Stellar and Stellar Lumens (XLM) – Explanations

Stellar, a blockchain network to transfer currencies

Stellar is an open-source protocol and decentralized cryptocurrency blockchain network. It allows the transfer of fiat currency or value either locally or across borders. Stellar allows people to send currencies anywhere in the world at no cost. It uses the Byzantine algorithm for its consensus which is different from other crypto platforms. Byzantine is fast and nodes can reach a consensus of a value even with the existence of unresponsive or malicious nodes in the system.

Byzantine algorithm adapted Federal Byzantine Agreement (FDA) which is hard to alter and which leads to centralization of the platform. FDA has all the advantages of allowing new nodes without checking their trustworthiness but without altering the security of the system.

How does Stellar work?

Stellar was co-founded in 2014 by Jed McCaleb who is also the co-founder of Ripple and Joyce Kim and was officially launched in 2015. It was founded under Stellar Development Foundation which is a non-profit making organisation. It runs its operations through tax-deductible donations. Furthermore, it allows the transfer not only of fiat currencies but practically anything including gold.

Tokenization and Anchors

On Stellar, people don’t send an actual currency but a token of that currency. For example if you need to send dollars you don’t send actual dollars but rather Dollar tokens. These currency tokens live on the Stellar network and have the same value as the currency. They are backed on a ratio of one to one on a bank account that is dedicated to the purpose. This tokenization of any currency is well integrated into the protocol. Therefore, any fintech company can offer fiat back tokens. This network doesn’t only allow tokenization of currencies but other assets like gold, shares and many more.

The Stellar network uses Anchors. They act as the bridge between the Stellar blockchain and the traditional financial systems. Anchors work as token issuers or provide fiat on/off ramping or both. This means that Anchors are local businesses that offer currencies in a particular country or region. Anchors charge a small fee for the services they provide.

Lumen, the currency of Stellar

Lumen with a ticker sign XLM is the native currency on the Stellar network. It is used for fee payment for the transaction on the network. Lumen is ideal for very fast micropayments. Indeed, it has up to 5 seconds transactions completion period and a minimum fee of 0.00001 XLM.

It cannot be mined. The initial mining of 100 billion Lumens with a 1% yearly inflation rate is what was in circulation until 2019. Then, the number of Lumens was reduced to half and no more are to be added. 20 billion Lumens were in circulation and the rest held by Stellar foundation for development and advertising.

It costs lower to run a node on Stellar. In addition to the no-mining policy, users only get incentives for securing the network. Companies that have built their products on top of Stellar who use nodes to verify their transactions help to secure the network. These companies include IBM and Satoshi Pay.

We hope you have loved to learn about Stellar, one of the most famous cryptocurrency. To go further, you can learn about the other cryptocurrencies.


Stellar has many advantages as a digital payment platform. First of all, trading on Stellar is fast and inexpensive, thanks to its distributed consensus technology. This makes the platform ideal for cross-border money transfers And international payments.

Additionally, Stellar offers great flexibility for creating and exchanging different digital assets. We find in particular currencies, of the tokens and assets based on the blockchain. This feature allows users to customize their trades and trade different types of assets on the same platform.

Stellar is also very accessible for users, with a user-friendly interface and an easy learning curve for beginners. This makes Stellar an attractive option for people looking to enter the world of cryptocurrency.

Finally, it is a decentralized platform. This means that it is not controlled by a single entity or government. She offers a security and an increased confidentiality for platform users.

Overall, Stellar offers significant advantages as a digital payment platform. For example, fast transactions and inexpensive, a great flexibility for the creation And the exchange of digital assets, easy accessibility and increased security.

The inconvenients

Despite its many advantages, it also has some disadvantages. First of all, the platform is still relatively new. This means that it has not yet been widely adopted by merchants and businesses. This can make it difficult for users to use Stellar to make purchases online or in physical stores.

Moreover, as Stellar aims to offer a payment solution inexpensive, its ability to transaction processing is limited compared to other cryptocurrency platforms. This can lead to longer wait times for processing transactions, especially during times of high demand.

Finally, it is important to note that the Stellar platform is not immune to hacks and malicious attacks, just like other cryptocurrency platforms. Users should take precautions to protect their wallet and their money.

In conclusion, although Stellar offers many advantages as a digital payment platform, it is important to consider its potential disadvantages before deciding to use this platform.

Future of Stellar

The future of Stellar looks bright, given its potential to become a popular digital payment solution and its growing adoption in the whole world. The platform is in the process of developing important partnerships with leading financial institutions and companies, which strengthens its credibility and his position on the market.

Stellar is also developing innovative technologies to enhance its platform, such as smart-contracts functionality and the ability to create custom digital assets. These improvements should strengthen the versatility of the platform and expand its potential applications.

What is Stellar?

Additionally, Stellar continues to expand its reach across the globe by partnering with financial institutions in regions such as africa, asia And Latin America. These partnerships aim to bring affordable payment solutions to people who don’t have access to traditional banking services, which could help broaden adoption of the platform.

Overall, Stellar’s future looks bright as a global digital payment platform, with continued technology improvements and a increasing adoption worldwide.

You can invest in Stellar but you should understand that cryptocurrencies are volatile and work on speculation. Therefore you should only put the money you can comfortably lose.

You will surely like our other articles on the main cryptocurrency news, for example: “XRP cryptocurrency: between advantages and controversies”, “Dogecoin: a popular crypto on the rise?” “, “Shiba-Inu: A cryptocurrency with the best community? “, “Stellar and Stellar Lumens (XLM) – Explained” and “Solana: The Fast, Scalable and Inexpensive Cryptocurrency”.

This article is not investment advice. Do your own research before investing in the cryptocurrency market.

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