Sunday, December 26, 2021

Stellar Lumens & Cross-Border Payments

What is Stellar?

Stellar is a sophisticated blockchain network launched by Jed McCaleb and Joyce Kim in 2014 with the goal of making cross-border payments available to everyone across the world. Its cryptocurrency, Stellar lumens (or XML), is ideal for instantaneous transactions with low fees. While the project is similar to Ripple (XRP), the codebase behind it is original and developed by the Stellar Development Foundation. The smallest unit of measurement is a Stroop, which is one ten-millionth of a lumen.


Ripple’s Cousin

Having begun his work on digital currency in 2011, McCaleb went on to found Ripple and served as its CTO until 2013. However, due to disagreements with the stakeholders, he abandoned Ripple to start a non-profit organization that would deliver a largely similar service but with less centralization and an open-source codebase.

Unlike Ripple and its control of the validators, Stellar employs its own Stellar Consensus Protocol, which allows the selection of trustworthy nodes without any central authority. Moreover, Stellar has inflation pools, which are lumens weekly distributed to “elected” users at an annual rate of 1%. This is a negligible amount that cannot significantly impact the coin’s price but will increase its utility in the long run.

The DEX coin

Another reason why Stellar is set to remain a strong player in the crypto world is because of the
numerous use cases it has to offer. The most important one is the ability to swiftly process international remittances, which is particularly beneficial to people in countries with poor banking infrastructure or lack thereof.

Furthermore, Stellar was one of the first networks to pioneer a working implementation of a decentralized exchange. Four clients currently allow trading coins, tokens, fiat currencies, and even commodities. Fast and free, they open up endless opportunities for individuals and businesses alike. The latter may take advantage of lumens as mobile money, especially in micropayments. Stellar is easily scalable, has a transaction speed of around 3-5 seconds, and charges little for the service, with fees going to an inflation pool.


Strategic Partnerships

Among the project’s main strengths are its partners. In 2017, IBM began working with a number of international banks to provide so-called blockchain banking based on lumens. Stellar also partnered with Deloitte to build a cross-border payments app, with lumens being used to conduct transactions.

More recently, SatoshiPay announced it would use Stellar to facilitate direct low-cost payments between clients and publishers. As more companies turn to this technology, the coin will
undoubtedly grow in adoption and market capitalization. By providing a cheap reliable service and
focusing on expanding the operation Stellar is solidifying its position as the payment network for the

Where to store XLM?

If you are looking for a secure and efficient way to buy and manage your XLM, you need to look no further. Firstly, our Magnum Wallet is non-custodial, meaning that the user here remains in sole control of their private keys and other personal information. What’s more, we offer a variety of useful features such as notifications on Telegram, watch-only wallets, and the support of Ledger and Trezor hardware wallets. We also provide several ways to get extra coins and earn passive income.

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