![]() The blockchain underlying Stellar Lumens is controlled by a nonprofit organization, the Stellar Development Foundation. The first for crypto bulls is the fact that, like Ripple, Stellar is centralized. The optimism toward Lumens thus does make some sense. It’s an intriguing offering with a number of potential use cases. Stellar can get around that problem, too, and the platform highlights a firm named SatoshiPay (an ode to the pseudonymous Bitcoin founder) which is trying to do precisely that. Even though those fees often are only a few cents, they can take up a chunk of revenue garnered from, say, selling access to a single online article for 99 cents. The likes of Visa (NYSE: V) and Mastercard (NYSE: MA) charge a per-transaction fee. Again, traditional banks require fees that are significantly higher. In theory, the platform can be used for remittances to foreign countries, cross-border payments, and other applications.Īt least as far as Stellar goes, processing times should be far faster: the platform claims “ near instant transaction times,” while banks might require several business days. Obviously, on Stellar the buyer is exchanging a dollar token for a peso token, but the end result is the same. Stellar’s low costs (transaction fees are low) and speed make this potentially a more attractive process. Via Stellar, a buyer can then exchange, say, dollars for Mexican pesos. On the Stellar platform, an entity can issue financial tokens backed by fiat currencies. Tether (CCC: USDT-USD) is one of the best known, and Facebook (NASDAQ: FB) has made its own attempt with Libra. One obvious use case for the platform is so-called ‘stablecoins’. But while Ripple focuses on banks, Stellar generally (though not exclusively) targets individuals and small businesses. ![]() It’s a similar proposition to that of Ripple, in fact. Understanding Stellar LumensĪt its heart, the Stellar Lumens network aims to make cross-border payments frictionless. The question for XLM going forward, particularly after ~200% gains year-to-date, is whether an evolution is enough. That’s not coincidental the two coins share the same co-founder. ![]() Much like Ripple (CCC: XRP-USD), Stellar Lumens is an evolution, not a revolution. In some adherents’ eyes, the point of Bitcoin (CCC: BTC-USD) or other ‘altcoins’ is to replace fiat money. The bad news is that, particularly for ardent cryptocurrency bulls, that mission isn’t quite enough. As the foundation behind the platform puts it, Stellar Lumens “ makes money borderless.” The good news is that the case for the Stellar Lumens network and the underlying Lumen token is relatively simple. ![]()
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