If you ever wonder what coins there are except the Bitcoin that has already become a buzzword, this review is for you. Here, I will tell you about a new coin on the crypto market – Stellar Lumens (XLM). What is cooler about this crypto is that it does not require mining and actually works faster than Bitcoin.
By the end of this article, you will get a total understanding of the Stellar (XLM) as opposed to many other Stellar reviews since I will cover the following:
- The Stellar Project: Basic Information
- How can Stellar Coins be used?
- Basic Principles
- Stellar Tokens
- Stellar Wallets
- Advantages of Stellar and disadvantages of Stellar
- Bottom line
The Stellar Project: Basic Information
1. The Ripple history behind the project
- Jed McCaleb and many others were a co-founder of Ripple Labs, a company that developed a cryptocurrency protocol named the Ripple protocol. Jed worked hard to get his brainchild to the top; however, he left Ripple in 2014 because he was unhappy with the high centralization of the Ripple network and the way the initially promising idea turned into a project aimed at banks, payment systems, and corporations.
- A few years later, McCaleb launched an alternative project, Stellar Foundation, based on the same protocol. That is why sometimes people say that Stellar is a fork. Sure, in the beginning, it was a clone of Ripple from a technical side, but in 2015, it developed its own open-source protocol. Moreover, Stellar does not have the critical shortcomings of its predecessor. The main difference between Ripple and Stellar is that Stellartargets individuals and supports small businesses, while Ripple targets financial institutions, including some of the biggest banks in the world.
- The developers do not rule the Stellar Development Foundation, the company that manages the platform. What it means is that the founders of the Stellar Development Foundation, its board members, and consultants do not benefit financially from its activities. Instead, the organization only tries to create new ideas and implement them into the Stellar blockchain.
- At the beginning of Stellar’s life, the Stellar Development Foundation decided not to give away around 5% of all Stellar coins. Later, Stripe bought 2% of this set-aside coins to fund the work. And as a result, the foundation raised $3 million. So, putting a bit aside each month can be good investment advice for all of us.
- Another name that you should be aware of when you are in the Stellar community is Joyce Kim, a co-founder and Stellar’s Executive Director. The fact the Joyce Kim left Ripple to work on Stellar was a key -statement against false allegations that Coindesk tried to put on Stellar.
2. The Platform Concept
The idea behind the platform is simple: it should cover all the needs of any users to fulfill their financial transactions all over the world. That being said, the Stellar is made for easy conversion between fiat currencies, other assets. The platform developed its own Stellar cryptocurrency or Stellar Lumens (XLM). These Lumens can be easily converted into any currency in the trading pair. Stellar’s technology also allows to open up smart contracts, conduct ICOS, and create decentralized applications. All top reviews mention it this way. Stellar becomes more powerful than such companies as Ripple and even Ethereum.
3. The Platform Functionality
Like any other blockchain, the Stellar network is a network of nodes or computers that have a copy of the database of all accounts for verification. This database is called the ledger. Only here, these nodes are independent of one another. The Stellar Development Foundation s own research found out that this way, the efficiency of the transaction process increases multifold. The ledger should always have up-to-date information. That is why the nodes connect to each other every 2-4 seconds. This process is called consensus protocol (more about it below). This protocol ensures that all the past information about the transactions and exchange requests changes in all the nodes.
How can Stellar coins be used?
Stellar Lumens (XML) are a good choice when you have to trade the crypto widely, fast (in around 3-5 seconds), and with no mining as opposed to unscalable and slow Bitcoin. Furthermore, the reviews mention that the users in developing countries find Stellar Lumens especially helpful since they do not need to find any access to a bank. The co-founder community especially focused on the availability of the system anywhere in the world. That is why they were excited to create desktop and tablet versions, as well as an app.
Stellar allows you to complete the crypto transaction fast and with low fees as opposed to many other crypto exchanges. The focus for Lumens is to make the transaction as cheap as possible, so instead of a 20% fee, you would pay around 0,00001 Lumens or about $0.01.
In this section, I will cover the basic features of the Stellar network. It is considered to be one of the most secure payment systems since it has never been hacked before, thanks to the developers.
The project’s concession includes the following basic principles:
- Consensus algorithm;
- The universal protocol of user trust;
- Multicurrency trading advantages.
Most of the exchanges focus only on one transaction simultaneously, while at Stellar, parallel transactions become true due to this principle. It is made possible since the nodes work in an autonomous mode, preventing system failure.
Another thing achieved by the implementation of the decentralization principle is the automatic record of all made operations. Each node has a fraction of all transaction protocols stored in its memory.
2. Stellar Consensus protocol
Since nodes work independently, they can also access the server on their own and check the current book of records for the registered operations. The automatic consensus algorithm is responsible for making this function possible. The consensus is a helpful protocol that ensures the successful completion of operations by the process when each node exchanges current information with each other, as well as with the ledger or the database of all accounted operations. The consensus is reached every 3-5 seconds, which is why the speed of the operations is very high in comparison to other cryptos.
In the Stellar community, there is a special group of users that earned the trust by using the platform for keeping the money, exchanging the currencies, and issuing loans. They are called anchors and serve as a bridge between other currencies and XLM, meaning that they participate in all transactions made in currencies other than Stellar (XLM). Such operations differ from the ones made in the banks since they always have the form of a loan.
4. Distributed Exchange
Another helpful feature of the platform is the ability to store operation in the form of public obligations, connected by the exchange of a loan of funds at a certain rate for a certain period of time. It is made possible by the anchors first and then by the users who have the chance to buy and sell crypto constantly.
Many crypto companies do not allow you to use various currencies in one online wallet or in general. The same cannot be said about Stellar Lumens since here the money exchange is distributed among users and anchors via several ways:
A single conversion: the program allows you to find offers for internal exchange and automates the operation;
Intermediate currency: this means that Stellar tokens are used to represent other fiat currency for further exchange, then you can find users interested in the same exchange process.
A chain of conversions: if there are no direct counteroffers for the exchange, Stellar will find you a series of intermediate offers to perform the operation you need.
The Stellar tokens (XLM) were specially designed for use on the Stellar platform. They have a certain attributed value that is important for network operations. As with other cryptocurrencies, the XLM tokens they can be traded and exchanged on one of the available crypto exchanges. Now, on the market, we have around 100 billion XLR tokens with a single coin costing 0.458027 US dollars or 0.00004174 BTC.
Stellar (XLM) Coins Wallet
The project’s official website provides you with all the information on its principles and the cryptocurrency, as well as ways to purchase tokens. First, you will need to have an account registered in the network. Once you have an account, you get a personal purse number that can be found in the section “Wallets.” In the same section, you have the chance to choose the software suitable for your needs and compatible with your device.
The registration is easy even for the newbies in the world of cryptocurrencies. You do not even have to go through a verification process, just provide an email address used for registration confirmation and obtaining your personal wallet number. The waller is a helpful digital representation of your credit card: here, you also just state what transaction has to be performed, and the funds go directly to your account.
Pros and Cons of Stellar (XLM)
It is worth mentioning the advantages of using Stellar instead of other exchanges. The project offers you the following benefits for trade and exchange.
- You can have parallel operations;
- Extremely secure system (no hacks before, which is a rare thing for a crypto exchange);
- Low fees in comparison to big companies like Western Union;
- The platform is compatible with numerous third-party products of the cryptocurrency world;
- The platform is focused on providing uninterrupted work in real-time;
- Cryptographic data encryption;
- Plugins integration is possible.
- Almost no spam accounts due to minimum balance.
However, there are some major pitfalls that I have to mention here for providing you full information on the system.
- There is a mandatory withdrawal of the commission of about 0.00001 token, which is not a big sum of money, but still, it exists.
- There is a minimum balance of 20 XLMs to perform operations, and you should have 35 XLMs on your account to use an anchor.
- The development team has the rest of the coins that can be distributed in the future. This can lead to the eventual fall of the network.
- The Stellar team size is small for an international company, with just 10 employees, 3 members of the board, and 8 advisors. But again, I have to mention that all the members of the team are industry leaders and experts.
Here, in their article, you got to know the Stellar Lumens platform, its pros and cons, as well as some historical cornerstones for the exchange. The thing of the most important value for Stellar is that it works on a special protocol that ensures the stability of the system, prevents its failures, and gives more chances to get higher speed for carrying out transactions.
Second worth mentioning fact is that the system is extremely secure and can be used as a part of IBM’s global blockchain initiative. In the span of the years of its existence, Stellar has never experienced a DDoS attack or been hacked. All that ticks the security checkbox.
And as a prospect for future investments, Stellar can make it work for you. In 2017 the XLM traded for $0.001 more than a year before, according to Coinbase, meaning that you could raise your funds significantly having bought a few tokens beforehand.
Is stellar fund legit?
The co-founder of Stellar claims that this system is the most legit and secure on the cryptocurrency market you can find.
Can stellar lumens reach $100?
The market cap of a single XLM coin is 0.458027 US dollars which is the equivalent of 0.00004174 BTC. It is probable that it will reach $100 in the next few years.
How many stellar lumens are there?
The project lives its full life for three years, and since then, there are about 100 billion tokens available for purchasing and selling within the network.