Increasing popularity of stellar lumens, stellar lumens make you a millionaire?
Any sort of currency can be exchanged on the popularity of stellar lumens open-source, decentralized network and protocol (fiat money like the Dollar or Euro and cryptocurrencies like Bitcoin). National and international transactions can be made with Stellar regardless of the currency kind.
Mt. Gox co-founder Jed McCaleb and Ripple co-founder Joyce Kim launched the Stellar network in 2014 as a cryptocurrency exchange and remittance network. It was the goal of Stellar to develop a worldwide payment system that would allow for secure and rapid cross-border transactions.
Stellar’s native cryptocurrency, also called Stellar, was launched at the same time as Stellar. Lumens and XLM were then rebranded for the native crypto, which was then dubbed lumens (both names used interchangeably). Lumens, however, are not the only currency accepted by the network.
As of April 20th, 2022, there are over 4.3 million Stellar accounts (Stellar.org), and 1 lumen is worth $0.27 AUD.
The popularity of stellar lumens:
Since 2018, Stellar has seen a dramatic increase in both the number of accounts and the number of transactions. There are numerous explanations for this. In addition to being built on blockchain technology, Stellar is also totally decentralized, making it a safe and secure cryptocurrency.
Instead of relying on the Proof of Work (PoW) consensus system used by Bitcoin and other widely used crypto networks, Stellar relies on the Stellar Consensus Protocol (SCP). In contrast to PoW, SCP has a substantially lower latency and a faster consensus time, requiring fewer resources. Thanks to SCP, transactions can be completed in as little as 2 to 5 seconds.
Stellar charges consumers a flat cost for each transaction they perform. Cross-border transactions are expensive on most networks (conventional and decentralized banking systems); however, Stellar charges a flat rate. Thanks to Stellar, transferring money between individuals and institutions has never been safer, faster, or more economical.
What was the purpose of introducing stellar lumens?
Three reasons prompted the creation of cryptocurrency lumens.
First and foremost, it was to ensure that the blockchain ledger was not being used as a spam-infested generic database. In order to avoid the formation of spam accounts, people using Stellar are required to keep a minimum of one lumen in their account.
It’s also for the sake of preventing the use of a single national currency as a medium of exchange. Lumens, a new and independent currency, aspires to maintain its impartial value and independence from political and economic forces. When making a transfer, only the local currency exchange rate at the time of the transaction is considered.
Keeping a universal cost for utilizing Stellar is the third reason for this change.
Stellar’s network architecture
In order to transport fiat monies from traditional banking systems to the Stellar network and the other way around, Stellar relies on anchors. If you’re looking for an anchor, you’re looking for a financial institution that issues a fiat currency. Stellar can be used with these anchors.
Traditional means of initiating a transaction are used by the anchor (like an online transfer or a cheque). After accepting the deposit in fiat currency, the anchor transforms it to Stellar Lumens (an equivalent digital token).