium between the distributed ledger and fiat money.
- It is easy to send funds globally once the funds are available on Stellar’s distributed ledger. For example, if the user wants to send USD 1000 to another user in the EU, they need to upload USD to the Stellar anchor to add the network’s credit.
- The next step would be to transfer credit to the EU user. Stellar will convert the USD credit automatically to EUR and look out for the lowest exchange rate at the time of transfer. When the funds are converted, they are deposited in the EU user’s account, and can be withdrawn directly.
- The time taken to complete the entire process takes only a few seconds. Hence, Stellar simplifies the money transfer systems and offers a streamlined approach to transferring money.
Fascinating facts about Stellar
- Stellar’s cryptocurrency Lumen was founded in 2014. Initially, Stellar launched its crypto tokens with the same name, but since it created confusion, the Stellar network currency (XLM) was renamed in 2015 as Lumens.
- Stellar’s USP permits financial instruments and their currencies to be exchanged and transferred directly worldwide with zero transaction fees.
- Stellar aims to become a mainstream platform for payment, and has partnered with various influential financial establishments around the world. Deloitte and IBM have supported and collaborated with Stellar to promote and improve the blockchain’s revolutionary payment processing system and introduced it to real-world applications.
- The Stellar Development Foundation is a non-profit organization that enhances and develops the world’s financial system. It also has a profit wing that goes by the name InterStellar.
How Can You Use Stellar Lumens?
- Stellar is used to transfer money globally and operates as a bridge currency among the tokens on the network. Moreover, Stellar is a blockchain-based network that can be stored virtually without a bank account.
- Stellar acts as a universal translator, supported by the Stellar network. Due to its inbuilt decentralized exchange, banks, people, and businesses can transfer any currency cheaply and quickly around the borders. The user can also trade with Bitcoins, Ethereum, or Stellar’s Repocoin.
- Using Stellar Lumens, the user is not expected to deal with an expensive fee charged by companies such as Western Union. This implies that the user can send or receive money worldwide and is required to pay a nominal fee of 0.00001, which is below $0.1.
Future Prospects of Stellar
- The adoption rate of Stellar is directly proportional to XLM’s price, i.e. the more Stellar gets adopted, the cost of Lumens increases. Even though the network provides more functionalities, this may not reflect its price; Stellar blockchain has various partnerships with boosting tech giants, including IBM, Tempo money, Flutterwave, and others.
- As per the Stellar Lumens Price Prediction, the long-term price is foreseen to vary; experts suggest that the price might go up to $5 to $10, experiencing a 500% growth. A long-term price increase of up to $1.110 is expected based on Stellar Lumens Price Prediction.
- Stellar enables traders to diversify their portfolio and generate profitable ROI. Stellar is gaining wide recognition and has been traded on several crypto exchanges, making it a good choice for traders.
Overall, stellar is a distributed payment network with an open-source code, facilitating a smooth approach for international money transfers like remittance payments. Presently, this blockchain is known for its reliable transfers and cheap cross-border transactions, thus becoming one of the most popular cryptocurrencies worldwide due to its extensive expertise and trailblazing approach.