A Quick Guide to Stellar Lumens (XLM)

By Aleksandra Wilson
3 min read December 23, 2021

Released in July 2015, Stellar Lumens (XLM), in simple terms, is an open network that enables money to be moved and stored. The protocol’s main goal was to boost financial inclusion. Although the priorities changed, the goal became to help financial institutions connect by utilizing blockchain tech.

The network has its token called Lumens, and it functions as a bridge to make trading assets less expensive across borders. The point of all this is to challenge the current payment providers, who usually charge high fees for a service alike. 

Does any of this ring a bell? If yes then it’s worth mentioning that the Ripple Labs protocol has initially been the base for Stellar Lumens (XLM). A hard fork is what created the blockchain. Eventually, the team in charge rewrote the core code to be compliant with the new target.

About the Founders 

In 2013 after leaving Ripple because of a disagreement about the company’s future direction, Jed McCaleb decided to found Stellar with Joyce Kim. In 2020 McCaleb explained the rationale behind Stellar. He stated that the complete original design has different forms of value where fiat currencies run parallel with each other and crypto-assets. That was the critical point to making this project mainstream.

McCaleb had made it clear that he wanted to ensure that Stellar Lumens (XLM) could provide people with a new way of moving their fiat into cryptocurrencies. The goal is to remove the friction users experience when they send money to other parts of the world. 

The current CTO of Stellar Lumens (XLM) is McCaleb. He also serves as co-founder of the Stellar Development Foundation. The foundation aims to improve the world’s economic potential by making markets more accessible, money more fluid, and empowering people.

What Is So Special About Stellar Lumens (XLM)?

First, fees are a sticking point for many users around the world. Although, a high cost while making a payment cross-border isn’t just a problem with fiat-based payment systems. Usually, Fees for transactions tend to go sky-high on blockchains such as Ethereum and Bitcoin because of congestion.

Stellar Lumens (XLM) has a unique transaction cost of only 0.00001 XLM. Considering that one unit of the token costs only a few cents, users can keep more money. Some projects have secured partnerships with fintech firms and big tech companies.

 A few days ago, IBM and Stellar partnered up and launched World Wire. The project enabled big financial institutions to request transactions to the Stellar network and utilize bridge goods like stablecoins. While other blockchains possess community funds, Stellar allows its users to vote on the support’s direction.

How Many Stellar Lumens (XLM) Are in Circulation?

In 2015, when the network launched, Stellar issued a total of 100 billion XLM, but things have changed since then. Currently, the total supply of XLM stands for over 50 billion, and 20.7 billion are in circulation. 

How Is the Network Secured?

The Stellar network uses the Stellar Consensus Protocol to secure the project. The protocol claims to have four main properties: low latency, decentralized control, flexible trust, and asymptotic security.

Through this protocol, everybody can join the process of achieving consensus, and more than one entity can end up with most of the deciding power. Transactions are confirmed cheap and fast; all it takes is just a few seconds. Also, safeguards are set in place if attackers try to join the network.

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