Cryptocurrencies by Tina Hamilton April 3, 2021
Stellar Lumens is a leading digital currency project developed by the Stellar Development Foundation, which offers services similar to Ripple. The Stellar cryptocurrency token is called Lumen that trades under the symbol XLM. Stellar helps to create, send, or trade digital representations of all forms of money, be it dollars, bitcoin, pesos, or others. The traders can utilize the token (Stellar) on the Stellar network, a blockchain-based distributed ledger network connecting people, banks, and payments systems, to facilitate low-cost and cross-asset transfers of value. In other words, the cryptocurrency is designed to connect all the global financial systems on a single network.
The Stellar network is a decentralized peer-to-peer network, which helps to send money and convert currencies. The network allows one type of currency to be sent from a peer, which arrives as a different currency at the receiver’s end. During this journey from the sender to the receiver, the stellar network facilitates several currency transitions, provided the straight currency pair swap is available. In case the currency pair swap is not available, and there is a demand for the initial currency from a Lumens holder, the network searches for a pair of Lumens as the destination currency. Thus, even if a commonly traded pair is not available, the Stellar network ensures an easy transition between various currencies. Anchors facilitate the exchange of currencies within the network by holding a deposit and issuing the credit in a different currency. Due to the presence of all anchors on the same network, the currency transition process is incredibly fast.
Like every other cryptocurrency, Stellar Lumens also has some pros and cons:
Overall, Stellar Lumens were invented to eliminate the problems existing in cross-border transactions like high fees and lengthy transaction times. Lumens seek to provide a quick and inexpensive solution to dispel these limitations and thus help in sending money across the world. The Stellar team aims at disrupting traditional banking systems and payment networks. In its vision, Stellar will be allowing ordinary coders and developers to include robust currency exchange and trading systems into their websites and applications. Thus, people worldwide having a basic hardware setup and an active internet will have access to the financial systems.