In July 2018, Stellar ranked as being 8th on cryptocurrencies and this is in terms of market capitalisation. Lumens, or XLM really are the native assets of the network and it is incredible to see how far it has come in the last few years. In Genesis 2014, XLM created 100 billion tokens and they have no limit in terms of how much they can supply. Instead, you do have a fixed 1% inflation rate. This happens every single year and it also has the lowest trading price for the first half of the year 2018 as well. Stellar has been on the exchange since August but it wasn’t until May when it started trading for more. Ethereum started their own mainstream journey at the time and a lot of the altcoins on the market lost their value at the time. Stellar then conducted an airdrop which gave a lot of XLM to Bitcoin holders. This lead to a significant drop in the Lumen’s price and a lot of people started to sell the coins that they had received. What followed from this is that Stellar had a serious correction and in 2017 it was trading for less than 0.01 USD. A new pump then started out and this brought the price from 0.035 USD to 0.93 USD. This happened in January and this is an all-time high for Stellar. Stellar was released onto the market in July 2014 and the fork of Ripple protocol came soon after. Jed McCaleb worked to create this and he did it with the co-founder of Ripple. The former lawyer Joyce Kim also played a part as well. All in all, Stellar really is an internet-level protocol that makes cross-border payments easier and faster than ever before. The currency is known as the Lumen and it actually came from Ripple. This means that it serves a very similar purpose. They do have some technological differences and the main reason for this is because it serves a very similar purpose. The problem here is that it does have some technological differences. The main reason that lead to the creation of Stellar Lumens itself is that McCaleb had a philosophy in mind but the odds were that the remaining members of Ripple weren’t fully on board.
Stellar’s own goal is to try and ultimately change the way that the payment system in the world works. It would be great if currency was able to move across the border quickly, and it would also be great to try and save money by doing this as well. The best thing about Stellar Lumens is that it is able to do this for a fraction of the penny. It not only provides a solution to those who work in banks, but also those who work with others directly as well. Stellar aims to achieve this by solving a couple of problems. Stellar has the aim to solve four main problems. This is the cost of digital transactions, the currencies/assets, the scalability and the interoperability. Stellar Lumens wanted to solve the problem that comes with double spending. It does this by transmitting data, or the value of data in a digital form. At the end of the day, it isn’t hard for Stellar to try and solve this problem and this is all because Satoshi Nakamoto invented the BTC. Bitcoin introduced to the world a public record and so if someone was to try and have 100 USD in their wallet and they try and send this to two people then the second transaction would not be accepted.
Bitcoin does not have a solution for the three other challenges. Stellar, on the other hand is able to solve them. Today’s process of cross-border transactions between a lot of people is in fact, very complicated. This is because you have different payment networks and you also have the fact that these don’t interoperate either. This can lead to all kinds of friction and it can also lead to a ton of delays as well. You need to get the help of a digital representative and it also means that one can quickly be converted to another. Banks are responsible for this and they do have problems during the second part of the job. This makes fast and even cheap transactions between different currencies, more than possible.
For example, you can easily have hundreds of dollars tied to an anchor and they can also put a tokenised version of a hundred dollars on the network. People can easily pass this around like a currency and when this brings about an anchor, it will provide a token bill to anyone who brought it to them. Payments on the Stellar network are all processed in 3 seconds and the fee is so small that it can give you a serious advantage when compared.
Stellar has a concept and this is done in terms of a distributed exchange. This is done to make things interoperable and what it gives you the chance to do is if you want to send money to another country, you would go through the distributed order book. This is all built into the Stellar Network and this easily makes the whole thing happen in way less time, plus there is no volatility risk.
Solving problems like this won’t mean much if you don’t have a system that is scalable. So how does Stellar Lumens solve this problem? The have their own technology and this is known as being SCP. The goal of this is to try and determine the way that the world sees these types of transactions. They can also find out if it is valid or not. The key properties will be discussed in greater detail later on, but it is a decentralised and it also has a very low level of latency as well.
Lumen are a cryptocurrency and just like BTC it has been very successful ever since it started out. Lumens have the assets of a network and in 2015 it was renamed as being XLM rather than STR. This is all because the owner wanted to distinguish it from the non-profit organisation.
XLM works hard to try and serve two different purposes. First, every single payment that is made, a minor base fee is initiated. This is to try and prevent spam transactions. The funds from the base fee are then added to the inflationary pool. XLM also acts as a bridge between multiple pairs of currency. This is however, only possible if there is enough liquidity between the currency of XLM and the other currencies that are involved.