What is Stellar

Stellar is a cryptocurrency developed in 2014 with a utility similar to Ripple. It’s interesting to know that Stellar is actually a fork of Ripple. Jed McCaleb, Stellar’s founder was one of the early developers of Ripple who had some conflicts with other developers. He finally left Ripple and started working on Stellar. Of course, there are two big differences between Stellar and Ripple. First, Ripple aims to facilitate global transactions between banks, but Stellar aims to facilitate global transactions between individuals. Second, unlike Ripple, Stellar is not based on blockchain. By the way, these two networks use almost similar processes for achieving their goals.

XLM is Stellar’s native coin. 50 billion units of this coin exist that are being released gradually. Each transaction in Stellar only has 0.0001 dollars of fee and is done in less than 6 seconds. XLM is not mineable and has been created by the company. Stellar calls itself an open-source distributed foundation for making payments. In this article, we are going through Stellar and XLM, and try to answer your questions about this famous network. Stay with us.

What is Stellar and how does it work?

Stellar is more than a cryptocurrency. It is a network for making global payments in a distributed way. Stellar uses foundations like banks and financial institutions to investigate its payments. The foundations are called “Anchors” in Stellar’s literature. Anchors are trusted institutions that work like communication bridges in the Stellar network.

To better understand how Stellar works, imagine you are in the US and you want to send 100 Euros to your friend in France. Using Stellar, you can send the dollar. This amount of dollars will automatically change to Euro in France and will be delivered to your friend. Stellar has servers throughout the world that create a ledger as a whole. This ledger records all transactions belonging to different individuals and companies. So, a copy of the global ledger exists within each Stellar server. Any company or organization can join Stellar and develop a server. The more servers the network has, the more secure it will be. To validate the transactions, servers communicate with each other. They update the ledger every five seconds. This is Stellar’s consensus process.

In Stellar, every user has an online wallet. When you send money, you are actually sending credit to this online wallet. Stellar also has a decentralized exchange that changes different currencies to each other with the least amount of fee. This is all done in a few seconds.

XLM token

Stellar’s native coin is called Lumen, and its trading sign is XLM. At the time of writing, each unit of XLM is being traded at $0.11. Its all-time high goes back to 2018 when its price reached $0.89. As we previously mentioned, XLM has a supply cap of 50 billion units. Nearly 25 billion units of this supply have been released and are in circulation. It is also the world’s twenty-fourth-largest cryptocurrency by market cap.

XLM wallets

There are some exclusive digital wallets that you can use to store XLM. These wallets include:

 

  •  Stellar’s official desktop wallet
  • Stargazer (mobile and desktop)
  • Centaurus (mobile)
  • PapayaBot (Telegram Bot)
  • Ledger Nano (hardware)
  • Conclusion

As you have figured out, Stellar has aimed at a very important issue, and that is “global payments”. Individuals and companies have always sought easier ways of making global transactions, and they always welcome new more efficient solutions. Maybe this is one reason for Stellar’s popularity. But we shouldn’t forget that Stellar has a strong rival like Ripple. Do you find Stellar’s future more promising than Ripple’s, or do you think it can surpass Ripple in terms of popularity? Share your opinions with us.