Stellar Lumens (XLM): What You Have To Know About The New Hottest Cryptocurrency

During the times when investing in Bitcoin or Ethereum became less profitable, many investors are turning into smaller and lesser-known cryptocurrencies.

Those investments often prove to be more profitable in the long term run, especially if you’re lucky enough to invest in them at the very beginning when the price can be as low as a couple of cents.

One of the most prominent altcoins that have recently climbed to the top ten of CoinMarketCap is Stellar Lumens.

Hence, we prepared a roundup of what is Stellar Lumens (XLM) and what you have to know about the new hottest cryptocurrency.

The coin grew by over 100% in few days – on December 1, the currency was worth $0.06, only to reach $0.16 on December 7.

What’s more – the coin kept a steady growth despite the majority of altcoins falling due to a rising price of Bitcoin, with a total market cap of over $2 billion.

What Is Stellar Lumens (XLM) Coin?

What Is Stellar Lumens (XLM) Coin

Stellar is an open-source technology designed to be a distributed payment system.

Similarly to Bitcoin and majority of cryptocurrencies, it’s built on a decentralised, blockchain protocol that allows borderless money transfer more quickly than traditional banks.

The idea behind the coin is similar to Ripple and XRP – Lumens are the native tokens that operate within the Stellar network.

Hence, if you would like to use the network, you can only do it with the native tokens.

The two main benefits of Lumen transactions is a low transaction cost (0.00001 lumens per transaction) and speed (2-5 seconds).

Even though, the primary goal of the coin is to quickly transfer different currencies (both crypto and fiat), the hope for Lumens is to become a valuable financial asset for the developing world.

Stellar Lumens is a large-supply cryptocurrency – 17.8 billion XLM – and a maximum supply of 100 billion.

The coin doesn’t also require traditional cryptocurrency mining – it uses Stellar Consensus Protocol.

Instead, servers that run the Stellar software communicate with each other to validate transactions without requiring any mining power through proof-of-work.

Hence, the system is a lot more energy efficient and faster, allowing to validate transactions in 2-5 seconds.

Comparing to traditional banks, Lumens offers much cheaper and quicker services. Instead of lengthy and expensive conventional bank transfers, payments can be made within seconds at a minimum cost.

Regardless of whether it’s a transfer from Dollars to Euros or Dollars to Bitcoins.

Cryptocurrency Exchanges That Offer Stellar Lumens

Currently, Stellar Lumens can only be traded with other cryptocurrencies on:

What’s The Purpose of Stellar Lumens?

To create a successful cryptocurrency, there needs to be more than just an idea and hope of disturbing the market.

For instance, Bitcoin was the first ever cryptocurrency, Ethereum allows smart contract programming, IOTA facilitates machine-to-machine microtransactions, and Stellar Lumens aims at supporting the developing world.

If you buy into Stellar via the cryptocurrency Lumens (XLM), you are also supporting the nonprofit Stellar.org which utilises technology to fight poverty in a developing world.

The operational costs of Stellar are paid for with a small proportion of the initial supply of Lumens (5%) and regular public donations.

As stated on the Stellar’s website:

“With a team of top technology and finance professionals, the nonprofit Stellar.org expands access to low-cost financial services to fight poverty and maximise individual potential.”

The end goal of Stellar is to create a network for the developing world to help to operate the banks, exchange money through multi-currency transactions and provide quick liquidity to those who need secure payment services.

Stellar Lumens’ Partnership with IBM

Stellar Lumens’ Partnership with IBM

One of the primary factors of Lumens’ growing popularity and price was Stellar’s announcement from October 2016 about a partnership with an international tech company IBM to facilitate a payment service throughout the South Pacific:

“The significance of the news, which IBM announced on [October 16], is that merchants and consumers will be able to send money to another country in near real-time, accelerating a payments process that typically takes days.”

The goal of the partnership is to start processing the majority of foreign exchange payments made in the region of Australia, New Zealand and Fiji.

The announcement explicitly stated that the payment transfers will be made with Lumens as liquidity as opposed to Ripple and the XRP tokens which are still treated cautiously by the banks.

Moreover, IBM’s strong reputation on the tech market only validates the power of blockchain technology as a secure and efficient method of payment.

For instance, a farm worker from New Zealand can conduct business with a person from Indonesia for a fraction of the cost while comparing to traditional payment services. But keeping the security and confidence of blockchain.

The most significant difference between Ripple and Stellar Lumens is that the former focuses on global banking and cooperation with large banks and the latter on increasing secure payment services for average workers in developing countries.

You can find more information on Ripple in one of our articles on What is Ripple Coin.

The Future of Stellar Lumens

The Future of Stellar Lumens

Stellar begin as a fork from Ripple in 2014, which is precisely shown in many similarities between these two coins.

However, Ripple seems to be taking an aggressive approach to become the future of bank transfers, while Stellar Lumens is undoubtedly taking more of a holistic angle towards the developing world.

Over the last few weeks, both Ripple and Lumens faced a rapid growth in price after a lengthy period of stagnation.

For the time being, however, it remains to be seen how Stellar Lumens and Ripple will continue to differentiate from each other.

While it’s unlikely Lumens will soon reach a value of hundreds, it’s undoubtedly a long-term investment, which can prove to be lucrative.

For the time being what you have to know about the hottest new cryptocurrency – Stellar Lumens – is that it aims at not only revolutionising the financial market but also support a good cause.

And that seems to be always rewarded with time.

 

For more cryptocurrency articles, visit our Cryptocurrencies Page.

SHARE

Megan is a self-taught blockchain enthusiast. She enjoys combining finance with technology, from a less-techy perspective. BiteMyCoin is her most recent project underneath the umbrella of an international digital marketing agency ANCHOVY.