The name of Stellar cryptocurrency comes from Latin. It can be translated as «one that belongs to the stars». The rate of the coin initially gave an impressive rally. Just like with all other cryptocurrencies, there was a correction later. However, in the long term, Stellar Lumens has great potential. Stellar Blockchain technology is quite promising from the perspective of building financial systems of the future.
In our review of Stellar Lumens, we will talk about the features and benefits of Stellar Lumens (XLM) and tell you how to purchase this cryptocurrency. Additionally, we will find out what are the prospects of Stellar Lumens as an asset for investment.
Philosophy and features of Stellar Lumens
Stellar Lumens cryptocurrency is managed by the Stellar Development Foundation (SDF). It has set itself a goal of creating a real alternative to the well-known Ripple cryptocurrency. According to the creators of Stellar, this platform should be available not only to banks and payment service providers. In particular, people who for some reason can’t pay with non-cash money should be able to use cryptocurrency.
Stellar is a decentralized network. Therefore, there is no supreme organ that controls and regulates it. Money transfers via Stellar Lumens are as fast, transparent, and simple as possible, regardless of counter-agent locations and national borders.
As with Ripple, the idea behind Stellar is to generate transfers faster and more securely. This meets the needs of banks. If SDF achieves its stated goals, in the long run, the network could even replace the SWIFT interbank system. So there are many good reasons to buy Stellar Lumens.
How does Stellar Lumens (XLM) cryptocurrency work
The Stellar platform consists of a so-called peer-to-peer network and various payment service providers. The system allows the exchange of different currencies. For example, users can send euros and receive U.S. dollars in return. Network tokens in Stellar are called lumens or abbreviated as XLM. Yet, these tokens are only used for internal processing within the system.
The Stellar network consists of separate servers (nodes) that exchange data with each other. Each of the servers keeps a record of all transactions. Every 2-4 seconds, the servers try to reach a consensus, and as a result, the completed transactions are recorded in a database called “ledger”. With each such operation, a new package of transactions is recorded in the “ledger”, and then it is kept up to date and synchronized until the next consensus.
How good is Stellar Lumen as a means of payment?
Lumens also referred to as XLM, are the means of payment in the Stellar network.
A small fee of 0.0001 XLM is charged for each transaction. This is intended to prevent so-called denial-of-service attacks, which can lead to blockchain overload or even crash.
The security of Stellar users comes first. For this reason, each server on the network has a copy of the «ledger», so it is virtually impossible to insert fake records into the blockchain.
Transactions in the Stellar network are processed in less than 5 seconds, which, combined with negligible commissions and high security, makes XLM a very convenient means of payment.
Purchasing Stellar XLM: possible options
If you decide to become the owner of Stellar Lumens, you can buy it on the exchange or using an online exchanger. In the first case you will most likely need to pass KYC verification, exchangers often do without this formality. When you buy coins on the exchange you can store them directly in your account, in the case of the exchanger, you will need to indicate the address of your Stellar wallet.
Optimal in terms of convenience and security is an online wallet. If you have not yet created your own Stellar wallet, then follow the link https://stellar-wallet.org/ to get convenient and secure storage for your Lumens. Registration of a new wallet will take you no more than 5 minutes, and then you can not only store but also send and receive Lumens.
Payment with Stellar Lumens cryptocurrency is not much different from the usual bank transaction. Just instead of a bank account number, you need to enter the address of the receiver’s wallet.
Stellar (XLM): exchange rate history
If you’re considering buying Stellar Lumens, it’s worth taking a closer look at the price of the last few years. At the end of 2017, XLM experienced a dizzying rally, “jumping” from $0.01 to $0.89 in just a couple of months (which is the maximum of its price). However, in 2018, Lumen collapsed to $0.04.
The next rise of XLM (up to $0.73) took place in May 2021, when the growing Bitcoin “pulled” the entire crypto market with it. Many optimists predicted that Lumen would pass the $1 mark by the end of 2021, but this didn’t happen. At the beginning of May 2022, XLM was only $0.18.
Thereby, Stellar Lumens cannot be classified as a steadily growing digital asset. However, the value of the coin is now at its lowest level since the beginning of 2021, which opens up interesting opportunities for investing in it in the long term.
Forecast and the future of Stellar Lumens (XLM)
Many crypto experts agree that Stellar Lumen cryptocurrency has great potential. In the long term, it seems possible to replace the previously well-established Ripple cryptocurrency.
Positive aspects
● High blockchain performance. If you compare Stellar Lumen to other digital currencies, Stellar Lumen is much more powerful: about 1000 transactions per second. Other cryptocurrencies, such as Ethereum, create a maximum of 15 transactions per second.
● Collaboration with IBM. This company has long been working on its own payment system called «IBM Blockchain World Wire». This payment system uses the Stellar blockchain. Using this system, cross-border payments are becoming possible in real-time. It could overtake its competitor Ripple in the long run.
● Stripe payment method. Stripe is an online payment provider which offers various payment methods to its users. Stripe has been cooperating with bitcoins for a very long time. Because of the long transaction times, Strip Bitcoin switched to Stellar Lumens. The integration and cooperation with Stripe is an extremely big benefit for Stellar cryptocurrency. Thus, in the future, it may be recognized as an official means of payment.
Negative aspects
● Stellar Lumen volatility is high. Stellar Lumen and all other cryptocurrencies are characterized by high price fluctuations. The time element plays a very important role. Stellar Lumens exchange rate is one of them. If you are planning a long-term investment, you shouldn’t be worried about fluctuations. If you want to invest in the short term, you should use Stellar Lumen’s high volatility for trading.
● Technical issues – Stellar Lumens and the network behind it should continually improve in the future. The protocol is also regularly scheduled for revisions. The website and API need to be revised again. All measures are aimed at providing an improved blockchain.
Conclusion
The Stellar Lumens cryptocurrency has gained a lot of popularity in recent years. XLM’s exchange rate dynamics are not quite in line with the platform’s popularity yet, but that could change in the future. Important thing is that the Stellar Development Foundation is working hard to build the financial system of the future, collaborating with large companies. IBM and Stripe included.
For this reason, more and more traders are interested in Stellar (XLM). There are basically two options here. Coins can be bought via a crypto exchange or a crypto-exchanger. In the second case, you will definitely need a Stellar wallet. However, it will be reasonable to withdraw coins to a wallet even after purchasing on the exchange. In this case, you get full control over your assets, and on the exchange, there is always a risk of losing money.
As with most cryptocurrencies, it remains to be seen whether Stellar Lumen will really make a name for itself. For this reason, investors interested in acquiring it should only use a small portion of their capital to do so.