What is Stellar Lumens?
Stellar Lumens (XLM) is the native cryptocurrency of the Stellar network which offers real-time, peer-to-peer, decentralized fund transaction, especially aimed towards international transfer and micropayment markets. People often use the terms Stellar, Lumens and Stellar Lumens interchangeably. Like bitcoin, the Stellar Network is an open-source protocol for value exchange and is supported by a non-profit organization known as the Stellar Development Foundation.
History of Stellar Lumens
Stellar was launched by Joyce Kim and Jed McCaleb, the founder of eDonkey and board member of Ripple (XRP) until 2013. Presently, the Stellar Development Foundation is the final authority for all matters regarding the Stellar Network. The idea was first conceptualized by McCaleb in 2014 and its corresponding white paper was released in April 2015. The network became public in November 2015.
Corporate partnerships with the Stellar Network have been formed in India, the Philippines and west Africa. The Praekelt Foundation and Oradian were two of the first prominent organizations to employ the Stellar network.
Initially, Stellar was built upon the Ripple protocol, but citing a flaw in the protocol, its developers moved it to a completely new coded blockchain, written from scratch.
How Stellar Lumens Works
Stellar works the same as any other cryptocurrency. The user can initiate a transaction with two pieces of information: the wallet address of the receiver and the amount to be transferred. The information is processed by miners of the network who validate the transaction and added to the Stellar blockchain. The amount transferred is then deducted from the sender’s account and added to the receiver’s account.
Stellar also offers an integrated, distributed exchange for inter-currency conversions. Thus, the sender can send in any currency and Stellar will convert the amount to the desired currency while crediting the receiver.
Why Should I Buy Stellar Lumens?
Stellar focuses on micropayments, mobile banking and global remittances. some of its core features include:
- Fast Real-time settlements: Stellar offers transaction confirmation within 2-5 seconds. This is very swift compared to bitcoin and many other coins.
- Automatic currency exchange: Stellar uses the integrated distributed network to convert between currencies in real time. The algorithm is set to find the best exchange rate being offered on the network at any time.
- Great for micropayments: Lumens ask for a very low fee of $.01 for transactions up to 600,000. With Bitcoin, this can go up to a few dollars.
- Integrated Wallet: Stellar offers an integrated wallet which can handle many network tasks such as sending/receiving payment and maintaining credit balances in different coins.
- Native Currency: Stellar has Lumens as the native currency of the network which is widely recognized, easily tradeable, and can be used to pay for transactions.
- Mobile Money Solutions: Stellar and its API offers allows mobile money operators to interconnect different banking systems via custom-built applications. For instance, one mobile money gateway can be built for interoperability of multiple mobile money wallets.
- Regulatory compliance: Stellar conforms to every regulatory compliance, making it acceptable and legal everywhere around the world.