Stellar Lumens (XLM) is a fully decentralized consensus platform. It supports any type of currency and comes with a built-in decentralized exchange that can be used to trade any currency or asset.
Stellar is a technology that makes it possible to transfer money between people, companies and financial institutions as easily as sending an email. This means that individuals gain access to financial transactions, bank costs are reduced, and business profits increase. You can help improve the world's financial infrastructure by becoming a member of the community or by using Stellar at the heart of your financial transactions.
Cryptocurrency Stellar Lumens (XLM)
One of these independent systems, which is gaining popularity every day, competing with Ripple, is the Stellar Lumens (XLM) cryptocurrency. This asset may be interesting primarily because it is one of the most promising Blockchain platforms, and XLM is famous for its high profitability, which allowed many investors to make decent money during the past period of growth of the crypto market. At the beginning of 2022, Stellar was not in great demand and was trading at a price of $0.0025, but at the end of that year XLM was able to reach $0.31, thereby making more than 120 x .
The Story of XLM's Rise
However, the high profitability of Stellar is not the only advantage of this project. And today’s article will try to tell in more detail about this cryptocurrency, its history of creation, the main essence of this project, as well as the prospects for the coin’s growth in 2019.
Pros and cons of the Stellar system and XLM currency
Having a connection with Ripple, Stellar uses banking instruments, but is decentralized. Being created for cross-border payments with fiat currencies, the Stellar blockchain platform has its pros and cons.
Positive qualities of the Stellar system and the XLM cryptocurrency
Cross-border payments.
Using anchor technology, the Stellar system is capable of conducting fiat transactions without double conversion of assets. The exchange takes place directly through the internal DeFI exchange, without additional commissions. Using a decentralized exchange allows you to conduct transactions much faster than with a centralized approach like Binance and Bitfinex.
Up to five seconds to exchange.
The entire process, from block confirmation to payment validation by the network, takes from two to five seconds. This is achieved by sending payments for verification directly to the node, and not to the nodes, as is done in the Bitcoin or Ethereum system.
Energy efficient exchange.
The use of SCP’s own DeFI payment protocol and the Proof-of-Stake algorithm allow for more efficient validation than when mining currencies on ASIC machines and video cards.
Accessibility, even through restrictions.
XLM payments are notable for the fact that if crypto is prohibited in the recipient’s country, he can receive payment in fiat or any other Stellar-supported asset.
Wide bandwidth and open source.
The throughput of the Stellar system is 1000 T/s. The source code is open to the public for further analysis by the community.
Disadvantages of the XLM cryptocurrency and the Stellar blockchain platform
Mediocre protection against attacks
. Each double-spending attack that duplicates a transaction freezes the entire network until it can be identified. This network behavior is typical for any suspicious activity.
Built-in inflation mechanism.
Stellar's annual inflation rate is fixed at 1%, which is required for the issuance of new tokens.
Validation is not profitable.
Nodes participating in transaction validation only receive a commission. Participants have little motivation to become a validator.
Not suitable for complex dApps.
Stellar smart contracts are not Turing complete and are limited in their autonomy from the use of external tools. This is both a minus and a plus - the network cannot be overloaded with complex calculations and Stellar is suitable for creating simple dApp applications.
History of the creation of Stellar Lumens
The Stellar cryptocurrency was founded by Jed McCaleb and Joyce Kim in 2014 as the main offshoot of the Ripple project. First of all, the origin of the fork was due to the fact that many crypto users were outraged towards the Ripple currency. After all, at the time of the creation of XRP, the system code was closed, most of the servers supporting the functioning of the system belonged and belong to Ripple Labs, in addition, the lion's share of XRP coins is in the hands of the developers themselves.
And although in 2013 Ripple opened the source code of the system, thereby solving one of the general outrages, some of the developers still insisted on forking the cryptocurrency in order to solve the current problems of XRP. This is how the Stellar cryptocurrency was born.
At first, the creators of the coin used the Ripple protocol to somehow launch the system, but in 2015, their own Stellar protocol was created, after which this cryptocurrency began to gain popularity in the digital market.
Why the cost of XML is not falling
Despite the fact that the beginning of 2022 was marked by a decline in the cryptocurrency market, Stellar was able to maintain its position. The developers concluded promising contracts related to the addition of a digital asset on such an exchange as OKEx and the PundiX service . After this, the value of the currency increased 70 times.
Traders do not recommend selling XLM crypto coins now, since, in their opinion, it will be possible to make significant profits in the future.
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What are Stellar Lumens?
So, what is the Stellar system? Stellar Lumens is a completely decentralized consensus platform that supports absolutely any type of currency (digital and fiat). The platform system is equipped with an internal decentralized exchange that can be used by any interested user.
The Stellar Lumens network consists of peer-to-peer nodes located around the world. At the same time, the “anchors” do not depend on each other, thereby ensuring complete decentralization. Synchronization occurs between them every few seconds, which ensures the consensus of the SCP network.
Initially, Stellar was conceived as a special system that would allow, using smart contract technology, to transfer finance between people and various companies as simply and very quickly as possible. That is, the XLM cryptocurrency is an excellent alternative to the current banking system, more convenient and cheaper.
Another advantage of the XLM blockchain is the ability to create new tokens that can be used to launch ICO companies. Moreover, writing code using Stellar is much simpler than Ethereum, which uses a little-known programming language. This, in turn, creates problems for many users. That is why the XLM developers took this important point into account, making it possible to create tokens using the well-known C++.
How does Stellar work?
Stellar is a decentralized consensus platform on which transactions with various assets are possible. The Stellar cryptocurrency itself serves only as the main unit of account for transactions. Thus, the XLM cryptocurrency is an intermediate means of exchanging one asset for another.
For example, a user has litecoins on an exchange. He needs to transfer them to a third party but in the form of bitcoins or transfer them to his fiat account at a credit institution. To perform these operations, you simply need to register on the Stellar platform, enter the initial data, select the most suitable method that the system offers and then complete the transaction. In this case, lumens will only be required to pay the system commission. Its size is 0.0001 XLM.
The work of such a scheme is carried out on the basis of the decentralized exchange Stellar, which operates on the internal SCP algorithm, which acts as a consensus protocol. The algorithm is based on a ledger - an array of distributed data registry. Information about all completed transactions is stored here.
The functioning of the registry is based on the work of numerous independent nodes that duplicate ledger data. If one or more nodes fail, the system will continue to operate, since the data is stored on other nodes. This ensures the integrity and stability of all platforms.
Features of the Stellar Lumens cryptocurrency
Stellar Lumens ( XLM cryptocurrency ) can support thousands of transactions per second. The total confirmation time is very fast - only 3-5 seconds. The XLM cryptocurrency can be used to transfer or sell any currencies, assets or tokens, making the system multifunctional and very convenient. Stellar Lumens is open source (which once again increases trust in the company), which uses SCP technology instead of Proof of Work.
The cryptocurrency system is built in such a way that the network ensures complete decentralization of the database. The initial number of coins created is 100 billion XLM. Fixed annual inflation - 1%. The holder of most of the coins is the non-profit organization Stellar.org.
Flaws
If we talk about the disadvantages of Stellar Lumens, then we can note the need to pay a commission for carrying out transactions within the system, however, the cost of the transaction is more than affordable and amounts to 0.00001 XLM token.
Also, not all users may like the mandatory minimum balance required on the account, which is 20 Lumens. However, this cannot be considered a disadvantage, since this condition frees the Stellar network from a large number of spam accounts that do not bring any benefit to the project and users. To be able to carry out activities with anchors, you will need 35 lumens in your account.
Stellar Lumens Wallet
First, you need to create a wallet to store the Stellar Lumens coins you are going to buy.
Now there are 10 different wallets, 7 of which are browser-based web versions, some have a mobile version for smartphones. You can download the Stellar Lumens wallet or follow the link to the browser version here: [https://www.stellar.org/lumens/wallets/]
The open source wallet can be installed by downloading it from GitHub as well. Choose a download that works for your computer (for example, StellarDesktopWin64-v3.0.zip will work on a 64-bit Windows computer). After installation, create a new account, do not forget to save passwords and keys.
Stellar (XLM) Development Team
The founder of Stellar is Jed McCaleb, a very famous person in the world of cryptocurrencies. In 2010, he created the very famous MtGox exchange. For several years, this platform was the largest Bitcoin trading platform in the world.
Jed McCaleb. Creator of Stellar Lumens
Since 2011, he worked in the Ripple team on the development of an internal trading exchange for the exchange of goods and services. After creating his Blockchain project, he stopped being a member of the Ripple Labs development team.
At the moment, the project team consists of: board of directors - Keith Rabua, Joyce Kim, Shivani Siroya, Greek Brockman. Advisors: Patrick Collison, Greg Stein, Matt Mullenweg, Romandu Lemos. Developers: Bortek Nowotarski, Boris Reznikov, Brian Gale, Davidl Mazier.
Technology and Application
Stellar Lumens (XLM) is an ownership tracking system. It uses a ledger shared across a network of independent computers to store two things for each account holder: what they own (account balances) and what they want to do with what they own (transactions with those balances, such as offers purchases or sales), the Stellar ledger is more secure than other blockchains, Bitcoin can only store balances, adding transactions to the ledger means that when user bids overlap, the trade can be executed automatically.
The computers that run Stellar and publish the ledger are called nodes. They systematically check the contents of the registry to ensure that it is always consistent across the network. When you send someone a dollar in an app built by Stellar, the nodes check that the correct balances have been debited, and each node makes sure that every other node sees and agrees to the transaction.
Nodes agree using a unique algorithm called the Stellar Consensus Protocol. There are many ways to reach consensus in a distributed network, the Bitcoin mining method was the first and is still the most famous, but like many early projects, it has several shortcomings, SCP strives to correct them. It is customizable, fast and very energy efficient. Stellar has processed over 450 million transactions across over 3 million individual accounts.
Almost all international transfers are processed by the correspondent banking system. Very few banks can communicate directly, so your money must move from bank to bank until it finds its way to its final destination. In many places step-by-step translations are still required. In all cases it is slow and expensive. Stellar Lumens is a global, not national, payment system. In this way, users can go beyond their local economy and interact directly with the global market. Send, for example, dollars, euros or yen.
Transfers through the banking system. (Source: www.stellar.org)
Stellar Lumens is a network of peers, it allows any user to talk (make transactions) with any other user. This way banks can work directly with each other rather than "corresponding" through intermediaries. Stellar Lumens is ownerless and owned by everyone, no one. The organization controls the network so no one can shut it down, monopolize its functions, or hoard its data.
Transfers through the Stellar system. (Source: www.stellar.org)
Stellar has documentation, tools, and community support to help you quickly get your project up and running, access the SDK, step-by-step instructions, and connect with the developer community. It's cheap, transactions are nearly free, low fees mean great value for Stellar users, and Stellar's price opens up use cases like micropayments that aren't possible with other systems. Apps built on Stellar allow users to access the market without borders and hassle-free.
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You can send money. Stellar users can send money across borders faster and at a lower cost, transactions take around 5 seconds and cost just a fraction of a penny, you can convert any asset, Stellar makes assets liquid and flexible. You can switch between any pair of tokens issued on the network using simple functions built into the protocol.
Where to buy Stellar
You can buy the XLM cryptocurrency on many cryptocurrency exchanges; this asset is quite popular on the crypto market and the supply/demand for the coin is very high. The largest daily trading volume is on the well-known Binance exchange - about 23,000,000 US dollars. But you can also purchase this cryptocurrency on such popular trading platforms as:
- Binance
- Kraken
- Poloniex
- Upbit
- Bittrex
- CEX.IO
- Bitfinex
- Exmo
- HitBTC
- Huobi
- Kucoin
Passive mining pool
Mining of the Stellar cryptocurrency is not provided. Despite this, every network user can receive a certain amount of Lumens completely free of charge. The distribution is carried out to Bitcoin owners in the amount of 1% of the balance.
To receive passive payments, you can use the following recommendations:
- With a planned annual inflation of 1% of the XLM token supply, voting is activated.
- Lumen owners can indicate their address to receive generated coins and campaign all their friends so that there are as many votes as possible.
- Those addresses that receive more than 0.05% of the votes will receive a certain share of tokens.
- Voting takes place every week, so everyone has a chance.
The organizers of the Stellar mining pool have come up with a special scheme that works for those who vote in favor of their project. In automatic mode, the received coins are distributed among users who took part in the voting.
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How to store XLM cryptocurrency
The XLM cryptocurrency can be stored, like all other digital assets, directly on the exchange, however, this method is unsafe and is not recommended to be used if you are going to purchase a large volume of XLM coins.
In this case, it is better to prefer a more secure and reliable option - registering yourself a web wallet, desktop wallet or cold storage hardware wallet.
Web wallets are more convenient and faster to use. If you need to frequently perform any manipulations with your crypto account, then you should consider this option. The disadvantage of such wallets is the lack of private keys.
The most convenient and fastest Stellar web wallet is “STELLAR: STRONGHOLD”. Its advantages include a convenient design, the ability to store other altcoins, and high speed.
A desktop wallet is a more secure option for storing your cryptocurrency than online wallets, but to use it you will have to download the application to your PC and also download the entire blockchain database, which can both take a long time to load and take up a lot of hard drive memory .
One of these desktop wallets is “STELLAR DESKTOP CLIENT”, which, in addition to storage, can also provide you with the opportunity to exchange your coins within the service and send them to another address. The wallet supports three systems: Windows, Linux and MacOS.
Hardware wallets are the most secure way to store Stellar cryptocurrency. These wallets are a device that connects to your PC and through it you can directly access your crypto account. The disadvantage of hardware wallets is their slow speed and high cost. A similar device will cost you $70 or more. The most famous companies that produce cold wallets are Ledger and Trezor.
Benefits of XML (Lumen)
The market success of this digital currency lies in a number of advantages that it offers investors.
Among them are:
- Decentralization of the open source platform.
- Equal rights between system participants.
- Process transactions within a second.
- Support for all existing crypto funds.
- System security.
Like any other cryptosystem, Stellar has its drawbacks. However, they are not significant.
Among them are the minimum threshold for activating a wallet and the inability to carry out mining.
The threshold is very low - to carry out transactions, you must have at least 20 XLM on your account.
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