The market for Stellar Lumens is growing as seen in the last few days after the IBM head of blockchain development revealed that Stellar Lumens is now live on the IBM blockchain. What are the other Reasons for XLM’s latest upsurges and what is the outlook for 2018?
4 April, AtoZForex – Not so long ago, one of the most widespread questions in the crypto community was: “Will Bitcoin form the future?”. Now, the question is no longer pending, because Bitcoin has already opened the future powered by Blockchain and revealed itself in full measure.
Of course, the first cryptocurrency is anticipated to reach new highs down the road, and 2018 is going to be the year of new discoveries, in particular, significantly improved and renovated blockchains. Most importantly is that now it’s not a white paper with promises but actually working networks that operate today. One of them is Stellar. In fact, it’s not just up and running, you can actually buy Stellar Lumens on a number of various exchanges even today.
What is Stellar, at a glance?
To start with, here are three main facts you should know about Stellar, before going in for a more thoughtful insight:
1. Decentralized payment network
This is what Stellar basically is — a decentralized payment network, like Bitcoin. However, it’s more flexible and much more scalable:
- Network fees. It has almost none. Conducting a transaction, all you pay is a fraction of a fraction of a penny. More than that, this fee doesn’t go to creators (Stellar.org is a non-profit organization) or miners (the network doesn’t have miners at all; transactions are verified through Stellar Consensus Protocol). Neither, these fees are burnt (like in the case of Ripple). They go to a so-called fee-pool and are distributed among holders through inflation voting. Fees solely act as an anti-spam mechanism.
- Freeze unwanted transactions. Of course, like with any other blockchain, transactions are irreversible, but with Stellar, you have an opportunity to freeze funds that are mistakenly sent.
- Transfer credits. In Stellar, credit is any external money (USD, EUR and even tokens of Bitcoin) that you can freely send by means of anchors aka gateways.
- Transfer native digital currency, which is …
2. Lumens (XLM)
This is an internal token of the Stellar network — the cryptocurrency you buy on exchanges. By now, Stellar Lumens token has proved to have a high investment potential. Although, the initial attention was drawn to Stellar from the perspective of a decentralized payment network rather than its Lumens token. For this reason, XLM is mostly traded against other cryptocurrencies and not against fiat money.
According to coinmarketcap, CEX.IO is probably the only major cryptocurrency exchange for now, where you can trade XLM against fiat currencies, namely USD and even EUR. Of course, it includes XLM/BTC trading as well. Considering the fact that CEX.IO accepts credit card deposits and withdrawals, you basically have an opportunity to acquire Stellar Lumens token with your bank card.
3. Decentralized exchange
Besides payment processing, Stellar provides another very important feature for its users — exchange of funds. For example, you need to send some Euros to someone located in another part of the world but you only have a USD account. In this case, Stellar will provide a seamless conversion for you. That is to say, it will exchange your Dollars to Euros at the lowest cost at the time of the transaction process.
What are anchors on the Stellar network?
Anchors, also called gateways, are trusted entities that are responsible for the processing of any exterior funds (USD, EUR, GBP, etc). They act as a bridge between the digital decentralized network of Stellar and the real (physical) world. This makes them similar to centralized payment systems like PayPal or Swift.
The main difference here is that, generally, you cannot send money from a PayPal account to that of Swift. But in the case of Stellar, these “Swifts” or “PayPals” exist within one system. So, it doesn’t matter what entity you have an account in and what currency you hold in there. You can transfer all kinds of money to everyone who’s in with Stellar. On top of it, every Stellar transaction is processed within 3-5 seconds.
The market for Stellar Lumens is growing — Reasons for XLM’s latest upsurges
After having considered all the technical aspects and functionalities of Stellar, we move to its ‘financial part’. To be precise, we’ll consider the reasons of Stellar’s success, basically the news that positively affected the price of Lumens.
- Stripe company refused to work with Bitcoin and claimed to work with Stellar. Stripe is an online payment company. Giving up on Bitcoin due to high fees and long transaction confirmation times, Stripe announced that they consider Stellar as a proper renewal. Lumens’ price surged to almost $0.60 once this news
- $39-million-cost ICO was provided through the Stellar network. Besides the above-stated features, Stellar is also suitable for building smart contracts on top of it. Mobius ICO set the record as to the amount of money raised for just two hours of it being carried out. The co-founders’ decision was related to the fact that “Ethereum protocol is too expensive, too slow and too insecure”.
- SatoshiPay quitted Bitcoin in favour of Stellar. A company focused on providing micro payments (nano payments) integrated Stellar in their processing system due to the same reasons. Bitcoin is slow and cost-intensive, while Stellar is fast and free. “We are very glad to work with Stellar, it is secure, low-cost and fast” — Meinhard Benn, Founder and CEO of SatoshiPay.
This is the photo from the conference; Meinhard Benn, Founder and CEO of SatoshiPay.
- IBM assists Stellar in moving money across borders. It was one of the first cases when people actually realized that today you don’t need to wait for 2-7 working days in order to have your cross-border payment Thanks to the Stellar Lumens implementation into IBM’s blockchain, the payments can be done much faster.
Stellar Lumens in 2018
Price prediction for Stellar Lumens would be a great conclusion of the article. The problem is that only God knows all the highs and lows Stellar Lumens will experience in the following year. The only thing we know for sure is that Stellar is in an extremely favourable position today.
Concepts like Blockchain and cryptocurrency are gaining traction and in 2018 will expand from ‘something new’ that people use to ‘something new’ that governments and major companies implement. And while crypto newcomers opt to invest in strong brands like Bitcoin or Ethereum, enterprises and regulators make the decision in favour of higher efficiency and lower expenses. This is what Stellar offers today.
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