The crypto currency Stellar

Logo of the crypto currency Stellar
Logo of the crypto currency Stellar

Stellar was created in 2014 by Jed McCaled and Joyce Kim. Stellar's ultimate goal is to create a worldwide network that allows anyone to make money transfers through the Stellar network easily, cheaply and quickly. Stellar is a not-for-profit organization and even large companies like IBM are interested in the technology. Stellar itself is the network in which transfers are carried out, it is not a classic crypto currency such as Bitcoin, but only the network in which transactions are carried out.

The currency of Stellar itself is called Stellar Lumens or also briefly called Lumens. Lumens are needed to pay the costs of transactions. Transactions in Stellar's network can be done worldwide and the money arrives very quickly at the recipient. With other crypto-currencies, transactions can take two to three days in extreme cases, and with Stellar, transfers normally take between two and five seconds. Also the transfer fees are only a fraction of a cent. Therefore Stellar is suitable very well for the execution of world-wide transactions.

The network also offers an automatic exchange market, so you can automatically exchange one currency for another during a transaction. Here the cheapest provider in the network is automatically searched for and the original currency is automatically changed into the desired currency.

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Youtube-Video: What is Stellar? Stellar XLM Explained Simply

The biggest advantage of Stellar over other crypto currencies

Other crypto currencies also offer fast transfers at cheap prices, but there are always problems with scalability. This means it is very difficult for many classic crypto currencies to perform several thousand transactions per second. For digital currencies, whose goal it is to be used worldwide, this is a big disadvantage, because there the transaction costs and the duration of the execution of a transfer increase, the more people use this currency. Stellar's network has been tested and found that even a large number of transactions per second can be done quickly and cheaply.

Lumens cannot be created either. Stellar has no mining, instead 100 billion lumens were created when the network was created. These increase by 1% each year. When a transfer is made, the fees are automatically paid to the network and these are used to make the 1% increase. The lumens are still being distributed, so not all of them are in circulation yet.

Advantages of Stellar

The key advantages of Stellar are the very low transaction costs and the fast execution of transfers. Also with regard to future developments one thought here and even enormous quantities of transactions are problem-free feasible. Mining of crypto currencies requires also very much current. This is of course not very good for the environment. It is estimated that Bitcoin Core mining for example already consumes about as much electricity as all of Ireland. Of course, no one can say exactly that, but one can be sure that a great deal of electricity is used here. So this is where Lumens can score points, because it is not possible to mine for lumens.

  • A transfer takes between two and five seconds
  • A transaction costs only a fraction of a cent
  • Good for the environment, as no electricity is used for mining.

Disadvantages of Stellar

Stellar, unlike Monero for example, does not offer absolute anonymity. Of course, transactions are not easy to trace, but there is no complete security here. Another big disadvantage of Stellar is the creation of a wallet to be able to participate at all. You have to create a wallet and then buy lumen on a crypto exchange and transfer it to your wallet. This functions in such a way also with other crypto currencies, but if a network sets itself the goal of making world-wide easy access possible to each humans to it, one should simplify this procedure substantially.

  • No absolute anonymity
  • Creating a wallet and buying lumens confusing for newcomers

Technical background

Since Lumens is technically very different from other crypto currencies, it does not use block chain, for example. Stellar is decentralized. This means that no organization manages the transactions, which are confirmed by many users and recorded in the "ledger". The ledger is, so to speak, the database in which transactions and wallet balances are stored. Now anyone can create a so-called node. A Node confirms transactions in the Ledger, when many Nodes have confirmed a transaction, it is considered to be completed.

As an example: I transfer 10 Euro to a friend. This transfer is sent to the first node, this one confirms, from there to the next node, this one confirms again. After a certain number of nodes have been passed, the money ends up with my friend and the transaction is recorded in the ledger. All nodes synchronize the data every few seconds. But only among the trusted nodes. In order to prevent hackers from gaining access here, only trusted nodes can confirm a transfer. A node becomes trustworthy when another node "knows" it. If I want to start a node, I have to be confirmed by a trusted node, so to speak. After this confirmation my node becomes trustworthy and can participate in the confirmation of transactions.

Are faucets available for Lumens?

Basically yes, but very rarely and also not very effective. Personally, I would rather use faucets for other crypto currencies and then exchange them for lumens on an exchange. Of course you can also search for faucets for Lumens, but there are very few faucets here and the seriousness and merit of these faucets leaves a lot to be desired.

Services where you can earn Stellar for free:

Rating Name Country Earnings Currencies Type
of Service
Payment
Proof
Start
Autofaucet Dutchycorp France Good Bitcoin Bitcoin Cash Dash Doge EOS Ethereum IOTA Litecoin Monero Ripple Stellar Tether Tron Zcash Bitcoin Faucets, Paid Clicks, Paid Surfing 2018
ESFaucet Canada Middle Bitcoin Bitcoin Cash Dash Doge Ethereum Litecoin Ripple Stellar Tron Zcash Bitcoin Faucets, Paid Clicks 2019
Allcoins USA Good Bitcoin Bitcoin Cash Dash Doge Ethereum Litecoin Monero Ripple Stellar Tron Bitcoin Faucets, Paid Clicks 2018

Should I invest in Lumens?

Like all crypto currencies, Lumens is very volatile, i.e. it fluctuates a lot. The market is highly competitive and nobody can predict which of the digital currencies will prevail. In any case, Stellar offers good conditions to be successful worldwide. However, an investment is also very risky here and one should in any case deal intensively with the topic of crypto currencies before investing money. It can happen otherwise fast that one loses his money.

Our conclusion to Stellar

With Stellar, a network has been created that solves many problems of digital currencies. Both the fast execution of transfers and the low transaction costs, even with thousands of transactions per second, definitely contribute to Stellar's ability to establish itself as a worldwide network for payments. By eliminating mining and a block chain, resources are also conserved compared to traditional crypto currencies such as Bitcoin. In May 2018, for example, Bitcoin's mining operations consumed as much electricity as the whole of Ireland needed. If Bitcoin ever becomes established worldwide, power consumption would increase even more. That would not necessarily be positive for the environment either. The Stellar network, on the other hand, consumes far less power, which is good for the environment. Stellar is currently on a road to success and is becoming more popular every day, but whether it will continue to soar is something that is written in the stars. One should definitely keep an eye on Stellar and Lumens, where a lot will change in the coming years in the market of digital currencies.

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