What is Stellar (XLM)?
Stellar (XLM) is a decentralized peer-to-peer (P2P) network created in 2014 by the Stellar Development Foundation or Stellar.org. The network was officially launched in 2015 with the goal of connecting the world’s financial systems and providing a single protocol for payment systems and financial institutions. The platform is designed for fast and reliable movement of financial resources at minimal cost. Stellar connects people, banks, payment systems and allows users to create, send and exchange different types of cryptocurrencies.
The backbone of the network is its own digital currency: XLM or Lumens. XLM acts as a bridge currency for trading and is also used to pay transaction fees.
How it works?
The Stellar payment protocol is based on distributed ledger technology: open source, community owned and distributed. XLM is more focused on helping people move money than on institutions. In this way, Stellar offers access to financial systems so that people can send money around the world cheaply and quickly.
In addition, Stellar serves as a decentralized trading platform and exchange with a built-in order book that tracks ownership of Stellar assets. Platform users can manage buy/sell orders, as well as select and set their preferred assets in settlements. XLM is a built-in currency that helps reduce transaction fees.
The network maintains a high level of security. This nuance pursues a global goal: to carry out network transactions efficiently and with minimal time costs. In addition, Lumens offers protection against flood attacks, making microtransactions too costly for hackers to profit from, protecting the Stellar Network from serious threats.
Stellar’s target audience is people in developing countries, ordinary users who are given access to the global economy through fast, easy and cost-effective transactions. Stellar Network makes extensive use of Lumens to create forward convection and send cash in multiple currencies; The currency is sent from the node and the recipient can receive the amount in another currency. This feature is useful when making trades between currencies that do not have widely traded pairs.
Support for multi-currency transactions is another competitive advantage of Stellar, and the ability to perform multi-currency transactions has only improved processes with offshore transactions. Moreover, stable speed and low transaction costs are a privilege that users enjoy.
This functionality is provided by a development called Anchors (a bridge between different currencies and the network), which simplifies exchanges within the network and helps speed up the entire process.
Star story
Stellar is managed by the Stellar Development Foundation, a non-profit organization founded by Jed McCaleb. The Stellar project received initial funding from payments startup Stripe and donations from other organizations. Stellar also covers its operating costs through tax-deductible public donations.
In 2018, Stellar signed an agreement with TransferTo for cross-border payments to more than 70 countries.5 It also became the first distributed technology ledger to receive Shariah compliance certification for payments and asset tokenization, and was selected as an IBM (IBM) partner. for a dual-pegged stablecoin project.
The future of the stars:
Stellar’s primary focus is on developing economies in the areas of remittances and bank lending to the unbanked. Stellar does not charge individuals or institutions to use the network.
Stellar supports distributed sharing mode. This allows users to send payments in certain currencies even if they have loans in another, while the network automatically handles the currency conversion. The recipient can withdraw their currency equivalent through a partner organization, such as a bank.
As a cross-border payments and transfer system connecting financial institutions, Stellar aims to significantly reduce transaction costs and delays. Although Stellar operates similarly to technologies such as Bitcoin, its key differentiating feature is its consensus protocol. The current version of Stellar is the result of a 2014 fork that created the Stellar Consensus Protocol (SCP), after which Stellar became an open source system. Under this protocol, the transaction authentication process is limited to a select set of trusted nodes rather than remaining open to the entire network of nodes.
Even with the similarities and improvements, it is unclear whether Stellar will gain popularity, although its trading volume and market capitalization continue to slowly increase over time.
Is XLM Crypto a good investment?
The Stellar XLM cryptocurrency is used for on-chain transactions, but can be purchased as an investment. You should thoroughly research Stellar and XLM before deciding to purchase for investment purposes. Additionally, a professional investment advisor can help you decide if XLM is right for your portfolio.
What is the XLM cryptocurrency?
XLM is a token used on the Stellar blockchain to pay transaction fees. It can also be purchased on some exchanges for other purposes.
Is XLM better than XRP?
Cryptocurrencies are usually created for a specific purpose. XRP is a token used by Ripple to facilitate banking transactions, and XLM is used to facilitate cross-border and cross-asset transactions on the Stellar blockchain. Which one is better depends on your opinion.