Stellar (XLM) – What You Really Need to Know
What is Stellar?
Stellar is an open-source payment technology that aims to connect financial institutions and reduce the cost and time of cross-border value transfers.
Stellar runs a network of decentralized servers and an underlying distributed ledger. Similar to Ripple, it uses only a small portion of their network as validator nodes, which enables faster processing of transactions than for example BTC or ETH. But this advantage comes with a cost, as it is the case with Ripple, this architecture is prone to centralization and offers far less security as a fully decentralized, permissionless blockchain where every full node verifies transactions.
The confirmation time of transactions is between two and five seconds.
Besides value transfer, it is built with a multi-layer architecture and can be used to construct and execute smart contracts and to create new tokens in its distributed ecosystem.
Several ICOs choose to leave Ethereum and migrate to Stellar due to its speed.
The native asset of the Stellar blockchain is called lumen, and the official ticker is XLM.
Stellar emerged on the scene in 2014 as a fork from Ripple. Founded by Jed McCaleb, who also is the co-founder of Ripple. He left the Ripple project because of different viewpoints about future development. From its inception to today, the code was changed entirely and re-built and has no similarities with Ripples code today.
The upgraded network went live in November 2015. IBM and payments network KlickEx announced in October 2017 that Stellar would be the backbone of its new “cross-border payments solution.”
Can it be mined?
No, all of the existing 103,887,050,716 XLM have been pre-mined at the inception of the network.
What differs Stellar from other Cryptocurrencies?
Transaction time and the choice to rely on a small number of chosen validators is what differs Stellar from most blockchain projects. In comparison with Ripple, which is a for-profit organization, Stellar has chosen the path to be fully open-source and is developed by a non-profit organization.
Initially, it was forked from the Ripple network but was ultimately rebuilt since then, and a new consensus mechanism was implemented (SCP), which is based on the federated Byzantine agreement.
How much is it worth today?
What is the total and the circulating supply?
The total supply of XLM is 103,887,050,716 and the circulating supply at the time of writing is 18,570,467,568 XLM.
Where can you buy XLM?
You can buy XLM on several cryptocurrency exchanges, most notably Binance, Upbit, Bittrex, OKEx. Kraken and the Stellar Decentralized Exchange.
Can XLM be sold for cash?
You can sell XLM for cash on cryptocurrency exchanges that have fiat-pairings with this asset, most notably Kraken and the Stellar Decentralized Exchange.
It has a lot in store in 2018. The Stellar Decentralized Exchange (SDEX) is live, and the team is working on a Lightning Network for XLM which will enable payment channels within the network.
Additionally, they plan to decentralize their ecosystem further and add more validator nodes.
Verdict and Rating
4/10Stellar is a fascinating project from a technology standpoint. In my opinion, it is a lot better developed than Ripple. What concerns me is the fact that XLM is an inflationary coin. The Stellar network as a fixed inflation mechanism where new XLM are added to the total supply at a rate of 1% a year. That makes sense for the use-case of payments and as a medium of exchange, but it is not ideal for an investor as it is contrary to scarcity.
The Stellar Development Foundation holds ~ 90 Billion XLM, which is over 85% of the total supply. This policy is not a good sign for an Investor. It is aimed at being a functional digital currency and at this particular use-case it is excellent. What is not meant for is for investment purposes. Due to the irrationality of the markets, it has experienced significant appreciation in value, and it may continue to make gains, but this irrationality will not last forever.
DisclaimerThe above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
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