XLM cryptocurrency is the native digital currency of the Stellar network. Unlike other types of cryptocurrencies, Stellar features high transaction processing speed, energy efficiency, and scalability. Stellar crypto is ranked among the top 30 by market capitalization.
Stellar Cryptocurrency and Its History
The Stellar project was developed in 2014 by Jed McCaleb. His career began with the cryptocurrency exchange Mt.Gox, which he sold in 2011. After that, he became the CTO of Ripple. McCaleb was dissatisfied with Ripple’s high degree of centralization, which primarily focused on financial institutions. Therefore, he decided to create a decentralized version focused on frequent electronic payments.
In the summer of 2014, the Stellar Development Foundation (SDF) was established. Upon its launch, SDF received about $3 million in funding from Stripe, a company specializing in electronic payment development.
XLM cryptocurrency and its blockchain became operational in the fall of 2014. Initially, it was a copy of Ripple. However, in 2015, the company upgraded its blockchain, which began functioning on its own protocol — the Stellar Consensus Protocol (SCP).
In spring 2017, Stellar partnered with the IT company IBM.
Stellar crypto operates like a peer-to-peer payment network. The transaction fee is just 0.00001 XLM, making it convenient for daily payments.
Stellar Cryptocurrency and How It Works
The core of the network is the custom-built Stellar Consensus Protocol (SCP), which uses the following structure: a large number of equally entitled nodes participate in the creation of new blocks and transaction verification.
The process of reaching consensus and forming new blocks consists of:
- Proposal — nodes propose blocks for approval,
- Voting — nodes vote on the proposed blocks; if consensus is reached, a “ballot” is created, leading to the formation of a new block,
- Timeout — a mechanism allowing nodes to reject unresolved proposals and move to the next voting round.
The Stellar network operates three types of nodes:
- Observer — responsible for sending transactions into the network,
- Validator — participates in voting and confirms new blocks,
- Archiver — stores and updates the blockchain ledger.
This structure allows for processing over 1,000 transactions per second, with a confirmation time of no more than 5 seconds.
Stellar Cryptocurrency and Its Key Features
The virtual asset is traded on major cryptocurrency platforms. Within the Stellar infrastructure, XLM cryptocurrency performs four main functions:
- Paying blockchain transaction fees — 0.00001 XLM per transaction,
- Managing network accounts,
- Serving as an exchange mechanism within the Stellar blockchain,
- Acting as a bridge asset to support the liquidity of tokens created on the network.
XLM Cryptocurrency: Advantages and Disadvantages
Advantages:
- Fast and reliable transactions,
- Minimal transaction fees,
- Price growth potential,
- Open-source code attracting developers working on DeFi and DApps,
- Built-in decentralized exchange platform.
Disadvantages:
- Scalability is currently lower than Ripple’s,
- Occasional network delays,
- Low rewards for running a node compared to other blockchains,
- The project is still under development, with some plans yet to be implemented.
XLM Cryptocurrency Forecast
At the beginning of 2023, XLM cryptocurrency is priced at $0.093, with a market capitalization of over $4.5 billion.
Making any forecasts about Stellar is difficult, although some experts attempt it.
The projected XLM price, according to analysts based on available data:
- 2023 — minimum price — $0.12, average — $0.13, maximum — $0.16,
- 2024 — minimum price — $0.17, average — $0.18, maximum — $0.21,
- 2025 — minimum price — $0.25, average — $0.27, maximum — $0.31,
- 2026 — minimum price — $0.36, average — $0.38, maximum — $0.44.
The value of Stellar crypto depends on:
- supply and demand in the crypto market,
- the value of major cryptocurrencies,
- protocol updates,
- implementation of innovations,
- partnerships with large companies,
- news background,
- statements by famous figures,
- global political situation.
Mining Stellar is not possible due to the algorithm used. Stellar cryptocurrency can be purchased on a crypto exchange or through an exchanger. You can also receive Stellar through free airdrops occasionally conducted by the network.
When choosing a method, it is important to carefully review all conditions.
Coin Issuance
Initially, 100 billion coins were issued. Until 2019, additional coins were created weekly to support artificial inflation (1%). Later, the platform’s policy changed, and the issuance of new tokens was stopped. A coin burn procedure was also carried out.
Currently, the maximum supply is 50 billion XLM. About 25 billion coins are in circulation.
Stellar Cryptocurrency Prospects
The project has a roadmap based on three principles:
- creating new tools for global transactions,
- increasing brand recognition,
- maintaining network security.
The developers also aim to increase transaction volume fivefold, diversify the infrastructure, and attract banking partners.
The cryptocurrency project has long-term prospects, and XLM’s price has factors supporting its potential growth. Moreover, the platform is continuously evolving:
- the company is increasing the number of developers,
- the possibility of creating smart contracts and DApps could help the project compete with ETH,
- the emergence of new stablecoins.
XLM cryptocurrency is a promising digital asset that could rightfully compete with Ripple. Considering its tendency to secure long-term contracts with major organizations and its user-focused approach, the project is expected to enjoy high demand, potentially leading to a significant increase in Stellar’s price.
Read more in the cryptocurrencies section.