What is Stellar Lumens

Stellar is an open source network with the same blockchain technology used by bitcoin. But unlike bitcoin, Stellar’s transactions settle in 2 to 5 seconds allowing users to quickly exchange government-backed currencies. Stellar’s native coins are officially called lumens, or xlm. The best way to answer ‘what is Stellar lumens’ is to compare it with Ripple. Stellar lumens (xlm) is to the layman what Ripple (xrp) is to banks and financial institutions.

The year 2017 saw big names like IBM and Deloitte becoming Stellar partners, and sure enough, after these partnerships were officially announced, the list of companies accepting Stellar lumens has been on the rise.

How is Stellar Lumens Technology Different

The Stellar platform is a distributed ledger, which is maintained by a consensus algorithm rather than mining. The Stellar consensus protocol enjoys four key properties: decentralized control, flexible trust, low latency, and asymptotic security.

Bitcoin uses a proof of work consensus mechanism, Ethereum used to use proof of work, but will be moving to a proof of stake consensus mechanism. The chart below will give an idea of how the Stellar consensus protocol compares with other consensus mechanisms.




Consensus

Mechanism Decentralized Control Flexible

Trust Low

Latency Asymptotic Security Proof Of Work ✓ ✗ ✗ ✗ Proof Of Stake ✓ Maybe ✗ Maybe Byzantine Agreement ✗ ✓ ✓ ✓ Tendermint ✓ ✓ ✗ ✓ Stellar Consensus Protocol ✓ ✓ ✓ ✓

The Stellar network is also a completely distributed exchange. This is what allows for cross-border and cross-currency transactions with ease – We’re talking thousands of transactions per second that get confirmed in less than 5 seconds For example, users can send a transaction from their US Dollar balance and have it arrive anywhere else in yen, euros, or even other cryptocurrencies, faster than it takes to read this paragraph.

Application of Stellar Lumens: List of Businesses accepting Stellar Lumen Currency

In a bid to usher in a new and inclusive global infrastructure for payments, organizations around the globe, including financial institutions, payment aggregators and technical specialists use Stellar and Stellar lumens to facilitate fast, low-cost transactions.

Below is a list of early adopters and businesses that accept xlm currency. The list will give the reader an idea of Stellar lumen applications and demonstrate that investors need not worry about how to spend Stellar lumens in the future.

IBM – One of the world’ foremost hardware, software, and tech consulting companies.

Deloitte – a leading global finance and technology consulting firm whose clients include 80 percent of the Fortune 500 companies

Telindus – A leader in Data Management, Cloud Services, Fixed/Mobile Telecommunications, ICT Infrastructure & Security. Delivers innovative & tailor-made solutions to the Financial Sector to help improve operational processes and enhance client Experience.

Stripe – This suite for APIs (application programming interface) powers commerce for businesses of all sizes.

Wangxiang – This frontier research institution is focused on blockchain technology.

LeEco – A leading global company that seamlessly blends devices, content, applications and distribution in a first-of-its-kind ecosystem.

bext360 – develops technologies which strengthen local businesses and communities in emerging economies.

Factury – This is a blockchain-powered secondary market for loans originated by non-bank lenders.

Gingkoo – An IT Consultancy firm for the financial services industry.

Whiterock – A Digital payments company specifically designed for cross-border payments to and from West Africa.

Wipro – This Indian software behemoth delivers, IT Services, IT Outsourcing, Business and Technology Consulting, and System Integration Solutions.

Hijro – A financial operating network for global trade powered by distributed ledger technology.

Distributed Lab – A cryptocurrency & decentralized technology expertise center that specializes in custom blockchain development, and creation of innovative products and architectures.

MONI – A pioneer of consumer driven finance with a vision is to provide a ‘banking’ account to every person with a mobile phone.

Oradian – A Core microfinance system and platform that enables easy to use microfinance management.

Quantoz – The Company that pioneered pay-per-use models through secure electronic IoT payments to non-connected devices.

Rehive – The quickest and most inexpensive way to build, launch and scale your web or mobile-based payments app.

Anglo African – A leading player in the Cloud, Analytics, Digital and IOT space headquartered in Mauritius, with fully owned subsidiaries in Madagascar, Rwanda, Zambia and Zimbabwe.

Hashcash Consultant – This company builds financial solutions for banks and financial institutions over blockchain.

Poseidon – An eco-friendly company that uses Stellar blockchain technology to access the carbon market.

Stellar Lumens Potential

The following excerpt from a review of MIT technology on Stellar lumens, is an indication of Stellar lumens’potential.

MIT Technology Review:

Bitcoin’s design rests on a process called “mining,” in which people run software that races to solve mathematical puzzles. However, it currently takes around 10 minutes for a new transaction to be confirmed by the miners, and bitcoin mining is very energy intensive.

The new SCP (Stellar Consensus Protocol) system also relies on people running software that communicates over the Internet. However, trust is integral to the process as each person running the software must identify a few other trusted participants to complete a transaction. The numbers show how this will allow this SCP system to verify transactions faster and with less energy.

SCP is also safer as it uses stronger cryptography. One can crank up the hardness of SCP to the point it’s infeasible for a well-resourced attacker,” which is not possible with bitcoin.

Agreed, Bitcoin has the first-mover advantage, but as Stellar is built with the premise of avoiding bitcoins limitations, it has a brighter future potential. So it’s not surprising that a giant like IBM has tied up with Stellar.

IBM and Stellar:

2017 saw Big Blue step firmly into the cryptocurrency world with its partnership with Stellar. While initially limited to cross-border payments involving British pounds and Fijian dollars, the partnership will soon handle seven fiat currencies in the South Pacific – including the Australian dollar and the New Zealand dollar.

The IBM and Stellar deal is being regarded as a crucial thumbs-up for blockchain technology. While IBM’s blockchain solutions are designed to complete much of the workflow around transaction clearing, the actual settlement will be conducted using Stellar’s blockchain. Stellar’s lumen will allow for nearly instant exchange without the consumer or buyer ever touching the cryptocurrency itself.

The IBM and Stellar partnership goes beyond just technical implications. It is evidence of the increasing collaboration between blockchain firms and the financial world.

Stellar Lumens (XLM): Our Review

With its core ambition to give access to the platform from anywhere in the world, its flexibility is allowing users to transact in fiat and digital currency, its strategic partnerships with world leaders, and its state-of-the-art technology, we see Stellar as the future of banking.

Benefits of Stellar Lumens

While the basic premise of Stellar is very similar to Ripple, the latter was designed for banks and financial institution while the former (Stellar) is conceptualized with the common man’s needs in mind. The core benefits of Stellar lumens, or to be more precise Stellar are:

Real time transactions (2-5 seconds)

Regulatory compliance

Automatic currency exchange

International reach with a single integration

Cryptographically secure transactions

Payments that move with the smoothness and speed of email

Low fee for micro-transactions ($0.01 handles about 600,000 transactions)

With its Swiss Army Knife-like versatility Stellar has the potential to revamp peer-to-peer transactions on a global scale.

With IBM, KlickEx, Deloitte, Parkway Projects, and Tempo using Stellar for real-world adoption, Stellar lumens’ potential is finally being tapped into. And with everything going according to plan to make Stellar the future of currency exchange, things sure looks bright for the layman’s Ripple.