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Stellar Lumens: What you need to know about the decentralized exchange platform

The mission is “to promote global financial access, literacy, and inclusion”.

Stellar Lumens: What you need to know about the decentralized exchange platform

Stellar Lumens (XLM) is described as a completely decentralized consensus platform.

It is equipped with a built-in decentralized exchange that can be used to trade any currency or asset.

It was created by Jed McCaleb, the founder of the failed Mt. Gox exchange and co-founder of Ripple.

McCaleb created the Stellar network in 2014, following disagreements on the implementation of Ripple’s core principles.

Why it was created

In 2010, Jed McCaleb created ‘Gathering Online Exchange or Mt. Gox Exchange’, which was sold to Mark Karpeles. In 2014, Mt Gox went bankrupt and fraud charges were levelled against Karpeles after an incident involving theft of 850k Bitcoins from Mt Gox’s wallets.

Simultaneously, McCaleb and Opencoin created a new digital currency based on the Ripplepay protocol. Soon he left Opencoin, which later become Ripple, due to disagreements on core principles.

These developments apparently encouraged McCaleb to establish Stellar Development Foundation (SDF), a non-profit with a mission is “to promote global financial access, literacy, and inclusion”.

With the same mission, SDF launched the Stellar network and the Lumens (XLM) token in July 2014.

Who uses Stellar

The Stellar network is a system designed to help payments cross borders (and currencies) faster and cheaper than with traditional financial-system networks.  

Larger corporations such as IBM and Deloitte, and some banks with a focus in the South Pacific region primarily use the Stellar system for money transfer operations or remittance operations.

Stellar Lumens is very popular in the South Pacific region, where its estimated that around 60% of cross-border retail exchange payments are made using the platform.

Why its an alternative to Bitcoin

Stellar has some advantages over Bitcoin.

The platform is seen as easy to use, faster transaction and has lower costs.

Unlike Bitcoin, Stellar does not use Proof of Work to create new units and maintain the blockchain.

Instead, it uses Stellar Consensus Protocol (SCP) that allows payments to be made quickly and securely.

How big is it and is it here to stay

Stellar’s total market capitalisation of Stellar is over US$6.25bn and, according to Coinmarketcap, it is the 19th most valuable digital asset.

The platform is seen as one of the potential disruptors of the contemporary financial system.

Stellar may still be at an earlier stage in its lifecycle than Bitcoin and Ethereum ut its popularity with financial institutes and large corporates indicates that it is here to stay.

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