What is Stellar (XLM) How it Works & Where To Buy It?

Stellar (XLM) is a decentralized payments network that is open-source. Its native XLM token is used to power the network, pay for transactions and serve as the utility token of the Stellar ecosystem.

The Stellar network is an innovative blockchain network that positions itself as a blockchain-based payments processing solution.

Stellar Lumens (XLM) is currently the 29th largest cryptocurrency in the world by market cap.

 

How Stellar (XLM) Works

The Stellar network provides users and companies with an affordable, and efficient way to transfer any currency.

Its unique Stellar consensus protocol is at the heart of this process. Essentially, any digital currency can be transferred using the Stellar network. The native utility token, XLM, is used to pay for transaction fees.

The blockchain-based network ensures that the capacity of transactions, speed of transactions, and affordability of transactions are optimal.

This has positioned Stellar, which was founded in 2014, as a powerhouse alternative for payment processing – improving old financial systems through blockchain technology.

Additionally, users seeking to understand how Stellar works, can also earn certain rewards for locking up their XLM tokens for a certain duration.

The unique Stellar consensus protocol acts as a distributed ledger that is neither proof-of-work nor proof-of-stake – it’s more similar to the ledger XRP utilizes to finalize transactions. Individuals can refer to the Stellar whitepaper for a more in-depth overview of the innovative protocol.

The XLM cryptocurrency has fast grown to become the 29th largest cryptocurrency in the world by market cap.

 

What Is Stellar (XLM) Used For?

The Stellar network is used for facilitating payments around the globe. Any digital currency can be sent quickly, across the globe – for a nominal transaction fee.

The XLM token is used to pay for transaction fees, giving the token core utility in the processing of payments.

Additionally, anyone can use Stellar software and become a node that adds to the network security. Stellar provides an alternative to the world’s financial systems, which are archaic, congested, and inefficient.

Stellar users can also use their XLM tokens in innovative ways to earn rewards – some exchanges offer staking rewards and rewards for liquidity provision.

The Stellar blockchain is the infrastructure that makes all of the payment processing possible.

 

Where To Buy Stellar (XLM)

Stellar (XLM) has recently risen in popularity and its trading volumes on exchanges have seen a significant surge in the past few months. XLM has quickly grown to become a well-known cryptocurrency. It is also the 29th largest cryptocurrency in the world by market capitalization.

XLM tokens are commonly available and frequently traded on most centralized crypto exchanges. Before you’re able to purchase XLM, you’ll need to deposit fiat money onto an exchange, and sequentially XLM tokens will be credited to your XLM digital wallet on the exchange.

The crypto exchanges below are the safest place where you can buy, sell and store XLM tokens.

Five of the most popular crypto exchanges are:

1. Binance (US Customers use Binance.US)
2. Gate.io
3. Coinbase
4. KuCoin
5. Bitfinex

All of the above exchanges allow users to buy, sell, transfer and store XLM tokens in a digital wallet on the exchange. You can use your debit or credit card to purchase XLM tokens on centralized exchanges.

How long has Stellar (XLM) existed?

The Stellar payment network was launched on March 31st, 2014. The network has grown extensively since then and the nonprofit Stellar development foundation has tied up partnerships with major brands including IBM.

IBM uses Stellar as its universal payment solutions provider.

Jed McCaleb (co-founder of Ripple) is the founder of Stellar, and he has become a notable figure in the crypto space.

What’s controversial about Stellar (XLM)?

The crypto market is fast-growing and new crypto projects are being introduced to the market at a rapid rate. It’s essential to do diligent research into crypto projects, and gain as many insights into the project, its history, tokenomics, team, and partnerships. The more you research, the more calculated your decisions will be.

Let’s take a look at the top two controversies surrounding Stellar (XLM)

• Token Burns – In 2019 Stellar XLM executed a controversial token burn which significantly reduced the supply of XLM tokens. A token burn of 50 billion XLM tokens (50% of the supply) was initiated, which had an enormous effect on the price of the token.

  The XLM price surged but the surge was short-lived. Although a large chunk of the supply was removed, the market quickly corrected and many users saw the burn as an irrelevant exercise.

• Jed McCaleb Is The Co-founder Of Ripple – The founder of Stellar is also the co-founder of Ripple. Ripple (XRP) has been caught up in a multitude of controversies over the years, and Jed McCaleb’s previous association with Ripple has sent alarm bells ringing in the Stellar community.

  Although Stellar isn’t associated with Ripple, many still fear that similar legal prospects might stand in the way of Stellar’s future – as they have with Ripple.

 

How many Stellar (XLM) tokens are there?

At the time of writing, XLM has a circulating supply of 24.78B XLM (50% of the total supply).

The total supply of Stellar (XLM) is 50,001,787,909.

50% of the total XLM supply was burned in 2019.

Can Stellar (XLM) be mined?

Stellar (XLM) is not a mineable cryptocurrency. XLM, unlike Ethereum, can’t be mined.

However, many individuals earn yields from using their XLM tokens to participate in DeFi applications where they can earn rewards from staking or providing liquidity.

Additionally, Stellar holders can download Stellar software and run a node to earn rewards for providing network security.

Some centralized exchanges also offer rewards for XLM holders that lock up their tokens for a certain duration.

What is the market cap of Stellar (XLM)?

The market cap of Stellar (XLM) is:

Stellar (XLM) market cap = total amount of coins in circulation x current market price of XLM

Stellar (XLM) Market Cap = 24.78B XLM x $0,1939 = $4,80 billion (29th largest market cap)

Stellar (XLM) has been around since 2014 and has garnered significant investment and credibility in the space. It’s also seen as the biggest competitor to XRP.

It is however currently one of the top 30 cryptocurrencies by market capitalization and continues to grow in popularity as the project attracts more investment and users.

The market cap fluctuates according to circulating supply and market price.

 

Biggest Competitors Of Stellar (XLM)

Stellar (XLM) positions itself as a blockchain-based payments processing network and utilizes the innovative Stellar consensus protocol to facilitate functionality.

The biggest competitor of Stellar (XLM) is Ripple (XRP).

Both of these projects serve to provide payment processing solutions to companies and users alike.

Stellar has tied up major partnerships with various companies but its most notable partnership is with IBM. Stellar is the universal payment solutions provider for IBM (the 2nd largest IT company in the world).

However, Stellar’s market cap is much lower than XRP (currently the 6th largest cryptocurrency in the world by market cap).

What are the future plans for Stellar (XLM)

Stellar has announced that it will be focusing on remittances and providing bank loans for individuals who are unable to obtain banking facilities.

Cross-border transfers are one of the biggest necessities and bridging economies on a global scale. Stellar aims to be the preferred payments solution provider, incorporating its blockchain-based technology to optimize the current banking infrastructure.

Pros and Cons of Stellar Network and XLM Token

Pros:

• High Throughput Of Transactions – The need for scalable cross-border payments, using digital assets, has been prioritized by the Stellar network. Currently, the Stellar network can process thousands of transactions per second – at a nominal transaction fee. This makes Stellar more suited than outdated world wire providers.
• Fast Transaction Finality – Typically cross-border payments facilitated by traditional remittance providers take as long as 5 days to reflect. Stellar transaction finality can be as fast as 3-5 seconds.
• Send Any Form Of Money – The Stellar infrastructure makes it possible to send any digital representation of money or digital cryptocurrency within seconds. This makes Stellar an extremely appealing payment solutions provider to companies and users alike. It acts as one network, or a singular network, that facilitates and finalizes transactions extremely efficiently.
• No Regulatory Body Issues – Stellar and Ripple share many similarities but issues with regulatory bodies aren’t one of them. Stellar isn’t facing any investigations from the SEC or other regulatory bodies.
• Significant Daily Use – It should be noted that Stellar is not currently integrated with merchants that allow online payments. This is important to note because even though it hasn’t used merchants, it has still processed more than 5.93 million transactions. This is indicative of how prominent a role Stellar plays in payment processing globally.

 

Cons:

• Significant Competition – Although Stellar has been around since 2014, it still faces substantial competition in the crypto space. Stellar (XLM) is currently the 29th largest cryptocurrency – its biggest competitor, XRP, is the 6th largest cryptocurrency.
• Small Team – The Stellar development foundation consists of only 117 employees. This number is significantly lower than the 548 employees Ripple currently has.

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