There are about 10 thousand different coins and tokens on the cryptocurrency market. Each project has its own goal and purpose. Bitcoin is a store of value. Ethereum is an ecosystem for creating decentralized projects (smart contracts, DeFi, etc.). Stellar is suitable for micropayments and transboundary money transfers.
This article will discuss the Stellar project in detail and determine its strengths, weaknesses, and prospects.
The Creation and Purposes of Stellar
Stellar (XLM) is a platform based on blockchain and meant for sending digital assets from different points of the world. The purpose was to give users the chance to perform fast, cheap payment transactions safely. It was created as Ripple`s competitor in 2014 by XRP co-founder Jed McCaleb. It has Stellar Lumens (XLM) tokens.
The Stellar Lumens appeared in 2014. At that time, the Ripple project faced widespread criticism. Many blamed the developers of this crypto asset for a centralized approach. In the end, they came up with the idea to create a fork with the same principles, focusing on system decentralization.
The primary purpose of the crypto asset is internal functionality, payment for system support, and investment. Assessing the potential and prospects, creators pay attention to the Stellar Lumens platform instead of digital money. The original name was Stellar; it was changed to Lumens in a while. Developers do not aim to make their own digital money a full-fledged means of payment or an intermediary currency for exchange.
Stellar is an open-source, fully decentralized platform with an embedded Stellar Lumens (XLM) token. It is meant to support any type of currency. It includes a decentralized exchange for trading any coins or assets.
Stellar Lumen is based on the same protocol as Ripple (XRP). At the beginning of its existence, the Stellar platform was its copy. It switched to its in-house open protocol in 2015. While developing the new platform, the project participants eliminated many of the shortcomings for which Ripple was criticized.
Stellar was meant to be a tool to make transboundary transfers available worldwide. It includes banking instruments the same as Ripple`s, as well as its own decentralized protocol.
Where Can I Trade Stellar?
XLM cryptocurrency is available on almost all known centralized exchanges. If you want to buy Stellar anonymously, Godex decentralized exchange is the most suitable option. You will see XLM to BTC exchange calculator on the main page of the platform. Besides, 200 other popular coins are available. You don’t need to register on the exchange, so start converting right away.
- Liquidity. Due to anchors, any assets may swap without preliminary conversion. The exchange occurs through the built-in decentralized exchange, so transactions are executed almost instantly, unlike centralized platforms (like Binance, Bitfinex).
- Speed. While transactions in Bitcoin arrive at a shared pool before miners approve them, transactions in Stellar go directly to the node for verification. The whole process starting from payment application to receiving funds takes just a couple of seconds.
- Energy efficiency. Due to the use of the Stellar Consensus Protocol (unlike traditional Proof-of-Work), the verification process takes much less energy, compared to Bitcoin mining.
- Accessibility. Even in those countries where cryptocurrencies are band or not widely use, XLM will be helpful. One may send the transaction in crypto to the recipient who will cash out in any currency, even fiat money.
- Stellar’s average transaction speed is 5 seconds.
- The transaction price is meager, 0.00001 lumens each.
- Checking the node is easier.
- It has a distributed exchanger.
The popularity of cryptocurrency is undeniable; transactions should occur very quickly. Bitcoin is the most popular cryptocurrency, but it lags behind some of the newest market players when it comes to transaction speed. Some focus on improving their transaction speed and become famous and successful faster. An excellent example is Stellar (XLM), which has an average transaction processing speed of 5 seconds.
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