πŸ”₯ Stellar Lumens Wiki - XLM course, cryptocurrency & more!

It is predictable that crypto currencies often declare that they make the world a better place. Stellar Lumens (XLM) got a lot of people excited, but is this crypto project living on the hype? We'll explain what Stellar (XLM) is, what it does, and give our verdict on whether it's worth supporting.

What is XLM & Stellar?

Stellar Lumen XLM Coin Logo

The first thing to know is that Stellar is the network and a Lumen is a digital currency that is used in this network. Lumens are also known as XLM. This is how it looks today. Like cryptocurrencies like Bitcoin, lumens (XLM) are the units of value that are traded within the network. This enables Stellar users to transfer values ​​worldwide and switch between different fiat currencies quickly and securely.

The Stellar Network was launched in 2014 when the co-founder of Ripple Had ideological differences with the rest of the Ripple team. Jed McCaleb disagreed with the centralization of Ripple and decided to part ways and start the Stellar Project.

2014 was a long time ago for the cryptocurrency, and the Stellar network started with 100 billion Stellars and re-used a large part of the Ripple code base. This essentially made the project a fork of the Ripple code. Fortunately, Jed decided in 2015 that having a network called Stellar and a currency called Stellars was confusing. This led to the currency being renamed Lumens to better distinguish it from the Stellar network and the Stellar nonprofit.

Given the origin of the cryptocurrency, there has been a lot of confusion as to whether the cryptocurrency is just a renamed clone of Ripple. So much so that Jed took to Twitter in late 2017 to explain that the code for the Stellar Network was completely different from Ripples.

Jed McCaleb Twitter Post
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What problems does Stellar solve?

In a nutshell, Stellar Lumens is about bringing everyone access to critical financial services and creating a more integrated digital economy. What most people don't know is that from the 7,8 billion people on the Earth about 2 billion don't even have a bank account. 

At first glance, not having a bank account doesn't seem like that much of a problem. Couldn't people just use cash or open a bank account if they wanted to too? Actually, it would be wrong to think that way. For regulatory reasons, banks need numerous documents to open an account. In many developed countries, people simply do not have the identification or verification documents required to open a bank account.

Without a bank account, access to credit is virtually impossible. This is a major downside considering that the housing market is built on debt. Most business owners also need credit facilities to get their business off the ground. Indeed, the lack of access to banking services stifles innovation and job creation in the local economy.

Whether you agree or not, we live in a much larger and globalized world. Cross-border payments are common and many businesses couldn't function without them. In fact, an entire industry has sprung up that transfers money from one country to another. These global remittance companies are almost demanding from people 10% fees to send money back to Africa. Many developing countries really rely on cross-border remittances for their own local economies. Remittances account for 27,1% of total GDP in Liberia.

Stellar XLM offers a different route: a platform that is fully supported on mobile devices and whose fees for cross-border transactions are only one ten-thousandth of a cent.

‍

How does Stellar Lumens work?

Stellar believes that "a global financial network open to everyone" is necessary. Therefore, the Stellar Network is open source and can be freely modified by anyone. XLM aims to fill the void in the financial system by connecting people, institutions and payment systems through the platform.

The team focuses on making cross-border transactions cheaper, faster and more reliable than before. As with many cryptos, Stellar Lumens is decentralized. The idea behind this is that no individual person or company should be in a position that allows them to abuse their power. This ideology has resulted in the Stellar network running on a network of decentralized servers supported by an international association of individuals and companies. These decentralized servers support the distributed ledger that records all data and transactions on the XLM platform. This means that nobody has overall control over the network.

In short, the Stellar Network works in a similar way to PayPal. However, it's much cheaper, flexible, and unlike PayPal, it doesn't require a user to have a bank account. Instead of uploading funds from a bank account, XLM users upload funds to an anchor on the network. This anchor is where your money is stored and where the credit is spent on your virtual wallet.

What is a β€œstellar anchor”?

Anchors have two simple functions: they take the deposit and issue the corresponding credit to the account in the Stellar Network, so that the user can make a withdrawal when he brings the credit to the anchor. In order for this whole process to take place, you need to trust that the anchor is honest with your deposit and withdrawal balances. Think of it like a decentralized PayPal for cryptocurrency.

When users upload funds to the anchor, they are converted to lumens and recorded in Stellar's public book. This integration allows users to send funds over the network instantly without having to wait for a bank transfer.

It also facilitates cross-border payments. For example, if you were in the US and wanted to send money to your friend who lives in Germany, you could easily use your USD balance on your Stellar account to transfer funds over the network.

Stellar would automatically convert the dollars to euros at the lowest exchange rate and credit the exchanged EUR to your friend's account. Once they receive the money, your friend can withdraw the money from an anchor that supports Euros.

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Decentralized Stellar XLM network

Most cryptocurrency platforms promise decentralization, and Stellar Lumens is no exception. The decentralized Stellar system consists of employees who are able to work autonomously and independently of one another. Due to the decentralized system, the transmitted data is distributed over a network of servers instead of being controlled by just one central source.

This means that the network does not depend on a single person or company. Since there are a number of servers that work independently of one another, the system continues to run even if some of the servers are down or go offline. This decentralization enables faster transactions.

The consensus algorithm

The Stellar servers communicate and synchronize with each other to verify the transactions and ensure that the transactions are valid and successfully entered into the global ledger.

For example, if you want to send $ 10 to someone on the same Stellar network, the trusted servers start a process to synchronize with each other and agree on the validity of your $ 10 payment. All servers must agree that they have $ 10 worth of credit on the network before validating your transaction.

This is called the servers that come to a consensus, and the whole process takes about five seconds. The consensus also leads to faster and cheaper transactions compared to mining.

Use Stellar Lumens

A nominal transaction fee is charged for using the Stellar platform. This is known as a base charge and is designed to deter malicious users from making multiple transactions over the network (known as a DoS attack). The basic fee is currently 0,00001 XLM, which is just one ten-thousandth of a cent. Try to undercut these for a cross-border transaction fee.

The fee is paid by the sender of the transaction. Unlike most other cryptos, the basic fee is not used for winnings. The fee is collected through the ledger and redistributed in the course of inflation.

It should be noted that Stellar transactions are irreversible, but it is possible to freeze the assets issued. Once frozen, the assets become worthless to the user and are returned.

Apart from that, the network takes steps to reduce risk with the means of this decentralized structure. If Stellar.org, the non-profit organization, ceased to exist, transactions would continue to be confirmed on the Stellar network and the anchors would integrate into the network.

Data protection is a hot topic in cryptocurrency. Remember that all transactions on the stellar network are public and recorded on a global public ledger. Since the platform is open source, anyone can view the network and make changes to it. That means if privacy is important to you, then XLM is probably not the crypto for you.

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How is XLM used?

The Stellar Platform was built to bring important financial services to a greater number of people around the world. According to Stellar, companies like Deloitte, Parkway and Tempo are building "innovative services" on the network. Some of the uses of the Stellar Network are:

Lower micro payment costs

Small money transfers add to the fees and expenses. The platform helps to reduce the costs for micropayments by up to 40 percent. Since Stellar is based on consensus, not mining, transactions are faster and cheaper. Not only do users enjoy lower transaction fees, each transaction takes a maximum of five seconds.

Transfers

Sending money from one country to another used to be quite a hassle before services like PayPal came along. However, these services come with high fees and the process often takes several days. Banking the unbanked is an important prerequisite for higher transfers. For example, many African migrants and Bangladeshis work in the Middle East.

However, because these migrant workers come from poor regions and are poorly qualified, they are not well paid. This poses a major problem for them when making remittances to their home country or village through various illegal tax evasion systems.

These migrants do not have bank accounts and most of the commercial banks in these countries do not have the necessary infrastructure to service remote regions. Sending money to countries like Liberia has the highest fees. This is a big problem that cryptocurrency aims to solve.

With a platform like Stellar, you can now send money to and from any country in just five seconds for a fraction of a cent. These inexpensive payments can be sent between different fiat currencies or between fiat and XLM. Either way, you get fast, secure transactions between any region at a very low cost.

Mobile money

With the help of Stellar you can connect multiple mobile exchanges / platforms with each other. If you're a business, your customers can easily send mobile money to recipients with multiple providers. In fact, you can even expand your retail business over the network without incurring any overheads.

Introduction of ICOs

Initial Coin Offerings are a popular means of creating decentralized applications and promoting a new cryptocurrency. Some of the existing Stellar ICOs are Everlife, Ternio, Slice and Smartlands.

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The founder

Jed McCaleb, an American programmer and entrepreneur, founded both Ripple in 2011 and Stellar in 2014. McCaleb left Ripple in 2014 after disagreements with the board of directors over the direction of the project. In the beginning, he relied on the Ripple protocol at Stellar, but then adopted the Stellar Consensus Protocol in 2015. McCaleb is the project's chief technology officer. Jed has already launched two top ten cryptocurrency projects, and that speaks volumes for his family tree. We certainly wouldn't bet against him to be successful.

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Should You Invest in XLM?

Pros

  • Stellar offers a very real solution to the global remittance problem.
  • Financial connections and the ability to send payments across borders is what drives the world economy. The project opens the doors to participation and the opportunity to create added value for the world's two billion people without a bank account.
  • Mobile usage is massive in developing countries, where people even prefer phone loans to food purchases. The widespread use of mobile devices makes mobile money a very real possibility. This in turn should open up new local business opportunities.
  • Large companies like Deloitte and IBM see great potential and added value in the Stellar Lumens project and use the network to create digital solutions.
    We live in a globalized world. Transfers of value across borders are likely to increase over time. Therefore, it is becoming increasingly important to find a low-fee method for low-fee transactions. Fortunately, Stellar could well be the answer.
  • Like Ethereum, Stellar can launch ICOs on its platform. You can have items from both Ethereum and Ripple in a single cryptocurrency via XLM.

Cons

  • Transactions over the network are public and can be viewed by anyone. That means, if you are a privacy advocate then Stellar is not the crypto for you.
  • The project is not fully decentralized at the moment.
  • XLM is trying to achieve a lot and it will take time. Investors will need patience if they want to see the project meet its potential and achieve its vision.
Stellar Lumen XLM Coin Course Development


How can I buy XLM Coin?

In order to participate in this project, you have to buy the XLM-Coin. We'll show you our best ways to Buying Stellar Lumens via our detailed guide.

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‍

The conclusion

Stellar Lumens is already used or is currently being built on by various large companies around the world. However, the main focus of the platform is on empowering the average person who has been excluded from the traditional financial system.

Indeed, Stellar has the potential to correct many of the grievances imposed by the banks. Many people would agree that everyone has the right to work their way out of poverty and that they should have the opportunity to add value. Traditional financial institutions have created a system in which they have deprived two billion people of this opportunity. Instead of helping, they have focused on exploiting the weakest with high fees.

XLM offers a different route. A world of financial inclusion. An integrative platform that is open to everyone and offers fast and inexpensive cross-border payments. Ripple is widely viewed as a method that banks can use to save money and increase their profits. While Stellar is about unlocking the potential of people around the world.


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Thomas Cormik

Thomas Cormik started out with the sole focus on educating his readers about Bitcoin and its potential impact on traditional financial systems. Thomas prides itself on bringing quality content to the masses under the Bitcoin-News.one banner.

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