Stellar is a platform created for financial services, such as money transfers, microtransactions, money transfer delivery, as well as currency exchange, cryptocurrencies and others.
Based on the protocol of Ripple Labs, and subsequently moving to its own platform, Stellar operates as a non-profit organization, which involves famous people from the technology space.
What is the Stellar currency?
Like the XRP currency of Ripple Labs, Stellar (also known as Lumen or XLM) has a very low individual value. However, Stellar’s overall market share positions it among the top cryptocurrencies worldwide. Stellar’s approach is relatively different from other cryptocurrencies, as some of the organization’s announced missions behind it include fighting poverty and providing a financial solution for individuals without bank accounts.
Who should include Stellar in their portfolio?
Cryptocurrency Traders: As Stellar is one of the world’s leading cryptocurrencies, traders and investors who focus on cryptocurrencies may consider investing in it as part of a well-balanced portfolio.
Believers in blockchain technology: The main application of the Stellar platform is in the field of finance, one of the industries that first adopted blockchain technology. So, those who believe that the technology will expand and more and more businesses will use it can buy Stellar.
Daily traders: As with all cryptocurrencies, Stellar can increase its price significantly within hours. So daily traders looking for a quick profit can also take advantage of the currency.
Technology for lovers of social change: One of Stellar’s missions is to help reduce poverty and offer solutions to societies that do not have access to banking services. Investors can buy Stellar as a way to help the organization promote its mission.
What drives the price of Stellar?
As with many of the leading cryptocurrencies, Stellar shone on the market in 2017, showing a huge price increase and reaching a market share of billions of dollars. And although the currency then jumped dramatically, there are other factors that can affect its price. Because it was created primarily to support real applications, its price is influenced by cryptocurrency and external factors:
Bitcoin: The first cryptocurrency still strongly dictates the market. Despite the hundreds of new cryptocurrencies introduced since the advent of Bitcoin, it is still the most influential, and when it drops in price, it often affects other currencies.
Ripple Labs XRP: Since the way Stellar works is similar to the Ripple Labs protocol, it is reasonable to believe that the two currencies are more or less related. So a movement in the price of one can affect the price of the other.
Mass application: Stellar’s protocol can be used for many financial applications. Therefore, every time it is adopted by a well-known company, it can increase the prestige of the currency and as a result its price jumps.
Helping society: One of Stellar’s main causes is to help disadvantaged people gain access to financial services. The eventual success of the organization can lead to financial benefits for their currency.
Stellar’s protocol: Makes money smarter
Stellar’s protocol allows the transfer and exchange of various currencies and cryptocurrencies, using Lumen as an intermediate currency. In addition, because it is blockchain based, it is built in a way that provides both parties with the best possible exchange rate. The platform automatically locates the best rate for each transaction and charges parts of the XLM as a result, resulting in a transaction having a commission of less than a cent.
In this way, the platform attracts a lot of attention to the technological and financial environments, providing some very interesting partnerships. For example, IBM chose Stellar to be its platform for international payments. The decision aims to drastically reduce transaction time from one country to another, and this has caught the attention of other large financial institutions.