XLM Stellar is just one of many cryptocurrency exchanges and payments currently available. Its popularity may make you wonder if XLM is a good investment for you.
To make this decision, you need to consider Stellar’s experience and achievements to date.
Stellar is a decentralized network that allows users to create, transfer, and trade multiple types of cryptocurrencies.
Start of Stellar
Founded in 2014, they launched it in 2015 with a mission to connect financial systems around the world into one network. As with other blockchain platforms and exchanges, the technology of They distributed Stellar across many multiple servers. This means that they do not track activities running on Stellar from a single source.
Stellar started in 2014 after leaving the Ripple platform, which Jed McCaleb founded to create a new financial system. McCaleb and former attorney Joyce Kim announced the launch of the Stellar platform as a platform for general users. In less than a year, Stellar had registered nearly 3 million user accounts. Since then, Stellar has created an affiliate network that includes Flutterwave and Moneygram.
Fiat and cryptocurrencies are also available on the Stellar platform, but they also have their own digital currency known as the Lumen, or XLM, which serves as the backbone of the Stellar network.
Traders commonly use Lumens as payment for transaction fees on Stellar. For example, if you send a payout in US dollars to a payee in Mexico, Stellar can convert the payout to lumens and the receiver can receive the payout in pesos. The entire conversion takes only seconds, so you can easily send and receive money anywhere in the world.
At the opening, they distinguished the platform’s own as Star, then later they changed Stellar to Lumen, but many users prefer the original and are still using the term Stellar. Also, while the use of Stellar and Lumens can be interchangeable, Stellar is the platform itself. The platform uses Lumens, or XLM, as a cryptographic asset.
Ripple and Stellar
All the users who have used both Ripple and Stellar have noticed the similarities between the two platforms. They use almost the same blockchain code that does not allow mining. Both use a distributed ledger and offer almost free and instant transactions. This similarity is mainly due to the fact that McCaleb, one of the founders of both platforms, knew he was using Ripple well and brought that vision and knowledge to create Stellar.
Platforms serve quite different purposes. The creation of Ripple was to allow banks to send money worldwide in seconds at a low cost. This has made banks and the financial system more efficient. They created Stellar, on the other hand, for casual users and users from developing countries. The platform provides access to the global economy through simple, fast, and affordable transactions. Ordinary people can use Ripple and banks can use Stellar, but each is designed to provide a more efficient experience for specific users in their target market.
Stellar has destroyed half of the Lumens and has no plans to make more. This may call into question the investment potential, but it is important to understand that there will be few coins in the future. Rarity increases the value of all items, as is the case for lumens that still exist. The potentially increased value makes XLM an excellent asset to buy and hold.