What is cryptocurrency Stellar (XLM) and how does it work?

What Is Stellar (XLM)?

At times, you may see Stellar referred to as “Stellar Lumens”. This is actually a common mistake – Stellar is the network, while Lumens are its unit of cryptocurrency.

The Stellar Network is a decentralized peer-to-peer framework, and Lumens (XLM) is the token that powers it.

The idea behind Stellar is that anyone using its service could transfer everything 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 acts as a decentralized network of servers on the blockchain, with each server running independently. This means that each node is interconnected, but not monitored by any central source. The network allows transactions by syncing and reaching a consensus, thus allowing the ledger to be distributed widely and evenly. Anyone is allowed to become a verification node (server) with the Stellar Core, and can do that by 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, such as Bitcoin. The network is also theoretically more decentralized as it uses an interesting feature known as “anchors”.

Anchors represent trusted entities that can be in charge of peoples’ deposits and hand out credits into the blockchain. The anchors function as the bridge between different digital assets and the Stellar blockchain.

Who Are the Founders of Stellar?

The person who created Lumens and 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 was the Chief Technology Officer (CTO) of Ripple, the company that is most prominent in the development of the XRP Ledger. However, he left the project in 2013 when he created Stellar.

Other than McCaleb, other notable figures in the XLM ecosystem include David Mazieres (creator of the Stellar consensus protocol), Denelle Dixon (SDF’s Executive Director and CEO), as well as Joyce Kim ( co-founder of Stellar and former Executive Director of the SDF).

What Makes Stellar Unique?

Stellar’s uniqueness comes from its full-package “deal,” as the cryptocurrency possesses features such as:

• Complete decentralization
• Ease of use
• Support for multiple currencies and asset types
• Fast, nearly free transactions

What Gives Stellar Value?

While Stellar has first rolled out with the intention to have a 1% inflation per annum, its economy changed over the years.

As of late 2019, the 1% per year subsidy is no longer in force, as Stellar users voted in favor of ending the programmatic supply increases. The Stellar Development Foundation also took steps to regulate the XLM economy that year by choosing to reduce its share of the XLM supply.

In addition to its finite supply, Stellar derives value from the use cases it currently has – as well as its ability to transfer digital assets across borders cheaply and efficiently.

How Many Stellar (XLM) Coins Are in Circulation?

At launch, Stellar issued 100 billion Lumens (XLM), with the total supply increasing 1% annually until 105 billion were in circulation. However, after 2019, this number dropped to just over 50 billion.

XLM also burns 100 Stroops (0.00001 XLM) every time a transaction is made. This helps prevent bad actors from spamming the blockchain with void transactions.

Other Technical Data

Stellar reached its current all-time high of $0.889 in January 2018. Though its price has struggled since, especially in the overall market conditions seen after the burst of the crypto bubble, XLM is now rising in price and slowly gaining momentum as the crypto sector gains more popularity.

How Is The Stellar Network Secured?

Stellar’s network is fully decentralized as anyone can become a validator node, thus making it very secure. On top of that, the project solved the main problem of many zero-transaction blockchains – void transaction spamming – by implementing a minuscule fee for each transaction.

How To Use Stellar

The strength of XLM lies in the Stellar network, which developed partnerships all around the world. The platform has even been integrated with Samsung Mobile, with its partner list including the likes of IBM, Stripe, Wirex, SureRemit, Smartlands, etc.

Stellar XLM

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Bitcoin BTC

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Ethereum ETH

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How To Choose a Stellar Wallet

Stellar is a large, well-known cryptocurrency that is supported by many different wallets. Each user, depending on their needs, must determine the wallet that’s 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 you with enterprise-grade security and user-friendly functionality.

Buying and selling XLM, or exchanging them for any other cryptocurrency, is done in mere moments when you choose our secure platform as your storage solution.

Stellar Mining

Due to a fixed total supply and the maximum amount of XLM already in circulation, Stellar does not have any form of mining or staking.

Conclusion

Stellar is a cryptocurrency that tries to act as a cross-border payment system for any digitized asset or currency. Most people look at it as a decentralized XRP aimed towards consumers, rather than institutions.

Stellar FAQ

How Is Stellar (XLM) Different From Ripple (XRP)?

Stellar is a network very similar to XRP, both in terms of use case and the person who founded them. Both of these digital currencies were created by Jed McCaleb. McCaleb has, after leaving Ripple, taken more of a bottom-up approach with XLM, rather than the top-down approach of its predecessor.

In essence, XLM is a decentralized, permissionless, peer-to-peer cross border-payment version of XRP.

Is Stellar (XLM) Anonymous

Stellar transactions have a certain level of anonymity, but are not anywhere near privacy coins’ anonymity features. Therefore, it can be put in the same category as Bitcoin, as it is pseudonymous rather than anonymous.

Do I Need To Wait for Confirmations When Sending or Receiving XLM?

No, the transactions are almost instantaneous and don’t require multiple confirmations to become valid. An average Stellar transaction is cleared in around 5 seconds.

How To Buy Stellar

Buying XLM is as easy as visiting the Kriptomat how to buy Stellar page and choosing a method of payment

How To Sell Stellar

If you already own Stellar and hold it on a Kriptomat exchange wallet, you can easily sell it by navigating the interface and choosing your desired payment option.

Stellar Price

The current Stellar price is EUR.
The 24-hour trading volume of Stellar is EUR. Stellar is currently ranked of all cryptocurrencies by total market capitalization, with a market cap of EUR. It has a circulating supply of Stellar.

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