Stellar (XLM) is a decentralized peer-to-peer network that is often considered XRP’s main competitor, even if they offer different “flavors” of the same use case (payment). Where XRP is looking to banks, Stellar (XLM) is a form of payment designed from the ground up with the masses in mind. Fast, inexpensive everyday shopping is what Stellar excels at. Stellar’s native token is called Lumens, or XLM. Stellar is currently the 11th largest cryptocurrency by market capitalization, with a value of $9.16 billion. Interested in Stellar (XLM) but not sure what it’s all about or where to start? Do not worry. This guide is designed to teach you everything you need to know about this project and prepare you to jump into the most user-friendly trading experience available on the market.
What is Stellar (XLM)?
You can sometimes come across the term Stellar as “Stellar Lumens”. This is a common mistake: Stellar is a network, while Lumens are a unit of cryptocurrency. The Stellar network is a decentralized peer-to-peer structure, and Lumens (XLM) is the token that powers it.
The idea behind Stellar is that anyone who uses its services can transfer anything from traditional currencies to tokens that represent new and existing assets (dollars, euros, bitcoin, stocks, gold, and other tokens of value). These assets can then be traded between users with less friction using Lumens.
How does Stellar work?
Stellar operates as a decentralized network of servers on the blockchain, with each server operating independently. This means that each node is connected but not monitored by any central source. The network allows transactions to be made through synchronization and consensus, which allows for a wide and even distribution of the ledger. Anyone can become a verification node (server) in Stellar Core, and they can do so using the Stellar Consensus Protocol (SCP).
The Stellar Consensus Protocol (SCP) is Stellar’s algorithm that verifies transactions. It allows the network to scale quickly and more efficiently than most proof-of-work blockchains like Bitcoin. The network is also theoretically more decentralized, as it uses an interesting feature known as “anchors”.
Anchors represent trusted entities that can be responsible for people’s deposits and give out loans to the blockchain. Anchors function as a bridge between various digital assets and the Stellar blockchain.
Who are the founders of Stellar?
The person who created Lumens and at the same time co-created Stellar is Jed McCaleb. He is also the founder of the Stellar Development Foundation, the team of developers behind the project. McCaleb is also well-known in the crypto sector as the creator of the first major Bitcoin exchange, Mt Gox.
McCaleb served as Chief Technology Officer (CTO) at Ripple, a company that is best known for the development of the XRP Ledger. However, he left this project in 2013, when he created Stellar.
In addition to McCaleb, other notable figures in the XLM ecosystem include David Mazieres (creator of the Stellar consensus protocol), Denelle Dixon (executive director and CEO of SDF), as well as Joyce Kim (co-founder of Stellar and former executive director of SDF).
What makes Stellar so special?
- Stellar’s uniqueness comes from its full package, as the cryptocurrency has features such as:
- Full decentralization
- Ease of use
- Support for multiple currencies and asset types
- Fast, almost free transactions
What Gives Stellar Value?
While Stellar first developed with the intention of having 1% inflation per year, the cryptocurrency’s economy has changed over the years.
Since the end of 2019, the 1% per annum subsidy is no longer in place, as Stellar users have voted to end the programmatic supply increases. The Stellar Development Foundation also took steps to regulate the XLM economy in the same year, choosing to reduce its share of the XLM supply.
Beyond its finite supply, Stellar derives value from the use cases it currently holds, as well as its ability to transfer digital assets cheaply and efficiently across borders.
How Many Stellar (XLM) Coins Are There in Circulation?
At launch, Stellar issued 100 billion Lumens (XLM), with the total supply increasing by 1% per year until 105 billion were in circulation. After 2019, however, this number dropped to just over 50 billion.
XLM also “burns” 100 Stroops (0.00001 XLM) each time a trade is made. This helps prevent bad actors from spamming the blockchain with invalid transactions.
Other technical data
Stellar reached its current all-time high of $0.889 in January 2018. Although its price has struggled since then, especially in the general market conditions seen after the bursting of the crypto bubble, XLM is currently rising in price and is slowly gaining momentum as the crypto sector gains more traction.
The Stellar network is fully decentralized, as anyone can become a validator node, which makes it very secure. Moreover, the project solved the main problem of many zero-transaction blockchains – spamming empty transactions – by introducing a small fee for each transaction.
How to use Stellar?
XLM’s strength lies in the Stellar network, which has developed partnerships around the world. The platform has even been integrated with Samsung Mobile, and its list of partners includes companies like IBM, Stripe, Wirex, SureRemit, Smartlands, etc.
Stellar is a large, well-known cryptocurrency that is supported by a wide variety of wallets. Each user, depending on their needs, must determine the wallet that is right for them.
Kriptomat offers a secure storage solution, allowing you to both store and trade your XLM tokens without hassle. Storing your XLM with Kriptomat provides enterprise-grade security and user-friendly functionality.
Buying and selling XLM or exchanging it for any other cryptocurrency is done in just a few moments when you choose our secure platform as your cryptocurrency holding solution.