What is


Stellar is an open-source, decentralised platform that connects banks, payments systems and people. It was designed to facilitate fast, low-cost and secure cross-border transactions.


What is Stellar?

Stellar is an open-source, decentralised platform that connects banks, payments systems and people. It was designed to facilitate fast, low-cost and secure cross-border transactions.

Stellar was founded by Jed McCaleb, a former co-founder of another popular cryptocurrency (

), and by Joyce Kim, a former lawyer. Stellar was initially released on July 31st, 2014 and has always been supported by the non-profit, Stellar Development Foundation.

This Foundation was created in collaboration with Stripe CEO, Patrick Collison, and the company received 2% or 2 billion of the initial stellars in return for its seed investment.

From the start, Stellar had an impressive growth, achieving 3 million unique users by January 2015, and by April 2015, the Stellar Development Foundation upgraded the network to run on a new consensus algorithm, which went live in November of the same year. This new algorithm used a cryptocurrency protocol or SCP (Stellar Consensus Protocol), created by David Mazieres, a Stanford University professor.

The Stellar network is based on blockchain technology. It is basically a decentralised network of servers that run distributed ledgers.

The ledgers update every transaction, with each complete log available on every server. The servers communicate with each other, syncing the ledger every 2-5 seconds. This communication process is what is known as consensus.

To send payments on the Stellar network, you will have to be issued credit by Anchors. Anchors essentially act as a link between any particular currency and the Stellar network, and one will need to exchange debit for credit with an Anchor on the network. In exchange for your deposit, credit will be issued to your virtual wallet, which can be sent or received on the network between participants.

A major benefit is that Stellar supports a distributed exchange model. This then allows a user to send a payment in a particular currency, such as USD, even though they may be holding EUR credit. The Stellar network will perform the forex conversion automatically at the best available rates. In addition, the recipient of the funds can then withdraw the funds through a partner institute, such as a bank.

Stellar and Lumens

Stellar has its native cryptocurrency called Lumens. It uses Lumens as the bridge currency (or cryptocoin) on its network. As the native asset on the Stellar network, Lumens (or XLM) serve two important functions: they facilitate seamless multi-currency transactions as well as discourage DoS attacks on the network by attaching a nominal fee of 0.00001 lumens on every transaction. DoS attacks are usually malicious attempts by unethical participants who may attempt to flood the network.

All three terms, Stellar, Lumens and XLM, are used interchangeably, though Stellar is the blockchain network, Lumen is the cryptocurrency and XLM is its trading symbol.

XLM has generated investor attention because of real-world use cases of the Stellar network. In August 2014, Mercado Bitcoin, the first Brazilian Bitcoin Trading exchange, announced it would be using the Stellar network and in 2016, Deloitte announced its integration with Stellar to build a cross-border payments application, Deloitte Digital Bank.

Notably, since 2017, Stellar has had a long-running partnership with technology giant IBM. IBM has been using XLM for its real-world blockchain solutions, and the company even announced that it is not planning to release its own crypto token, which further cements the case for XLM being IBM’s token of choice for cross border payment solutions. In January 2018, Mobius Network ran its ICO (initial coin offering) on the Stellar network.

Like Ethereum the Stellar platform also allows users to develop other decentralised apps (dApps) and tokens. There have also been other stablecoin projects, notably USD Anchor, which are fully backed by fiat currencies.

Stablecoins facilitate easy fiat-to-crypto exchanges, and they also help to eliminate the volatility concern of cryptocoins. Naturally, all projects undertaken on the Stellar platform will boost the profile and appeal of XLM coins.

Lumen’s Price

At its launch in 2014, the Stellar network had 100 billion stellars. Stellar.org intended to distribute the initial 100 billion lumens as follows: 50% given away to individuals; 25% given away to partners who included governments, institutions, businesses and NGOs; 20% to Bitcoin and Ripple coin owners; and finally, 5% was reserved for the organisation’s operational expenses.

The giveaway is extremely important for Stellar, as it allows the network to expand its reach as well as achieve a more inclusive digital economy.

The Stellar network has an integrated fixed inflation mechanism, which sees new XLM coins added to the network at a rate of 1% per year. As well, funds raised from base fees on the network are added to the inflation pool.

As of January 2019, 8.65 billion Lumens had already been distributed, with the circulating supply standing at 19.16B. At the same time, the total supply of Lumens stood at 104.68 billion.

XLM has had an interesting trading history. Its ICO was presented on August 1st, 2014 when it started at $0.15. The ICO raised $39 million. By the end of 2014, the XLM value had grown fivefold, and in May 2017, XLM spiked from $0.00547 to above $0.047 in just over 3 days.

The subsequent cryptocurrency rally saw the XLM coin post its all-time high of $0.91 in January 2018. After that, it fell, alongside the entire crypto market, but it has been resilient enough to lose about 30% of its value when most cryptocoins have posted an average of about 90% losses. As of January 2019, XLM was trading at circa $0.08 with a market value of about $1.586 billion (~456,927 BTC).

Stellar is one of the few networks with on-going real-life use cases. Stellar’s near-zero fees have lowered the costs of remittances and even made it possible to make micropayments cheaply.

Its real-time settlement of 2-5 seconds is a leader in the industry, while the company has also set the pace in international mobile money integration. Alongside IBM and Deloitte, Stellar also has huge working partnerships with Parkway Projects and TEMPO Money Transfer. As more partners are incorporated, XLM will likely attract even more demand.



by WooHoo Ireland


Woooo Fx Education

Camden Street Lower, St Kevin's, Dublin 2, Ireland D 02 XE 80 | +353-214-651-000 |info@woohooai.com

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