An increasing number of digital currencies underscores the need for a unified trading platform supporting both digital and traditional money. Stellar is an interbank network that facilitates safe and easy exchanges between fiat currencies like the U.S. dollar and digital currencies like Bitcoin. Stellar is based on the same principles as tokens. You can either trade these tokens or even withdraw the money if necessary. This has made international money transfers more convenient than traditional institutions.
Stellar’s distributed ledger network facilitates transactions between financial institutions, payment systems, etc. This architecture attempts to make cross-asset and low-cost value transfers possible.
In this piece, we’ll go over everything you need to know about the Stellar blockchain and the XLM crypto coin currency that runs it.
What Is Stellar?
Stellar is an open-source, decentralized blockchain platform launched in 2014 by Jed McCaleb, the developer of eDonkey, Mtgox.com, and the Ripple protocol. It provides low-cost, high-throughput banking services by bringing together the world’s financial institutions on a single blockchain.
Stellar calls itself “crypto-adjacent” since it doesn’t aim to completely replace existing financial infrastructures but rather to supplement and improve upon them. Stellar allows anybody to create, transfer, and exchange any digital representation of money, unlike Bitcoin, which is a cryptocurrency network designed just for Bitcoin trading.
What Is XLM?
On cryptocurrency exchanges, the Lumen is represented by the three-letter abbreviation XLM. Lumen is Stellar’s native cryptocurrency used for making purchases and creating new accounts. Each Stellar network account must maintain a minimum Lumen balance at all times.
Over 6.7 million Stellar accounts have been created so far, yet there are only roughly 50 billion Lumens available. 20 billion Lumens are now in use, while the Stellar Development Foundation is holding onto the remaining 30 billion and will release them to the market at a later date.
How Does Stellar Function?
Stellar transactions and ownership are recorded on an unalterable distributed database called the blockchain. Stellar’s platform processes millions of transactions daily, and the network is updated and confirmed every few minutes. Over 6.7 million unique users have used it so far, resulting in more than 2 billion executed transactions.
Affirmation of Consent
Stellar’s safety comes from using a consensus system based on Proof of Agreement (PoA). In PoA, participants reach an agreement by exchanging a series of short messages in which they confirm transactions and commit them to the distributed ledger. To verify transactions and generate new blocks, PoA offers a quick, non-mining, and energy-efficient alternative to the conventional mining process.
Unrestricted Accessibility
Stellar’s promise of financial equality rests on the fact that it will attract a sizable user base that has been historically precluded from using similar services. Stellar delivers on its promise to simplify the usage of conventional financial institutions in the digital world by maintaining a decentralized, transparent, low-cost, and open network that anybody may join.
Because there is a one-to-one ratio between local currencies and tokens, programmers are free to build their own financial apps, and institutions are given the ability to develop their own currencies. So, the value of money is preserved despite its mobility. You may possess the value of a country’s money even if you are not physically located there, which simplifies international payments.
Where Can You Buy Stellar?
Stellar may be purchased using conventional currencies like the U.S. dollar or the Euro on cryptocurrency exchanges. Understanding the XLM exchange rate and its historical performance is a necessary first step.
Stellar investments are stored in a digital wallet that functions like a traditional banking app when they are acquired. If you decide to keep your XLM, you may do so indefinitely or you can sell it back on the exchange at any time.
Evolution of the XLM Pricing
Stellar, like other cryptocurrencies, has a reputation for being very risky. Ever since its inception, the value of XLM has seen both highs and lows, making it impossible to provide a reliable forecast of its future price. Always conduct your own homework before putting money into cryptocurrency.
In early 2018, XLM hit an all-time high of $0.93, but it has since dropped and stayed toward the bottom of its range for the last several years. Starting in late 2020, the price of XLM saw a period of rapid increases and decreases. As of right now, it’s trading at a daily high of $0.085.
Final Thoughts
Stellar’s open-source platform, APIs, and SDKs let developers construct their own decentralized financial applications and services. These include global payment apps, asset exchanges, micropayment services, and more, in addition to digitizing existing currencies and integrating global financial markets on its blockchain.
