Altcoins: Stellar (XLM) What Is It? A Deeper Look Into The Stellar Platform

Altcoins: Stellar (XLM) What Is It? A Deeper Look Into The Stellar Platform

Summary:

  • What is the Stellar Platform and how does it work?
  • Advantages of the Stellar exchange.
  • Stellar's past, present and future price positions.

Read next: Altcoins: Ripple Crypto - What Is Ripple (XRP)? Price Of XRP | FXMAG.COM

Stellar Platform

The Stellar network is an open-source platform for currencies and payments. Stellar has no owner, it is said to be owned by the public. Stellar relies on the blockchain to keep the network in sync, but the end user experience is more similar to cash, the platform is much faster, cheaper and more energy efficient than most other typical platforms on the blockchain.

Stellar was launched in 2014, the platform was intended to enhance the current financial system, rather than undermine or replace the one already in place. The co-founder of RippleNet, Jed McCaleb, founded the Stellar network, as a non-profit organisation, which was first named the Stellar Development Foundation.

The Stellar platform is a peer-to-peer (P2P) decentralised network that is borderless, powerful and limitless. Stellars platform makes it possible to send, trade and create digital representations of all forms of money, such as dollars, pesos, bitcoin and more. The platform is designed to allow all the world's financial systems to work together on one single network. The Stellar network is designed for developers, the network has all the necessary tools needed to get a project up fast.

Stellar's API and SDKs are available to help you transform the financial world. The network's currency connections could give even a small company the reach and power of an international bank.

Stellars native digital currency

Stellars native digital currency is the Lumen (XLM), users are required to acquire this currency in small amounts to use in making transactions and initialising accounts. Other than this fact, Stellar does not privilege any currency in particular. There are 24.85 billion XLM currently in circulation, a market capitalization of $3.325 billion and a maximum supply of 50 billion lumens.

The Stellar platform maintains a high level of security, the XLM holders have to own at least one token in order to remain active on the platform. Lumens also offer protection against hackers by making microtransactions too expensive for hackers with no chance of profits, therefore Stellar is kept safe from serious threats.

Stellars platform can be used in the following way

With a few lines of code, users can create the following:

  1. Global Payment Apps: allow users to leverage the many currency-backed tokens that are already available on the Stellar network.
  2. Asset exchanges: users have access to Stellar’s built-in decentralised exchange for forex, cryptocurrencies or securities. Users can swap between tokens by using simple functions that are built into the protocol.
  3. Micropayment services: Stellar’s low, flat fees and fast transactions make it possible to make powerpayments of any size.

Advantages of the Stellar Platform

  1. Fast transaction speed: it is possible for around 2000 transactions to be processed each second, therefore, a maximum of 5 seconds is required to validate a transaction. The fast transaction speed of the platform makes Stellar an attractive tool when there is a need to make fast and secure transactions.
  2. Multi-currency support: it is possible to carry-out multi-currency transactions on the Stellar platform, to support this system Stellar makes use of an anchor system. The anchor system works by accepting any money as a deposit and a loan is issued in the desired currency. The system independently selects a profitable course.
  3. Extremely low transaction fees: unlike some other cryptocurrencies on the market, the Stellar payment platform is not designed to prioritise profits. It is possible to reduce the overall transaction fees thanks to the transaction speed and operating efficiency.
  4. Simplicity: the simplification of currency exchanges and the ease of use are benefits of the Stellar platform.
  5. Stellar is a decentralised and independent system.

Past, present and future prices

In the past, Stellar has experienced many growth jumps, such as when Mercado Bitcoin announced his use of the platform. In general, it is clear that Stellar has shown price promise, however, like with most other cryptocurrencies, the XLM token does carry risk. The XLM hit a slow patch between 2019-2021. Since then the price of XLM has shown volatility.

Currently the cryptocurrency markets have been declining, the current economic conditions are sending investors searching for safe-haven assets, a category that cryptocurrencies do not fall under.

Some analysts believe that an investment in XLM can bring future passive incomes for investors. It is also believed that the price of XLM may see some strengthening going forward and join some of the other larger cryptocurrencies. It is expected that by 2026 the price could reach up to $0.34 per XLM.

XLM Price

XLM Price Chart

Read next: Altcoins: Cardano (ADA) What Is It? - A Deeper Look Into Cardano (ADA) | FXMAG.COM

Sources: finance.yahoo.com, crypto-academy.org, stellar.org, coinmarketcap.org, gobankingrates.com, cryptonewsz.com

Rebecca Duthie

Rebecca Duthie

Remote Editor and writer Intern
FXMAG.COM

Rebecca has a bachelors degree in Investment Management, a Post Graduate Diploma in Financial Planning and is currently enrolled in a Masters program in International Management with a Specialization in International Finance.