What is Stellar (XLM)?
What is Stellar (XLM)?
Stellar (XLM) is a decentralized, peer-to-peer cryptocurrency that utilizes an open-source blockchain network. The Stellar Network aims to be a new kind of global financial network built on blockchain technology to streamline frictionless international transactions. How? Stellar creates a system where all parties involved in financial transactions are treated equally, without the need for a central authority or governing body.
While created by the same founder of Ripple, Jed McCaleb, Stellar shifts its focus to individuals instead of large financial institutions. Why? Because according to the World Bank, about 1.7 billion adults do not have a bank account. Roughly, speaking that is 1 out of every 5 people in the world with no access to financial services. Stellar wants to change that but without including the traditional banking system as a middle man.
Stellar connects people, banks, and payment systems by promoting global financial access, literacy, and inclusion. The neat thing about Stellar is that it has a built-in decentralized exchange for cryptocurrencies, forex or securities. What is even better is that users can swap between tokens in the protocol using built-in functions.
How Does Stellar Work?
By leveraging decentralization to improve the current transfer systems, Stellar incorporates a distributed ledger, that improves efficiency and transparency for users. The ledger maintains all network data including, transaction history to transfer systems in use and an unbroken record of all transactions since network inception.
The Stellar Development Foundation guides and supports the Stellar network development. It provides access to make decentralized financial transactions available to regions of the world that lack access to traditional banking institutions and services.
The XLM cryptocurrency facilitates fast and reliable transaction times, on average 5 seconds or less. Stellar claims to be able to process over 3,000 transactions per second. That is incredibly high for any cryptocurrency blockchain. For example, Bitcoin is only able to process around three transactions per second, and Ethereum can only handle approximately 15 transactions per second.
However, Stellar is one to watch in terms of inflation. Because it is inflationary where supply increases over time, this puts downward pressure on the coin’s price.
Other facts about Stellar:
The Stellar Network offers extremely low fees by utilizing XLM as the official cryptocurrency. Transaction costs usually are only a fraction of a cent. Stellar's transaction fees have consistently remained low at a fixed rate of just 0.00001 XLM per transaction.
In creating XLM, this keeps Stellar free from being tethered to any particular currency. This is particularly useful because of the large number of currencies the platform facilitates.
Unlike other cryptocurrencies, XLM is not minable. Instead, Stellar has built-in a fixed inflation mechanism with the number of new lumens added at an increased rate of 1% per year.
Stellar also supports smart contracts, which makes XLM programmable money, makes it possible to sell a Stellar-based token to fund a blockchain project’s development.
The Stellar network facilitates cross-border and multi-currency transactions, converting coins to any of 180 listed fiat currencies.
Companies such as IBM, Franklin Templeton Investments, Securrency and others use the Stellar platform.
Buying Stellar in Canada can be done through a cryptocurrency exchange, a peer-to-peer trade, or at some Bitcoin ATMs. However, utilizing a platform like NDAX will allow for affordable, safe, and fast transactions.
Original Author: Jed McCaleb
Initial Release: July 31, 2014
Circulating Supply: 20,486,280,706 XLM (as of July 30, 2020)
Supply Limit: None
Market Cap: $2.62B CAD or $1,981,506,698 USD (as of July 30, 2020)
If you are based in Canada and looking for a Bitcoin exchange, take a look at NDAX. NDAX is an easy-to-use, beginner-friendly exchange that can give you easy access to trade Stellar and other cryptocurrencies like Bitcoin, Ethereum, Cardano, Ripple, Litecoin, Dogecoin, and EOS.