What is Stellar (XLM)? The term Stellar cryptocurrency or XLM refers to a digital currency developed by Stellar Development Foundation. The organization’s currency, called the Lumen, is traded under the symbol XLM on various cryptocurrency exchanges. You as a trader can use Lumens on the Stellar network, a blockchain-based distributed ledger network that unites people, banks, and payments systems to aid low-cost, cross-asset transfers of value, including payments.
But first, let’s discuss the coin and its development history. As mentioned earlier, Stellar is a blockchain-based platform that makes international payments available online at any time and at any location. Consequently, Stellar acts as a mediator that helps banks, various payment systems, companies, and individuals trade with each other.
That clarifies the coin objective, which is transferring payments in a wide variety of currencies worldwide. The Stellar cryptocurrency platform was initially developed to map all potential values and exchange them with one another in an uncomplicated manner.
On the one hand, these values include the national currencies that anyone spends in their everyday life, such as Euros, British Pounds, and US Dollars. On the other hand, all digital currencies such as Bitcoin, Litecoin, and Ether.
What Is Stellar Cryptocurrency (XLM)?
If we go back to the date when Stellar is publicly introduced, we can find that Stellar currency was created in 2014, arising from a hard fork related to the Ripple platform. That explains the similarity between the Ripple cryptocurrency platform system and that of Stellar.
The only difference is that Ripple is designed to facilitate international money transfers between banks, while Stellar is further developed to significantly simplify the global payment transactions between individuals. The Stellar platform supports every participant who wants to send and receive money without delay.
Lumen Open-Source Blockchain (XLM)
The Stellar network has an official native token called Lumen (XLM). It serves as the internal currency within the Stellar network, which is required for all transactions.
What is Stellar (XLM)? In fact, Lumen represents a medium of communication amongst the different external currencies. If a user wants to send money via Stellar, XLMs are traded internally. It means that payments can be transferred regardless of the currency.
Stellar uses a system of checks and balances in order to make payments. That makes the payment process managed by a bank, which accepts Stellar cryptocurrency as a payment method. The bank institution must be trustworthy. Corporations and companies authorized by financial ministries can also undertake such a task.
Furthermore, the Stellar network includes nodes called anchors, which accept deposits, manage balances, and pay them out when necessary. These anchors help the traders validate the transaction and verify every financial dealing.
International Payments & Simple Procedures
Have we successfully answered your question, “what is Stellar (XLM)?” If yes, let’s pay more attention to another point – the payment process itself. When choosing an online financial network such as Stellar, be assured that your problems come to an end, as your transactions are to be legally concluded within a brief period of time and, in the meanwhile, with a meager fee.
Stellar recognizes any international payments by finding matching payment orders. For example, suppose person A makes a payment in euros, while person B wants to receive the payment in US dollars. In that case, the Stellar network automatically arranges the transaction in such a way that completely satisfies all parties involved.
How does the network arrange the transfer process? It continuously searches for a way that allows person A to cheaply exchange the necessary credit in euros for the equivalent value in US dollars. Internally, the money transfer is to be billed in lumens so that person B can receive his dues in US dollars without person A having to convert euros into US dollars directly.
Stellar & IBM Suggest A New Payment System
Although it is often called Ripple’s little sister, Stellar digital token has become among the top 10 cryptocurrencies. After the Stellar platform has demonstrated effectiveness in managing all operational practices and organizing the traders’ accounts and bargains as well, International Business Machines Corporation, better known as IBM, has expressed interest in digital currency technologies and services.
That interest was not confined to the current activities, which Stellar does, but extended to include a new project that aimed to carry out cross-border transactions in the South Pacific region so that merchants and consumers can invest their money and benefit from the binary awakening cryptocurrencies.
The program is called “Blockchain World Wire.” When Stellar network just implements the program, it will definitely ensure that payments are processed in seconds at the lowest possible cost.
IBM & Stellar Are Real Partners
In 2017, IBM and Stellar network had signed a commercial contract, determining that the Stellar platform centralizes the financial aspect as a payment specialist while IBM assumes leadership.
That collaboration emphasized that Stellar Lumens gained global trustworthiness, attracting a gigantic company to develop an effective partnership to achieve mutual goals. After all, many traders wondered, “Why did IBM specifically choose Stellar cryptocurrency? Why was Bitcoin rejected, although it is the first cryptocurrency that came into being?
Let’s first answer the second question. Bitcoin was immediately excluded by Jo Lang, who worked at IBM Industry Platform. She is the only one responsible for providing Blockchain Financial Solutions. Therefore, she decided to set Bitcoin aside because, according to her statement, Bitcoin cryptocurrency is mainly mined in China, while IBM’s chief clients are primarily in Europe and America.
As for the first question, IBM announced that its program codebase is open source. Stellar Lumens offers a software programming interface that is very well developed. In addition, the non-profit foundation, founded in 2014, has the technologies necessary to function and operate the program code base.
A Payment Method With A Perspective Insight
Today, transactions are no longer restricted across borders. The SWIFT payment system and the well-known IBAN allow people worldwide to send money back and forth with absolute ease. However, money transfer processes still take few working days. On the other hand, the IBM payment system, which uses the Stellar protocol, accomplishes such tasks in a matter of seconds.
According to IBM reports, around 97% of the world’s largest banks are regular clients of the IT Company. The proportion of credit card transactions run through IBM systems is more than 90% of the total volume. That helps the Blockchain World Wire program receive far-reaching acceptance. In particular, the program will impact the cryptocurrencies market, making Stellar Lumens the fastest payment processing system.
If the “IBM Blockchain World Wire” dominates the cryptocurrency field, it will encourage banks to use the Stellar Lumens as an official cryptocurrency. Banks will find that paying dues in Lumens takes place almost in real-time and nearly costs nothing.
Investing in stocks, cryptocurrencies, and other Initial Coin Offerings (“ICOs”) is highly risky and speculative. This article is not a recommendation by iCryptoApe or the writer to invest in stocks, cryptocurrencies, or other ICOs. Because each person or individual’s circumstances are unique, therefore, a qualified professional and/or a financial advisor should always be consulted before making any financial decisions and/or trading or buying stocks, cryptocurrencies, or other ICOs. iCryptoApe makes no representations or guarantees as to the accuracy or timeliness of the information included within.
