Who created the “Ripple Killer” and why?
Programmer Jed McCaleb, along with several other developers, stood at the origins of Ripple Labs. He invested a lot of effort into his brainchild, but left it in 2014 because he was unhappy with the high centralization of the Ripple network and the way the initially promising idea turned into a project aimed at banks, payment systems and corporations.
McCaleb launched an alternative project, Stellar (XLM), based on the same protocol, but without the critical shortcomings of its predecessor. The main differences from Ripple were decentralization and focus on helping people in developing countries, non-profit organizations and small businesses.
During the first year of its existence, from a technical point of view, the Stellar platform was a clone of Ripple. But in 2015 it was switched to its own open-source protocol.
The Stellar Development Foundation, which is independent of the developers, manages the platform. The founders of the foundation, its board members and consultants do not benefit financially from its activities. The organization only develops and supports the project.
The Stellar Development Foundation initially set aside 5% of all Stellar tokens, of which 2% was previously purchased by Stripe, to fund the work. As a result of this transaction, the foundation raised $3 million – a rather modest amount to provide for the development team.
How does the Stellar platform work?
tellar is a network of independent peer-to-peer nodes. Each of them keeps a copy of the complete database of the status of all accounts in the network – the ledger. To ensure that the information in the ledger is always up to date, the nodes synchronize data between them every 2-4 seconds. This process is called consensus. With it, each copy of the database receives information about the transactions, exchange requests and related changes in the status of accounts in the network.
Where can you use Stellar?
The platform is designed as a universal tool for financial transactions. It allows instant exchange between fiat currencies, cryptocurrencies, tokens and other assets with conversion. The network’s own cryptocurrency Stellar Lumens (XLM) serves as a kind of bridge between different assets that do not have direct markets.
In addition to exchange transactions, the network can be used to launch smart contracts, create decentralized applications and conduct ICOs. This makes Stellar a competitor not only to Ripple, but also to Ethereum.
How to buy Stellar?
Stellar Lumen cannot be purchased for fiat currency like Bitcoin or Etherium. But it is available on many popular cryptocurrency exchanges, including Binance and OKEx.
To get Lumens, you’ll first have to exchange fiat currency for Bitcoin, Etherium, Litecoin, or another popular cryptocurrency. These coins can be used to top up your balance on the exchange and purchase Lumens.
Where to store Stellar Lumens?
Strictly speaking, tokens are always stored on the network, and a unique key gives access to them. However, you will need a special client to receive and transfer the coins. Simple transactions can be performed using this online wallet: https://stellar-wallet.org/. It allows you to start working with Stellar Lumens in a few clicks and does not require installing the client on the user’s computer.
The platform’s website also provides a list of cryptocurrency wallets that support Lumens. There are 19 options, and you can choose a wallet of one of three types:
- web wallet with browser access;
- desktop – software for PCs;
- Mobile – an application for smartphones and tablets.
For maximum protection, it is better to choose Trezor and Ledger hardware wallets.
Benefits of Stellar
- free exchange of any assets;
- negligible cost of transactions;
- high speed of transaction processing;
- extensive functionality with which to conduct ICOs and launch decentralized applications;
- no speculative component in the activities of the Stellar Development Foundation.
Emission and distribution of Stellar Lumens
All tokens of the platform were initially issued in the amount of just over 100 billion. No additional issue is envisaged.
Stellar Development Foundation did not sell the issued coins, but gave them away for free according to the following principle:
- 50% goes to users in small portions;
- 25% goes to non-profit organizations;
- 20% goes to the lucky owners of bitcoins.
Another 5% remains – the very same tokens left by the Stellar Development Fund for its own needs.
Tokens obtained by collecting transaction fees are redistributed just as free of charge.
What is the outlook for Stellar Lumens?
According to Coinbase, the coin was trading at $0.002 to $0.003 until April 2017. Those who managed to buy tokens before that time became 300 times richer in just over a year, as XLM peaked at $0.938 in June 2018.
Since then, Lumen (XLM) has dipped slightly, but at the time of writing its price is still $0.392, a 130-fold increase over the quotations from four years ago.
In addition, it is very probable that the coin will rise in the future. There are several reasons for that:
- Stellar’s useful functionality with a wide range of applications;
- high expert reviews of the quality of the platform;
- unique positioning in the market with a virtual absence of competitors;
- Competent work of the Stellar Development Foundation team and developers focused on creating the most comfortable conditions for users;
- rapid growth of the platform popularity among developers;
- Long-term partnerships with large companies. The main place here is occupied by IBM.
IBM Corp. vice president of blockchain Jesse Lund called Stellar “a remarkable, scalable, high-performance, publicly accessible registry of digital assets.” He claims that the company has long-term plans to work with Stellar.
Such news appears likely to push Lumens’ quotes up during periods of general growth in the crypto market and keep the token afloat during stages of the global cryptocurrency downturn. This coin will be a good choice for medium to long term investments. Its position is quite stable and its growth potential is high.