Should You Invest in Stellar?

Stellar's goal is to make it easy to create, send, and digital representations in the form of money, but is it a cryptocurrency you should consider investing in?

This article will do a deep dive into Stellar Lumens and whether or not you should invest.

  • XLM
    Stellar
  • Price
    $ 0.126366
  • Change
    3.49%
  • Marketcap
    $ 3.14 B

Some of the links in this post are from our sponsors. We provide you with accurate, reliable information. Read our Advertising Disclosure

A recent report has revealed that The Ukraine government has chosen stellar as its official platform for token issuance. In fact, this is a massive endorsement of the forum.

Furthermore, the Ukraine government will use Stellar to issue its digital assets.  Meanwhile, some analysts believe this partnership could help push XLM prices higher.

By buying Stellar, investors can get into a partnership that has the potential to benefit the entire industry.  Read on to find out whether or not Stellar is a good investment opportunity.

Best place to buy XLM

Why I like Coinbase:

Coinbase is a secure platform that makes it easy to buy, sell, and store cryptocurrency like Bitcoin, Ethereum, and more.

>> Read our full review

Fees: 1.49% per trade

Account minimum: $0

Promotion: Offers $10 free bitcoin to new users

What is Stellar?

The Stellar network is an open-source, distributed, and community-owned network that facilitates cross-asset transfers of value.

Stellar aims to help facilitate the cross-asset transfer of value at a fraction of a penny while aiming to be an open financial system that gives people of all income levels access to low-cost financial services.

The Stellar Consensus Protocol (SCP) is a consensus algorithm designed to provide the same level of security as traditional algorithms such as PBFT or Paxos.

However, SCP can also tolerate nodes going offline or malicious actors (such as Sybil attacks).  Stellar has its built-in currency called Lumens (XLM).

Who Are the Founders of Stellar?

Stellar was founded by Jed McCaleb and Joyce Kim in 2014 with an initial investment of $3million. The founders sought to enable people to make payments the same way they send emails.

The Stellar team identified a few challenges that had to be foreseen to achieve this mission. These included:

  • Reducing the cost of remittances from a current high of 7% to zero.
  • Removing the need for a third party to facilitate cross-border transactions.
  • Allowing people without bank accounts to access financial services.
  • Making it easy for people to create mobile wallets, hence increasing accessibility.
  • Improving internet connectivity such that everyone can access their funds irrespective of location.

How Many Stellar (XLM) Coins Are in Circulation?

As outlined in its whitepaper, the Stellar network issues a fixed supply of 100 billion XLM tokens. At present, 98.5% of those tokens are circulating in the market.

The other 1.5% is in a reserve fund, mainly for development grants and platform operations.  The Stellar Development Foundation (SDF), an organization that supports the development and growth of the Stellar network, maintains this reserve fund.

SDF uses these funds to develop software, provide grants to companies building on Stellar, and fund operational costs.  You can earn XLM tokens by contributing computing power to maintain the network.

We term this process "inflation," It is similar to mining on other blockchain networks. However, the inflation mechanism promotes network participation and adoption.

This is by rewarding users who help keep the network running.

How is Stellar Secured?

Stellar's consensus protocol is a radical departure from other blockchain approaches. Actually, it employs a unique Federated Byzantine Agreement (FBA) algorithm.

So, in addition to being much faster than traditional blockchains like Bitcoin and Ethereum, it is also more secure. FBA is a "permissionless" system wherein participants need not know or trust each other. 

Instead, the network achieves consensus based on agreement amongst a quorum of nodes. By doing so, Stellar eliminates the need for slow and expensive "proof-of-work" algorithms used by permissionless networks.

Trustlines are another way. Stellar increases network security; unlike Bitcoin or Ethereum, accounts on Stellar can only transact with other accounts they trust.

This reduces the likelihood that people will send their tokens to unintended recipients. In addition, this will reduce spam and DoS attacks in the network.

What Makes Stellar Unique?

Stellar's unique properties include:

  • High throughput: The Stellar Network can reliably process more than 1,000 operations per second with current software.
  • Fast settlement: Transactions settle in ~5 seconds thanks to a decentralized consensus mechanism called the Stellar Consensus Protocol (SCP).
  • Low fees: You send payments for fractions of a penny.
  • Reliable infrastructure: The Stellar network has servers running the Stellar Core software. This helps it reach a consensus about all transactions on the network.

The Stellar protocol receives support from a nonprofit—the Stellar Development Foundation. The Foundation's mission is to promote global financial access, literacy, and inclusion. 

SDF accomplishes this by expanding worldwide access to low-cost financial services through the development and maintenance of technology and partnerships.

Stellar Alternatives

bitcoinBitcoin
$ 29,022.004.06%
ethereumEthereum
$ 1,941.913.64%
tetherTether
$ 1.000.06%
usd-coinUSD Coin
$ 1.000.05%
bnbBNB
$ 298.592.33%
xrpXRP
$ 0.407123.17%
binance-usdBinance USD
$ 1.000.18%
cardanoCardano
$ 0.5087944.2%
solanaSolana
$ 49.016.94%
dogecoinDogecoin
$ 0.0834664.03%

Should I Invest in Stellar?

I've been looking at many cryptocurrencies, and to be honest, most of them are either scams or have no use.  The best time to invest in cryptocurrency is when it has a low market cap and almost no use.

Then, you can get in on it before the price rises by interest. There are a lot of cryptocurrencies that seem like good ones to invest in at first glance, but after some research, you will discover that they don't have any actual use.

Stellar is one of those currencies that doesn't seem like much at first, but once you look into it more deeply, you will realize that major financial institutions and banks are adopting this currency.

We have a promising cryptocurrency to invest in when you combine that with its low market cap.  Stellar Lumens (XLM) is different from most other cryptocurrencies because the purpose of Stellar Lumens isn't to become a decentralized currency people use every day.

Instead, the goal of Stellar Lumens is to make cross-border transactions faster and easier for banks and other financial institutions.

Currently, it takes around 3-5 working days for funds to transfer internationally, with high fees and unfavorable exchange rates added on top.

Stellar aims to make cross-border transactions happen within 2–5 seconds with virtually no fees (0.00001 Lumens per transaction).

Stellar is a commercial platform that links payment systems, banks and individuals. Stellar allows you to produce, transfer, and trade digital representations of any currency, including bitcoin, dollars, pesos, and just about anything else.

The world's financial systems are able to function together on a single network because of its design.

Coinbase

Coinbase is a secure platform that makes it easy to buy, sell, and store cryptocurrency like Bitcoin, Ethereum, and more.

Coinbase icon

You may also like