Stellar Lumens (XLM): A Complete Guide
Stellar Lumens, also known as XLM, is a digital cryptocurrency that has been generating buzz in the financial markets. In this article, we delve into what Stellar Lumens is, its origins, unique features, and its potential as an investment.
What is Stellar Lumens (XLM)?
Stellar Lumens (XLM) is a cryptocurrency that fuels the Stellar Network, a blockchain-based, decentralized framework. The Network, designed to facilitate cross-asset transfers of value, uses Lumens as its native digital currency.
Stellar Lumens is not just a cryptocurrency; it's a technology that aims to streamline cross-border transactions and alter how we interact with money. It allows anyone to transfer various assets, from traditional currencies like dollars and euros, to tokens representing assets such as stocks or gold.
How Does Stellar Lumens Work?
The Stellar Network operates as a decentralized collection of servers on the blockchain. Each server runs independently, meaning each node is interconnected but not governed by any central source. This decentralization ensures transactions are carried out in a secure and efficient manner.
Stellar uses a unique algorithm known as the Stellar Consensus Protocol (SCP) to validate transactions. This protocol enables the Network to scale more efficiently than most proof-of-work blockchains, like Bitcoin.
The Founders of Stellar
The Stellar Network and its Lumens were created by Jed McCaleb, a well-known figure in the cryptocurrency sphere. McCaleb is also the founder of the Stellar Development Foundation, the team behind the Stellar project. His past achievements include creating the first major Bitcoin exchange, Mt Gox, and serving as the Chief Technology Officer of Ripple, another prominent name in cryptocurrency.
Alongside McCaleb, key figures in the Stellar ecosystem include David Mazieres (creator of the Stellar consensus protocol) and Denelle Dixon (SDF’s Executive Director and CEO), among others.
What Makes Stellar Lumens Unique?
Stellar stands out for its combination of complete decentralization, user-friendliness, support for multiple currencies and asset types, and fast, almost free transactions.
The Stellar Network's decentralization is not just about technology; it's also about its governance. Anyone can become a verification node (server) with the Stellar Core. This decentralization extends to the Stellar Development Foundation, which is a non-profit organization.
The Value of Stellar Lumens
Initially, Stellar aimed to inflate by 1% per annum. However, the 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.
In addition to its finite supply, Stellar derives value from its various use cases and its ability to efficiently and cheaply transfer digital assets across borders.
Stellar Lumens 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.
Stellar Lumens Network Security
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.
Using Stellar Lumens
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, and more.
Stellar Lumens Wallets
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. There are numerous secure storage solutions, like Kriptomat, that allow you to store and trade your XLM tokens without hassle.
Stellar Lumens 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.
Stellar Lumens FAQ
Stellar Lumens Price
The current Stellar price will depend on the market conditions. It is always advisable to check the latest Stellar price on a trusted cryptocurrency exchange.
Stellar Lumens presents a unique proposition in the world of cryptocurrencies. Its focus on cross-border payments and its commitment to decentralization make it an interesting option for investors. However, like any investment, it's important to do your research and understand the market before diving in.
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