Stellar cryptocurrency, also called lumens (XLM), is a digital or virtual currency developed by Stellar Development Foundation. It’s traded on various cryptocurrency exchanges and can be used for low-cost, cross-asset transfers of value on the Stellar network– which is a blockchain-based distributed ledger connecting banks, payments systems, and people.
Cryptocurrencies are virtual or digital currencies that were created to be traded on decentralized networks, which we call blockchains. By doing this, it made them more secure against counterfeiting than regular currency and prevented them from being double-spent.
Cryptocurrencies aren’t regulated by central banks, which means that governments can’t interfere in their trading activity. A variety of cryptocurrencies have been created since 2009, including the lumen.
As previously mentioned, the lumen is Stellar’s cryptocurrency. There are 22.5 billion currently in circulation, with a maximum of 50 billion units total. The move to burn nearly half of its existing coins in November 2019 caused a sudden price increase for XLM, though it didn’t last long due to backlash over potential manipulation by the company. Coin burns aren’t well liked because they go against one of the main goals decentralization seeks to achieve: protection from corporations controlling the market.
Even though the value of Stellar’s lumen fell by over two-thirds as of May 2020, it is still one of the top performing altcoins and is ranked 11th on CoinMarketCap.
As of March 25, 2021, the coin’s market capitalization was estimated to be $8.3 billion.
Jed McCaleb founded the Stellar Development Foundation, a nonprofit organization that operates the Stellar project. The payments startup Stripe and other organizations like BlackRock, Google, and FastForward generously donated money to cover the initial funding. To cover operational costs,The organization accepts tax-deductible public donations.
In 2018, Stellar partnered with TransferTo to provide cross-border payments to more than 70 nations. It also became the first distributed technology ledger to be certified Shariah-compliant for payments and asset tokenization. IBM (IBM) selected Stellar as a partner for a double-pegged stablecoin project.
Stellar puts its emphasis on growing economies that need help with services like remittances and bank loans. And the good news is, you don’t have to pay any fees for using Stellar’s network!
Stellar’s distributed exchange mode lets users send payments in any currency, even if they hold credits in another. The network automatically performs the forex conversion, and partners like banks can handle the withdrawal process for receivers.
Stellar’s key advantage over similar technologies is its consensus protocol. The present-day Stellar resulted from a 2014 fork that created the Stellar Consensus Protocol (SCP). Under this protocol, transaction authentication occurs only among select reliable nodes instead of the entire network of nodes.
The Stellar network authenticates transactions rapidly and at a low cost by having each node on the network choose a group of other trustworthy nodes. Approval from all chosen nodes is required for any given transaction before it can be considered complete.