Overview of Stellar (XLM)
Stellar (XLM) is a cryptocurrency designed to facilitate fast, low-cost cross-border transactions. Unlike many traditional cryptocurrencies, Stellar aims to connect financial institutions, payment systems, and individuals through a decentralized network. Its consensus algorithm, the Stellar Consensus Protocol (SCP), enables quick and secure transactions, making it an ideal solution for remittances and international payments. The Stellar network can process thousands of transactions per second (TPS) with minimal fees, typically around $0.00001, positioning it as one of the most cost-effective options for global money transfers.
Since its launch, Stellar has gained popularity for its focus on financial inclusion and its ability to facilitate the cross-border transfer of both fiat and digital assets. It has established partnerships with major companies and financial institutions, cementing its role as a key player in the digital payments landscape. At the time of writing, XLM is priced at $0.2406, with a market capitalization of $7.44 billion. Over the past 24 hours, it reached a low of $0.2372 and a high of $0.2483.
How Stellar Works
Stellar operates using a unique decentralized protocol that allows assets to be issued and transferred seamlessly. The network uses anchors, which are entities that hold deposits and issue credits into the Stellar ecosystem. These anchors facilitate the conversion of fiat currencies and other assets into digital tokens that can be traded on the network.
One of Stellar’s standout features is its ability to settle transactions within 3–5 seconds, even for cross-border payments. This is made possible through its federated Byzantine agreement model, which ensures consensus without relying on energy-intensive mining. The native token, XLM, serves as a bridge currency, reducing the need for multiple intermediaries and lowering transaction costs.
Use Cases of Stellar
Stellar is widely used for:
- International remittances
- Micropayments
- Tokenization of assets, including stablecoins
- Integration with existing banking systems
Its flexibility and low fees make it a popular choice for businesses and developers looking to build financial applications.
Stellar vs. Ripple (XRP)
While both Stellar and Ripple aim to improve cross-border payments, they target different audiences. Ripple focuses primarily on banking institutions and enterprise-level solutions, whereas Stellar emphasizes accessibility for individuals and smaller organizations. Stellar’s decentralized approach contrasts with Ripple’s more centralized governance, giving users greater control over their transactions.
👉 Explore real-time trading tools
Frequently Asked Questions
What is the all-time high and all-time low for XLM?
XLM reached an all-time high of $0.9381 and an all-time low of $0.0012.
What is Stellar (XLM) used for?
Stellar is designed for fast, low-cost international money transfers and the exchange of digital and fiat currencies. Its decentralized network enables financial institutions, businesses, and individuals to transact with minimal fees and high speed. It is also used for cross-border payments, micropayments, and tokenizing assets like stablecoins.
Who oversees the Stellar network?
The Stellar Development Foundation (SDF), a nonprofit organization founded in 2014, oversees the development of the Stellar network. Based in the United States, SDF supports and promotes the Stellar ecosystem through partnerships with companies and financial institutions worldwide.
How does Stellar compare to Ripple (XRP)?
The choice between XLM and XRP depends on your goals. XRP is geared toward banking and corporate payments, while XLM focuses on financial accessibility for individual users. Stellar offers a more decentralized platform for asset transfers and tokenization, whereas Ripple is often used for interbank settlements. Technically, both networks provide high transaction speeds and low fees, but Stellar adopts a more open and accessible approach.
Who created Stellar?
Stellar was created in 2014 by Jed McCaleb and the Stellar Development Foundation. McCaleb, who also co-founded Ripple, designed Stellar to be a more decentralized and accessible platform for international payments.
Is Stellar (XLM) a good investment?
Stellar could be a promising investment for those interested in cross-border payment solutions due to its high speed, low fees, and partnerships with entities like MoneyGram and Circle. However, XLM’s price remains volatile, and it has not reached its 2018 all-time high of $0.87. Its market capitalization is also lower than that of leading cryptocurrencies. Investment potential depends on broader adoption and technological developments.
Where can I buy Stellar (XLM)?
You can purchase XLM on various cryptocurrency exchanges or peer-to-peer (P2P) platforms. On P2P platforms, users can trade directly with one another using fiat or other cryptocurrencies. Always verify seller ratings and follow security best practices when using P2P services.
Future Outlook for Stellar
Stellar continues to evolve with upgrades aimed at improving scalability and interoperability. Its focus on real-world applications, such as facilitating remittances and supporting central bank digital currencies (CBDCs), positions it for potential long-term growth. However, like all cryptocurrencies, it is subject to market volatility and regulatory developments.
For those interested in the practical aspects of using Stellar, it offers a robust platform for developers and businesses alike. Whether you’re looking to transfer funds internationally or tokenize assets, Stellar provides a efficient and cost-effective solution.