Stellar Lumens (XLM) What Is It?
Stellar Lumens is an open-source cryptocurrency platform that aims to make cross-border transfers and remittance easier and more convenient. It has repeatedly been compared to Ripple but it is simpler and straightforward, more fitting for the average layman.
Just a few days ago IBM announced to work on their own stablecoin which is based on the blockchain technology. The cryptocurrency called Stronghold USD will be backed by US Dollars and held at the bank Prime Trust, which IBM already partnered up with.
As Stronghold is a payment platform which is running on Stellar, there is a very good and realistic chance to bring in institutional investors and lift Stellar to new heights.
*As mentioned in previous articles, this is no investment advice!*
Where Can I Buy Stellar XLM?
Users have the option to buy it on Binance, Bittrex, Kraken, Poloniex, and Upbit.
The Beginner’s Guide to Stellar Lumens
The official website calls Stellar Lumens an open-source payments platform that has been built as a solution to the need for an accessible international financial infrastructure. It aims to connect individuals, monetary institutions, and payment systems on its network.
The ultimate goal of the platform is to make financial transactions faster, more affordable, and more reliable than the current systems in place. Additionally, the platform’s protocol also allows its users to make efficient and reliable cross-border payments regardless of where they are in the world.
How Does Stellar Work?
With Stellar, users can send money to and from any place in the world. It allows users to liquidate their funds for other forms of cryptocurrencies using the exchange anchors that are available on the platform.
Anyone who has dabbled in cryptocurrencies has heard of the word decentralization. After all, it is the claim to fame of just about any available cryptocurrency in the market. Stellar Lumens is no exception to this rule. The platform runs on a series of decentralized servers set up by an international collective of various individuals and bodies. The servers are able to support the circulated ledger that tracks down all of the data and transactions that go through the network.
For the average Joe, this basically means that Stellar acts like a versatile and comprehensive platform not unlike Paypal. In order to begin transacting with Stellar, users need to upload a source of funds to the network with the use of an anchor. This anchor then keeps your money and distributes available credit to a virtual wallet. The system is quite similar to the system that traditional banks use.
Are you wondering why there exists a need to exchange debit for credit? Anchors actually function as a bridge for the Stellar network and the currency being used. The transfer allows users to convert the funds into the system’s open-source ledger.
The overall system then grants anyone the means to send funds on the network without having to go through a bank. This is one of its advantages over PayPal, which requires a bank transfer before the transaction is completed. Stellar also makes cross-border payments easier this way. A concrete example will be useful if you wish to use your balance in US Dollars to send money to individuals in other parts of the globe. It no longer matters if the recipient is using the Euro, Canadian Dollars, Chinese Yuan, and what have you. Stellar automatically does the conversion with the lowest exchange rate possible to ensure the ultimate convenience for both parties in the transaction.
Aside from the aforementioned uses, it is also possible to place exchange orders onto the open-source ledger if one wishes to buy or sell different currencies. The rates have all been determined prior to the order placement which means that the exchange rate is better than the one that is automatically applied to personal transfers.
Once you place a request in the order book, the order proceeds to enter the international marketplace. This also allows you to compare your order against other similar requests. Of course, it is important to remember that the subsequent exchange will not be limited to solely fiat currency. Fiat trading pairs and cryptocurrency will also be taken into account.
You already know that Stellar lets users to send money anywhere in the world without going through the difficulties posed by traditional banking methods or inflated currency exchange rates.
How does this work? Well, the Stellar network actually does one of the following in order to process your currency transfer:
- Stellar uses Lumens, the network’s created coins, as a mediator for the requested currency exchange. The funds are then converted from the currency sent by the user into Lumens. The resulting Lumens are then converted into the currency used by the receiving party.
- Stellar swaps the funds with an earlier offer available on the order book before it automatically verifies and facilitates the exchange request.
- In the rare case that there is no trading pairs available for the two specific currencies, the network then goes through offers that will allow a chain conversion into the requested currency.
The multi-currency exchange procedure is incredibly simple but resourceful. It offers a level of flexibility and accessibility to users from all parts of the globe. At the moment, the system remains unrivalled in this aspect.
Where to Store Stellar?
The bulk of the wallets used for Stellar Lumens are ledger specific or existing within the network for the internation marketplace. Stronghold is the system-ready exchange but StellarTerm also allows users access to the network. The Stellar Desktop Client has also made the platform easier to access from desktop computers. Other similar options are Saza, Papaya, and stargazer. The Ledger Nano S is a great wallet that is not only limited to Stellar.
Roadmap and Stellars Future
The Stellar 2018 roadmap has two main goals. First, it aims to launch a front-end called the Stellar Decentralized Exchange, also known as SDEX. Second, Stellar will also be integrated with the Lightning Network for convenient private channel transactions. Aside from these two, the network also aims to develop a better ecosystem support to accommodate the growing interest in Stellar. The team has also noted the need to improve security protocols and further develop the decentralization process.
What makes Stellar Lumens so attractive is how accessible it is. Unlike Ripple, the average Joe can use it without much difficulty. The network can change the way we process point-to-point transactions on a larger scale. The fact that Stellar can handle micro-payments, deliver remittances, and send payments make it incredibly versatile.
The network’s partnerships with groups like KlickEx, IBM, Keybase, Tempo, and Deloitte can be seen as testament to the potential held by Stellar. We are definitely excited to see what Stellar has in the future store.