Since Bitcoin introduced to the world, a lot of other cryptocurrencies also joined the game in order to improve the capabilities and fix the issues, which Bitcoin or other cryptocurrencies are faced with. Stellar (XLM) is one of them. It came to provide fast and cheap transactions from cryptocurrencies to fiat money. In fact, it allows cross-border transactions between any pair of currencies. Its price pumped by around 41,900 percent in 2017, and in 2019 it could become as the star performer of the year. At the time of writing, stellar is the 11th cryptocurrency with the market cap of approximately $1.2 billion.
What is Stellar?
Stellar is an open-source, decentralized and community owned network that allows cross-asset transfers of value. It developed in 2014 by one of the Ripple founders named Jed McCaleb. As well as other cryptocurrencies, it operated using blockchain technology. Its token called Stellar Lumens (XLM) that powers its network. As an example, it works similar to Ether on Ethereum blockchain.
A transaction on Stellar network costs only 0.0001 XLM and take roughly 6 second to get confirmed. In fact, it came to provide cheap and fast transactions for people all around the world. The total supply of its tokens grows by 1% every year, which make it inflationary currency. Same as Ethereum, you can send Stellar and have it arrived as euros, dollars or even Bitcoin. It aims to provide access to financial services to everyone around the world. It uses as a medium of exchange to pay for goods or services or in remittances.
Like other cryptocurrencies such as Ethereum, Stellar blockchain allows other types of tokens to be created on its network totally aside from Lumens (XLM). For instance, tokenized versions of fiat currencies can be created to facilitate cross-asset transfers of value. This feature made a suitable choice for ICO projects aside from Ethereum and other blockchain based cryptocurrencies (for example, Tron).
Is Stellar a new version of Ripple?
Stellar and Ripple have similarities, but they are separate projects with different purposes. Although, they both use consensus protocol instead of proof of work mining system, which is used by most cryptocurrencies, they have differences in some cases.
Ripple network works by node voting, it means that a transaction has to be verified by more than 80% of nodes. On the other hand, Stellar quickly allowing nodes to become validators.
As an another point of difference, Stellar targets individuals with mostly micro-transactions, but Ripple main target is financial institutions and banks.
Furthermore, Stellar is a non-profit organization, it means that there are no shareholders.
Stellar is a stimulating project that attracted a lot of cryptocurrency enthusiasts so far. However, it faces serious competition with other cryptocurrencies available in the market, it provides numerous remarkable feature that help it to stay strong in this market.
Stellar has the potential to make significant changes to the financial sector. It’s working in partnership with different companies around the world, specifically, IBM. However, it’s rising the number of partners to create a positive future outlook.
The low cost of transactions made it a suitable choice for cross-border money transfer and it gets more mass adoption by both financial institutions and the masses. As long as it succeeds, it’s likely to make a revolution in the industry of cash transfers.