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Stellar is an open network for storing and moving money that was launched in 2014 by the founder of Mt Gox. and co-founder of Ripple, Jed McCaleb, alongside former lawyer Joyce Kim.
Stellar offers a similar solution to Ripple – which also has an aim to improve on the movement of money around the world. However, Stellar is focused on working with the needs of individuals rather than financial institutions.
To do so, Stellar offers a multi-currency support solution where users can easily transact money to anywhere in the world through its native XLM token.
What is XLM?
XLM (aka Lumens) is the native token of the Stellar network.
DID YOU KNOW: After the first 100 billion XLM tokens were distributed, new coins are added to the circulation at a rate of 1% per year and no cost.
Even though Stellar was designed to digitally represent any currency, the native XLM token is required for users to participate in the network.
Both the payment network, Stellar, and the tokens, Lumens, are overseen by a non-profit called Stellar.org.
Here are some things that XLM can do:
- Handle micro-payments with nominal fees.
- Settle payments in real-time (2-5 seconds).
- Cross-border transfers.
- Send remittances without fretting over currency exchange or bank transfers.
- Supports smart contracts, which brings in programmable money and enables anyone to create their own initial coin offering.
Stellar Lumens (XLM) is fully supported on Coinhako, this means that you can buy, sell, swap, send and receive XLM at Coinhako!
XLM transactions are validated via the Stellar Consensus Protocol. However, like most cryptocurrencies running on blockchain technology, consensus of transaction records are done through some form of distributed ledger.
The Stellar network runs on a web of decentralized servers supporting the ledger that keeps track of the network’s transactions. The Stellar protocol functions like PayPal, but it’s more inclusive and flexible.
To start using it, funds have to be anchored on the network. This integration means you can send funds instantly on the network without having to wait for a bank transfer. The more anchors, partners, and users are on the network the more the price is affected in a positive way.
Stellar’s objectives down the road include improving the usability and trust for Stellar and becoming the blockchain that everyone trusts.
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