Will you participate in a cryptocurrency that helps people in various parts of the world transfer money to each other for a fraction of a cent? This should reshape the way people are able to send money across borders and this is the vision of Stellar.
Stellar is an open-source blockchain network that is fully transparent and aims to allow foreign exchanges of any form of currency. The team at Stellar works to build a single network that allows full accessibility by all financial channels globally. In addition to this, it does it in a very simple, inexpensive, and energy-efficient manner.
In this article, we’ll explore what Stellar is, how it all started, why you should invest in it, and tips for investing when you decide to do so.
What Is Stellar?
In essence, Stellar is a decentralized network with blockchain servers that run independently. What this entails is that it’s transmitted without having the control or influence of a single source among all the interconnected nodes within the Stellar network. As the network synchronizes and reaches a consensus, allowing even wide dissemination of the ledger.
Only the network, application, and framework are referred to by Stellar. Lumens (XLM) is, on the other hand, Stellar’s native digital currency that drives the network.
The key factor within the Stellar network is that any individual with the Stellar Core can set up a verification node (server) where the verification process is conducted using the Stellar Consensus Protocol (SCP).
Transactions also take place using what we know as ‘anchors’ in a more decentralized way. These anchors represent entities that individuals trust to be in charge of their deposits and distribute credits for those deposits into the blockchain. These anchors function as the bridge between the Stellar blockchain and the currencies.
Where Did It All Start?
In 2014, the project was founded in collaboration with former lawyer Joyce Kim and Jed McCaleb, founder of Mt. Gox and co-founder of Ripple.
Stellar Development Foundation, in conjunction with Patrick Collison, also came to be. Collison is the CEO of Strip, a corporation that is creating an automated payment system. Finally, in July 2014, Stellar with Stripe’s initial contribution of $3 million, was formally released. The project launched an ICO (initial coin offering) in the beginning in order to raise funds for expansion.
They succeeded in collecting $39 million throughout this ICO, and 100 billion Lumens were mounted. Following the popularity of the offering, a Brazilian exchange, Market Bitcoin, declared its acquisition of XLM in August 2014. This then was followed by more and more exchanges continuing towards XLM adoption.
The platform had gained around 300,000 users by January 2015 and its market capitalization moreover, exceeded $15 million. In November 2015, a new network upgrade was released by the Stellar Development Foundation bringing a new Consensus Protocol (SCP). It was developed by Stanford University professor David Mazières and was entirely new with special functionalities from every other protocol such as PoS or PoW.
Sceptics On Stellar
Stellar’s ability will be reduced if confidence is lacking in the production team; the production team owns the majority of the coins that will be dispersed in the future. Co-founder Jared McCaleb, faced a lawsuit by the SecuritIes Exchange Commision (S.E.C.) while he was at Ripple, which therefore damaged his reputation. If confidence is lost in McCaleb, this may be bad news for Stellar Lumens.
An additional point of possible concern is the size of Stellar’s staff, which is composed of just ten workers, three board members, and eight advisors. However, to soothe fears over the size of the squad, it is composed of business executives and experts. These include professionals and executives from WordPress and Y Combinator. Nonetheless, McCaleb had also founded Mt. Gox, which makes him someone who had previously supervised a $460 million hack. However, his reputation inside the tech industry and abroad has awarded him sponsorship and support from some of the brightest figures in the blockchain and tech communities.
Why Invest In Stellar?
Stellar Lumens is especially useful in the South Pacific, where it’s estimated to be responsible for 60 percent of cross border payments in the retail trade corridor. Stellar and IBM are taking financial services to several of the most remote places in the entire globe, which do not have exposure to monetary facilities that several of us may be accustomed to – creating a bank account for next to no income.
IBM also chose to employ Stellar Lumens to aid in building World Wire, which allows financial institutions to transfer funds anywhere in the world in a much cheaper and quicker manner than it has ever been. By working with IBM, Stellar has earned further prestige as well as access to the conventional financial world.
On top of IBM, there are numerous other institutions that have begun adopting the Stellar network. Some of them include:
- Anglo African
- Wanxiang Blockchain Labs
XLM’s market is determined by the pace of Stellar’s system adoption. While the platform provides sufficient features and functions which may or may not show in the digital coin’s price, the more Stellar gets embraced, the higher the price of Lumens. Stellar’s blockchain is one of the strongest and obviously helped by its renowned tech giants like IBM, Flutterwave, and French business Tempo.
At its peak, Stellar has managed to reach $0.93 on January 04, 2018. Now, the price of Stellar is $0.41. However, the coin’s steady success and growing acceptance of the network has led to positive price forecasts for 2021 and beyond.
Analysts say the price is more likely to trade in the $0.20 to $0.50 mark. On a brighter note, Coinswitch sees XLM soaring to $1 by 2025. However, if it does move backwards, the coin might probably take a hit to roughly $0.05 and remain in the spot for some time before going higher. Currently, Stellar is listed in the top 11 cryptos by market cap.
How To Invest In Stellar?
Investing in Stellar Lumens is a very simple process. You have to pick a crypto exchange where the coin is listed and make your investment. It’s crucial to understand that the Lumens trade under both the XLM and STR ticker depending on the network you’re on. The foundation chose to change its ticker from STR to XLM years ago, but some exchanges decided to retain the original ticker regardless of the option. A great place where you can buy Stellar is eToro. First, you have to create an account on the eToro platform, fund it and make your investment. The platform offers an inexpensive and friendly system to enhance your crypto experience.
Tips And Strategies Before Investing In Stellar
- Get ahold of a wallet
When it comes to the storage of your XLM, you have several choices to consider and many factors to think about. If you look more into making bigger investments in XLM or holding the crypto for longer periods of time, you might consider using hardware wallets. They keep your XLM locked offline in “cold storage.” The technique renders it difficult for online attackers to access your holdings. Or, you could use digital wallets as well. But make sure to pick a secure one. eToro has launched its authentic exchange and wallet eToroX where you can keep your coins safely.
- Don’t dive in too deep
A comprehensive financial strategy should be the first step. There are no promises that investments will yield great returns. So, what is your after-tax revenue vs. expense ratio, and how much money can you safely devote to investing?
Taking risks when it comes to finance leaves some individuals more tense and nervous than others. While some catch the chance when it comes and jump on a future opportunity, others tend to take caution before diving in deep. You should decide where you better belong in this situation, based on what kind of person you might be. It’s crucial to bear in mind that if things do not work out as we wish them to, you should only pay the amount you’re willing to sacrifice.
- It may be worth it to keep your XLM long-term
Stellar Lumens price has been increasing. Its overall market cap at the moment is $9.49 billion. Many analysts provide positive forecasts for it to reach up to $3 by 2025.
If the plan calls for it, try not to think too hard about what is upholding today. On the other hand, strive to pick a plan and expenditure target, stick to it, and maintain a long-term market view. When you learn more, throughout the time, it’s fine to adjust your plans to your benefit, just ensure that you have a target in mind along with good intentions.
- Keep up with modern trends to get the upper hand in forecasting
Growing the credibility of a perfect cross-border means of payments, Stellar is expanding its worldwide acceptance as a swift and cost-effective solution, which is capable of handling up to 1,000 transactions per second at 0.00001 Lumens, or only a fraction of a penny.
Stellar’s alliances with IBM and numerous other corporations, along with its large use in the South Pacific, where it is now responsible for 60 percent of cross-border payments in the trade retails sector, make XLM worth having a look at.
Particular patterns such as these are critical while trying to invest in cryptocurrencies in general, and specifically in Stellar. These will allow you to picture where the coin is headed and whether it has potential for future growth.
- Tax regulations also apply to Stellar
When you keep your coins, including XLM, for a year or less before selling it, buying it, or saving it, the gains are paid at the income tax rate and are short-term. However, because you hold the crypto for more than a year, the lower level of capital gains, which then is based on the federal income tax bracket. Some rules often obey related legislation.
No wonder that XLM is among the fastest-growing altcoins today. You should expect this trend to grow as more people invest in the cryptocurrency market. We hope this article has helped you better understand what is Stellar and we hope that our tips will help you to plan your investments better.
- Lumens (XLM) is Steller’s native digital currency.
- Transactions take place using what we know as ‘anchors’ in a more decentralized way.
- The team at Stellar succeeded in collecting $39 million throughout their ICO.
- Stellar Lumens is responsible for 60 percent of cross border payments in the retail trade corridor in the South Pacific.
- Stellar’s blockchain is one of the strongest and obviously helped by its renowned tech giants like IBM, Flutterwave, and French business Tempo.
- Analysts see XLM soaring to $1 by 2025.
- XLM is currently listed in the top 11 altcoins by market cap.