What Is Stellar Lumens And Why Is It Important?

In the time that is taken by Bitcoin to complete one transaction, there is a coin known as Stellar Lumens that can complete nearly 120 to 200 transactions in the same time span. By the end of this article, you will get a detailed knowledge about this crypto. 

What Are Stellar Lumens?

You may have heard this name before but now it is time for you to know the real information about this cryptocurrency. In 2014, Stellar Lumen left a narrow gap between the financial world and the crypto world. Since that time Stellar cryptocurrency has occupied a position in partnership with some of the largest companies in finance and tech. The partnership has Stripe, IBM, and Deloitte along with many payment processors and financial institutions in Asia and Europe. 

The main goal of Stellar is to become the digital payment rail of the world by connecting banks, people, and payment systems. It enables the users to transfer money to anyone, anywhere, securely, and quickly having a transaction cost that is less than a penny. 

Some say that Stellar crypto began as a hard fork from the Ripple protocol. It will be interesting for you to know Jed McCaleb who is the founder of Stellar Lumens, has also founded Ripples. But however, he said on his Stellar Lumens Twitter page that both the cryptos have different codes and both are not forks. 

If Stellar Lumens Isn’t A Ripple Fork, Then What Is It?

The primary difference between Stellar Lumens and Ripples is that Stellar crypto aims at individuals while Ripple targets financial institutions that include some of the biggest banks of the world. 

To be precise, the target users of Stellar are everyday people, Ripple on the other hand works with some of the largest banks across the globe. According to Jed McCaleb, 

“Stellar is not a fork of ripple. It is a completely different code.” 

How To Use Stellar Lumens?

You can imagine Stellar Lumen as Bitcoin’s faster and more scalable cousin that does not require mining. Lumens can be easily traded in just 3 – 5 seconds irrespective of the place and time. This is an ideal crypto for cross border payment. With Stellar you can avoid expensive feelings like that with the Western Union. This implies that when you receive or send money to someone from abroad you will not have to pay any 10% or 20% extra fee. You will only have to pay 0.00001 Lumen which is currently $0.01. 

How Do Transactions Work?

Stellar Lumens 2021 has the capacity to process nearly 1000 transactions every second at a fraction of each penny. This payment is basically to prevent the network from facing any attacks. Using Lumen you can send or receive cross border payments across the globe. 

Unlike Bitcoin, Stellar Lumen is devoid of using Proof Of Work. Instead of that, it uses SCP (Stellar Consensus Protocol). SCP of Stellar enables quick and secure payments with anyone and anywhere around the world. 

Above that the code of Stellar SCP allows Lumen to be used without any mining operation. Some say that Stellar is less secure and decentralized as there is no mining associated with it. However, it has nodes all over the world for which it is considered semi-centralized to some extent. Now you may wonder, can Stellar Lumen reach $100? The probable answer would be a no. At Least not very soon. Not during the Stellar Lumen price prediction 2030 also. Presently there are 18.5 billion coins of Stellar Lumen that are being circulated. If we compare it to Ethereum which is 98 million. So even if its market capitalization matches that of Bitcoin’s which is $180 billion, its value would be approximately $10. 

The Potential Of Stellar

Stellar Lumens is more useful in the South Pacific, where it is used for more than 60% of the cross border payments in the exchange corridor of retail. IBM and Stellar are planning to incorporate banking structure to some of the islands that are most isolated in the entire world and which do not get access to the normal financial services that we are quite used to. 

This section of the world is chosen as they fall beyond the major corridors for trading and has a combination of a mature and developing economy that ranges from Australia to Vanuatu. This is a new initiative so it may widen outside the area once it starts to receive more fame. Lumens is being used by IBM for providing fuel to this initiative. 

Apart from this, another potential way for Stellar is the renewable energy that may grow in the future. Currently, the crowd sale on the internal exchange of Stellar is being held by Irene Energy. It uses AI and blockchain to enable the users to choose among the energy providers for them to receive energy. 

Verdict: Is Stellar Lumen Worth Buying?

Stellar Lumens can be termed as one of those cryptocurrencies that sets itself aside from the huge crowd of similar types of digital currencies. It is more individual oriented. So it can be said to be the best altcoin one should consider buying for 2021. This is the reason one can expect the price prediction of XLM to rise further in the coming future.

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