Stellar is an open-source payment technology built on the Ripple protocol. As a decentralized protocol, Ripple supports Stellar in its effort to deliver money transfer services. Through Stellar, users can transfer funds quickly and at a very low cost. Though Stellar works with all forms of currencies, including fiat and cryptocurrencies, it has its native cryptocurrency known as Stellar Lumens (XLM). This means it does not rely on any national currency or other cryptocurrencies to effectively carry out its money transfer services. In other words, Stellar provides cheap, lightning-fast transactions, and its advantage is that it can work with any money.
Stellar was launched in 2014 by Jed McCaleb and Joyce Kim, and has since processed billions of transactions, and built partnerships with major companies. The growth of steady growth of Stellar has made its cryptocurrency (XLM) popular among many crypto investors.
What are Stellar Lumens (XLM)?
Stellar is powered by its native cryptocurrency, XLM. Unlike Ripple cryptocurrency which works with established financial institutions such as banks, XLM crypto is focused on powering money transfer services across the globe, mainly in developing markets. The cryptocurrency is on an open-source, decentralized protocol for digital currency to fiat money transfers. Stellar enables cross-border transactions between any pair of currencies.
XLM works uniquely and is mostly different from Bitcoin and many other cryptocurrencies. For instance, while Bitcoin uses an entire network to validate a transaction, XLM only uses a quorum to approve transactions. This feature makes transacting XLM faster than other cryptocurrencies, hence great for small businesses, non-profits, small banks, and inside-corporation transactions. The first major user of XLM and the stellar network is IMB. With this and many other partnerships, Stellar Lumen has become a favorite for many investors and users, which has made them penetrate and build a market niche.
XLM project is trying to expand its reach, with its network spread to many countries to boost its ecosystem and building of strategic partnerships. The development of strategic alliances has increased its growth with organizations such as IBM, Deloitte, Tempo, SatoshiPay, Saldo, and Wirex.
The world’s largest, and arguably the best crypto signal, is currently providing support for the XLM crypto. The crypto has, however, experienced some downward trend in prices, just like bitcoin and other major crypto coins. But experts believe that XLM will rise in price sooner rather than later, given its expansion and strategic partnerships in the underexploited markets.
Considering that Stellar is more like a hybrid blockchain whose primary focus is to integrate distributed ledger technology (DTL) into the existing financial infrastructure, it is working to be the link between the traditional centralized financial service providers and the decentralized cryptocurrencies. The confidence many crypto enthusiasts have in Stellar means that it is considered a valuable digital asset with the potential for higher capital gain than many of its peers.
Why is Stellar good for sending remittances?
Stellar Lumen was created to facilitate faster and cheaper cross-border transactions. As such, one of the most practical uses of Stellar is for remittances. There are many reasons why Stellar Lumen is a favorite for many when it comes to remittance.
- Low transaction fees
First, using XLM to remit funds is straightforward and incredibly cheap. XLM works as a bridge between your current currency and the currency you want to receive and helps users avoid paying expensive transaction fees that characterize traditional remittance service providers. In other words, Stellar is against remittance services that charge exorbitant fees on transactions and ensure users pay the least fee when remitting funds. This feature has made XLM quite popular among people working overseas and sending money to help their folks back home. It means you can work in Europe and send money back to Africa at a much cheaper cost than any other transfer service. The low-cost transaction fees mean that people can send small amounts of money without a transfer fee eating into the remitted money.
- Exchange XLM for local currency
XLM is a convenient currency for cross-border remittance as it is possible to exchange XLM for local currency. As an industry-leading efficient platform, all you need to do is buy XLM in your local currency or with other cryptocurrencies. You can then exchange it for any currency that you want, as long as you have enough XLM to carry out the transaction.
- Fast transaction
Stellar has been built to send fast and cheap cross-border payments. It does not matter the destination; Stellar remittance will only take a few seconds and a fraction of a penny for the recipient to receive the funds.
Why would banks and businesses use stellar?
One of the most discussed advantages of Stellar it helps solve the problem of intermediaries and commissions on cross-border transfers, which increases and slows down the costs and speed of transactions, respectively. In other words, Stellar is a decentralized protocol that united the world’s financial infrastructure with fast and cheap cross-border money transfer services. Banks and businesses using Stellar can leverage the technology to help them eliminate many intermediaries they use to complete cross-border transactions. All these can help these banks and businesses leverage the costs of operations in money transfer services.
Comparison of Stellar and Ripple- Advantages over ripple
With Stellar, customers can create, send, and trade digital representations of all forms of money, including fiat and cryptocurrencies. The stellar crypto coin has changed a lot since its inception, and unlike the Ripple crypto coin which works with well-established financial institutions such as banks, Stellar (XLM crypto coin) has focused on developing markets. The model operates on cross-border transactions between any pair of currencies. Developed by the Stellar Development Foundation, the stellar protocol is supported by a 501(c)(3) non-profit.
Where to buy Stellar
You can buy Stellar (a step-by-step guide) from many established exchanges. The following are the top 10 exchanges where to buy Stellar Lumen (XLM):
The crypto market has been on a bear run as most coins, including Bitcoin, have experience price dips over the past few months. XLM is not an exception, however, with the growing list of partnerships, improved ecosystems, and expanding developing markets, XLM will mostly gain in market capitalization even as it continues to play a very significant role in the financial industry.