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What is Stellar (XLM) ?
Cryptocurrency developed by Stellar Development Foundation, is called Stellar cryptocurrency. It is also known as lumen with a symbol of XLM. This cryptocurrency has a specific place to be spent, the Stellar network. The Stellar network is a distributed ledger network containing blockchains. Fascinating about the Stellar network is the bonds, created between banks, customers and payment services, letting most of the trades to be done.
Cryptocurrencies are digital currencies in a very complicated system. The system can’t be ditched and counterfeiting the currency is something impossible to imagine. The algorithm flows in the blockchain, makes the system the strongest possible outcome.
The reason people get confuse with the name of lumen and stellar is because lumen is used to be called Stellar. Since 2015, the name has been changed to lumen to avoid the confusion because of the name similarities.
Lumen’s properties are exactly the same as Bitcoin’s. Both aren’t issued by a central authority and none is government-base currency.
The reason of using lumens is as same ether. It must be used to keep the Stellar network secure. Lumens will be easier to understand once they are known as an antispam. A minimum balance of 0.5 lumens has been set, that’s why the users are pushed away, so, the blockchain will stay clean from abandoned accounts.
Approximately, 22.5 billion tokens of Lumen are in circulation. The maximum amount that is allowed to be in the circulation is 50 billion. However, before November 2019 the cap was 100 billion and half of it just burnt for decentralized system to be protected. A short-term rise in the lumen’s price is occurred but it didn’t last long.
In March 25, 2021, lumen’s market capitalization was around $8.3 billion, making it amongst the most valuable altcoins ever with a place of 11th. In May 2020 lumen lost more than two-thirds of its value and having the 11th spot, deserves a respect and congratulations.
Stellar Development Foundation, holds 95% of tokens. It distributes these tokens following the proportion below:
50% to random people, 25% to companies or organizations of the ecosystem, 20% to Bitcoin holders and the remaining 20% are saved for its further upgrades and enhancements.
Jed McCaleb is the name of the founder of Stellar Development Foundation. To launch the project, assistance was needed. Stripe, is a foundation as payments infrastructure for the internet. With the support of Stripe and organizations like BlackRock, Google, and FastForward, XLM Development Foundation built itself up.
Jed McCaleb is also the creator of lumens. He also created Mt Gox, the first major Bitcoin exchange.
Others who helped XLM to be created are listed below:
David Mazieres, creator of the XLM consensus protocol.
Denelle Dixon, SDF’s Executive Director and CEO.
Joyce Kim, co-founder of XLM and former Executive Director of the SDF.
XLM uses a blockchain. It means there is no extra charges while using network. Economics tasks such as banking services is easier to be done with Stellar network.
Stellar has a feature supporting a distributed exchange mode. This feature converts the currency to whatever it meant to be paid as. Users are allowed to pay a specific currency they want, and the receiver on the other side, collect his money in the currency he desires.
Stellar became a cross-border transfer and payment system, meaning it needs to improve its functionality. In another words, it needs to reduce its costs and time lags.
What makes XLM popular is its consensus protocol. Today’s protocol mentions that the authentication process must be done by trustworthy nodes being selected; not by the whole network of nods. Stellar protocol is its itself fork, saying that Stellar is an open-source.
To do so, nodes are separated into different groups, each node must select a trustworthy set to himself, and once all the nodes of a group choose their desirable set as well as verifying others choices, a set of trustworthy nodes is created. The fewer nods do authentication process, the less time-consuming the process will and by that the costs get lower.
Each transaction takes nearly 5 seconds to be verified. Compared to Bitcoin, that’s quite a miracle.
XLM has resourceful partners. One of the main one is the giant IBM. This implies that Stellar has no lack of financial experience as well as technical knowledge.