All the top blockchain technology companies are working to provide decentralized solutions to various industrial sectors. Cross-border payments have long been of interest to the world, and as it evolves into a major economic issue, we are going to see many more companies go after space.
PayPal is the market leader in a space that is ready to be disrupted. If things really do change, people and banks all over the world will become connected much more easily. Right now, one of the leading blockchain-based efforts to attack this dominance is Stellar Lumens. In this article, we will consider the killer-features of Stellar, its applications and discuss whether you should buy Stellar Lumens or not.
What Makes Stellar Different
Stellar has many similarities to other blockchain networks, with a ledger and distributed network that manage all transactions. But its native coin has a different function than those on the Bitcoin or Ethereum network.
The first thing you must understand – “Stellar” is the name of the network and “Lumen” is the name of the cryptocurrency that helps the network function. There are two core uses of Lumen (which has the ticker XLM). First, it is the currency transaction fees on the network are paid in. The network’s goal is to make it easy to transfer money throughout the world with little hassle, but transaction fees are necessary to prevent millions of tiny transactions from popping up. By requiring a user to hold a minimum balance in their account and pay 0.00001 Lumens per transaction, much of the “spam” is filtered out of the network.
The second use for Stellar Lumens is as a bridge currency in cross-border transactions. If users are dealing in two different fiat currencies (especially ones that don’t have a liquid market with each other), then Stellar uses Lumen as an in-between to allow transactions to be settled more easily.
Stellar as a Non-Profit
Unlike many of the other cryptocurrencies and platforms you will encounter, Stellar is a not-for-profit company. They are trying to fight poverty by making it easier for individuals to send remittance payments to their family back home. This has resulted in a significantly different distribution of their coins than with other companies.
Stellar has distributed their coins by giving it away to 3 core groups: individuals who wish to participate in the network, partners, and Bitcoin/XRP holders. Each of these groups has different incentives and draws to the network, but the overall goal is to maximize the number of users in the market. With 50% of the tokens being given away to individuals, the network is likely to end up very broad (meaning there are many people operating on the network). The hope is to avoid having very concentrated holdings of wealth on the Stellar network, which is in keeping with the non-profit mentality.
As mentioned above, they have been giving away Stellar Lumens to new entrants to the network, but that is a very small amount, and there are still reasons for you to buy it yourself. First off, it can be a profitable investment. Most of the time, you will only hear people discuss Bitcoin in terms of its massive investment gains, but Stellar has actually undergone higher gains in the last year. Additionally, if you are going to act as a transfer operator or market maker, you would need a significant amount of Stellar to make this possible. The same applies if you want to transfer large amounts of your own fiat currency and need a bridge asset.
How Can I Buy Stellar Lumens?
Lumens are still considered an altcoin, so you likely will have to take an alternate route when buying this cryptocurrency. The first thing you will need to do is sign up for a wallet that is compatible with Stellar Lumens, as some wallets are only able to manage BTC, ETH, and LTC.
Then, you must use an exchange to transfer your fiat currency into cryptocurrency. Only once this is done can you find an alternate exchange where you would transfer your cryptocurrency and then make the actual purchase of Lumens.
Until recently, it was necessary to do the above three steps and then exchange it for Stellar Lumens on an altcoin exchange. But lately, CEX has commenced trading of Stellar Lumens on their exchange.
According to CEX website, they offer XLM/USD, XLM/EUR and XLM/BTC as trading pairs. It is also possible to make withdrawals and deposits in Lumens. The main result of this is that a lot of demand will be unlocked as more buyers will be able to purchase Lumen. Until now, it took a complicated buyers guide to make the purchase, and now none of these complicated steps will be necessary in the future.
So by becoming much more accessible to the general public, XLM is likely to experience an uptick in demand that will continue their already steady trend of growth. This is what happens when you have a token that is not just perceived as a valuable investment but has the ability to help people all over the world as well.
