The cryptocurrency industry is proliferating at great speed. Just a decade ago, the world was not yet ready for the idea of a fully digital currency. Today, the situation has changed dramatically, and even cross-border transfers at the level of major financial institutions are being used for coins. One of the platforms providing this opportunity is Stellar.

Stellar Lumens (XLM) is a cryptocurrency that has been getting a lot of attention lately. The Stellar Network was designed to facilitate cross-border transfers, which also led to the development of an embedded coin.

From this article, you can find out what Stellar Lumens and XLM token are and whether it is worth investing in Stellar.

Information about Stellar
Information about Stellar

What is Stellar cryptocurrency?

Stellar is an online digital network. The platform was developed to make online transfers more convenient. In doing so, Stellar supports both digital and fiat currency transfers.

The Stellar platform team decided to use crypto technology to achieve faster and more profitable transfers. Hence, the token was named Lumen. Hence, the name Stellar Lumens is often used when referring to this cryptocurrency. The tokens achieve several goals. Namely:

  • Lumens helps increase security. 
  • The network requires a minimum number of tokens to be stored in an account to maintain activity.
  • Even a tiny amount of XLM can be used to ensure that the account remains open and usable. 

Some consider this security measure to be less than ideal. However, it still serves an essential purpose in ensuring that transactions on the network can be completed in less time and with greater efficiency.

  • Lumen was also designed as an embedded coin to help reduce the cost of transactions on the network. 

Currently, just 0.00001 XLM per transaction on the Stellar network is a fee. 

In addition, the account holder must have at least 1 XLM in their account if they want to remain active on the network. It keeps fees low and ensures that the network is not used for unwanted transactions on a large scale.

History of blockchain creation 

If you're ready to buy XLM, study the history of its creation. That way, you'll understand who you trust with your money. 

The first banking-focused blockchain startup called Ripple (XPR) was launched in 2012. The cheap and practical cryptocurrency attracted investors' attention, and many predicted a great future for it. XPR is still on the market today and is even in the top ten, but the Ripple Labs project is far from perfect, especially decentralisation. 

Blockchain engineers liked the idea of combining banks, payment systems and individuals into one platform. After Ripple developers published the XPR source code under community pressure in 2014, a hard-fork emerged online, called Stellar coin (XLM). The cryptocurrency switched to its protocol the following year. The author of the hard force, Jed McCaleb, named the internal coin of the Stellar system - Lumens. 

The cryptocurrency has received a lot of favourable reviews. It has even been called the "Ripple of the healthy man". The founder of Stellar Lumens, who worked at Ripple Labs for many years, immediately stated that the project has no commercial goals. The independent Stellar Development Foundation oversees the system. XLM is open source, and any programmer can participate in upgrading the platform. 

The management team of the Stellar Development Foundation includes: 

  • Patrick Collison, CEO of Stripe; 
  • Nicholas Barry - MSc in computer science and mathematics, and a contributor to computer systems development for Microsoft and Salesforce;
  • David Mazires - computer security specialist and co-leader of the Secure Computer Systems research group. 
Stellar Trading Platform (XLM)
Stellar Trading Platform (XLM)

Decentralised network 

A decentralised network consists of peer-to-peer nodes that operate independently of each other. It means that the Stellar network is independent of any organisation (legal entity). 

The idea is to have as many independent nodes in the Stellar network as possible. So the network will work successfully even if some servers fail.

The Ripple consensus mechanism, of which the Stellar Lumens cryptocurrency was originally a fork, uses 'Byzantine Fault Tolerance' (BFT). It is designed to keep the network up and running even if some of its nodes are shut down or hijacked. 

Ripple solves this problem by having the master node complete control of the validators against Satoshi Nakamoto's idea of decentralised blockchain networks.

Why create Stellar, after all? So why do many people prefer to buy XLM?

By moving to their platform, XLM cryptocurrency developers changed the consensus mechanism from BFT to SCP (Stellar Consensus Protocol). At the primary level, Stellar is an ownership tracking system. Like accountants for centuries, it uses a ledger to do so. The novelty of Stellar is that there is no actual accountant. But there is a network of independent nodes, each checking and rechecking the work of the others. 

Stellar is a decentralised system, meaning that no one can stop the network or secretly configure it to their liking. Still, even without a central authority, the ledgers are checked and updated every five seconds.

Stellar trading conditions
Stellar trading conditions

Anchors, trust and loans 

So, what makes people buy XLM?

According to those deposits, anchors are simply entities that people trust to hold their deposits and issue loans in the Stellar network. They act as a bridge between the various currencies and the Stellar network. All monetary transactions in the Stellar network take the form of credits issued by anchors (the exception being Stellar's own digital currency, lumens). 

Anchors do two simple things: 

  1. Accept your deposits and issue the corresponding credits to your Stellar ledger address. 

  2. Allow you to make withdrawals through the provision of credit issued by them.

Anchors now exist in a pre-Stellar world. For example, to use Venmo, you make a cash deposit from your bank account. Venmo then gives you credit to your Venmo account. You can now send this Venmo credit to anyone who trusts Venmo (anyone with a Venmo account). Whoever receives your Venmo credit can convert it into real money by moving it to their bank. 

Anchors perform the same function in Stellar. The difference is that all Venmo and other anchors function on the same network, so now they can all interact with each other - this makes the system much more powerful. For example, people can easily send and exchange a wide variety of anchor credits to each other.

Multi Currency transactions 

Stellar allows you to transfer to anyone you hold any currency in another currency through the built-in distributed exchange. People can also receive any currency through an anchor that they have added. 

For example, Anna wants to send Steve euros using her BTC balance. Stellar will automatically convert her BTC into EUR. The network will select the best exchange rates for the transactions.

Deposit replenishment
Deposit replenishment

Advantages and disadvantages of Stellar

Stellar was meant to be a powerful tool for making cross-border payments anywhere in the world. The system combines banking tools derived from Ripple with its own decentralised protocol. 

The main advantages of Stellar are: 

  • High transaction processing speed - unlike the first Bitcoin cryptocurrency, the transfer is sent straight to the validator in Stellar. The money is credited to the recipient's account 5 seconds after the payment is created; 
  • Low energy consumption - no mining, thanks to the implementation of Stellar Consensus Protocol the transaction verification process on the Stellar network is more energy efficient than the Proof-of-Work (PoW) consensus algorithm;
  • Easy access - XLM can be used for blockchain transactions in states where virtual assets are not widely known or are banned by authorities.

Disadvantages of Stellar: 

  • Low returns on node maintenance; 
  • Limited capacity to run decentralised applications. 

Launching an ICO campaign on the dedicated XLM platform is easier and cheaper than on Ethereum, and several young blockchain projects have already taken advantage of it. 

Analysts and forecasts

The crypto project has long-term prospects, and the coin's price has every reason to rise. In addition, the platform is constantly evolving:

  • More new stabelcoins are appearing (Circle has already issued USDC and Germany's oldest bank Bankhaus von der Heydt has issued EURB).
  • New long-term partnerships with large companies, corporations and even government agencies are being created. For example, recent agreements have been made with Ukraine's Ministry of Digital Transformation, IBM, and the German company Vonovia, which has issued bonds on the Stellar blockchain.
  • The speed and volume of transactions is increasing.
  • With its ability to create smart contracts and decentralised applications, the project could become a competitor to Ethereum.
  • The Stellar Development Foundation is expanding the number of developers.

Where to buy Stellar

How to buy Stellar (XLM)?
How to buy Stellar (XLM)?

Buy on an exchange or via an exchange.

You can buy Stellar in Qatar on most major CEX exchanges and DEX within the platform. Examples: Coinbase, Kraken, Binance, Bittrex, Huobi. In addition, users can buy Stellar through a third-party exchange site. But this method is riskier. Therefore, we recommend you to buy through well-known and trusted exchanges. 

Invest in Stellar in Qatar

If you are looking for other ways and want to invest in Stellar in Qatar, trading or, more specifically, CFD trading may be suitable for you. 

Registration on the Investment Platform
Registration on the Investment Platform

Like almost all other cryptocurrencies, Stellar cryptocurrency is unsecured and therefore highly volatile. Traders can use this to profit by buying altcoins when the market is down and selling them when the price is up.

CFD trading offers traders and investors the opportunity to speculate on asset price movements without actually owning the underlying asset itself. Unlike traditional investments, CFD trading allows traders to play down as well.

You can therefore take advantage of this earning tool. You need a minimum investment and a maximum willingness to earn. Learn and succeed!

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