HomeBlockchainStellar Lumens (XLM): what it is and where to buy it

Stellar Lumens (XLM): what it is and where to buy it

Stellar Lumens (XLM) is a distributed blockchain-based ledger, designed and created to connect financial institutions and people from all over the world.

Its objective is to encourage the financial aspect related to cryptocurrency by creating truly global payment systems which are cheap and easy to use.

Essentially, the Stellar protocol works similarly to PayPal, but it is more flexible. To begin using it, it is obviously necessary to deposit lumens within the network.

Stellar Lumens (XLM): how it works

The Stellar network operates through what is defined as the Stellar Consensus Protocol, a decentralised peer network that functions in a correct and consistent manner thanks to the independence between the various peers. This network of servers synchronises and reaches consensus, guaranteeing the distributed aspect.

The network does not work like that of Bitcoin, there is no Proof of Work or mining, and the speed and efficiency achieved is considerably higher than that of BTC. Initially, the source code was similar to that of XRP, although the latest version that was released, Stellar Core, is quite different and uses an internal consensus algorithm.

Currently, it differs from XRP also in the way transactions take place. Banks work directly with Ripple in order to provide the intermediation services necessary to trade cryptocurrencies.

Whereas as far as Stellar is concerned, this is done in a more decentralised manner. XLM takes advantage of what are called anchors which, according to the whitepaper, are “entities that people trust to hold their deposits and issue credits into the Stellar network for those deposits. All money transactions in the Stellar network (except lumens) occur in the form of credit issued by anchors, so anchors act as a bridge between existing currencies and the Stellar network”.

XLM’s trading history

With regard to the trading of Stellar Lumens (XLM), the narrative is really interesting. At the end of 2014, it increased by about 5 times its initial value. This race against time ended early as throughout 2015, 2016 and even the beginning of 2017, the cryptocurrency lost value.

At the end of May 2017 its value went from $0.00547 to $0.047 in just 4 days, the reason for this sudden growth is still unclear.

After this shocking rise, XLM has more or less followed the market trend and, more generally, the trend of bitcoin. In January 2018 it recorded its ATH (All-Time-High) of over $0.91.

However, compared to many other cryptocurrencies, despite the fact that the bear market affected bitcoin in 2018, Stellar Lumens (XLM) held strong and lost “only” 50%, while many others recorded declines well over 90%.

XLM: where to buy them

Stellar Lumens (XLM) is one of the most popular cryptocurrencies today and is in the eleventh position for market capitalisation according to CoinMarketCap, just under Monero (XMR).

The main exchanges that guarantee trading pairs for this cryptocurrency are: