When was Stellar (XLM) Launched? This is Its History, Investors Must Know!

Bittime - Curious about the history of Stellar (XLM)? Find out the history and how it works in this article, come on!

Stellar (XLM) is a blockchain network designed to speed cross-border transactions at low costs. 

But when did Stellar launch, how does it work, and why is it important for investors to understand its history? This article will discuss all of this in depth.

What is Stellar (XLM)?

Sumber: The European Business Review

Stellar is a blockchain network that aims to simplify global payment transactions. In contrast to Bitcoin which focuses on storing value, Stellar is designed to connect financial institutions, companies and non-profit organizations so they can make transactions more efficiently.

The native currency of this network is Lumens (XLM), which is used to pay transaction fees. With its energy-efficient and low-cost architecture, Stellar is suitable for organizations with limited IT budgets, such as charities and small businesses.

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How Stellar (XLM) Works

Stellar uses blockchain technology with distributed ledger which is updated every two to five seconds. What makes Stellar different is its consensus protocol, namely the Federated Byzantine Agreement (FBA).

Unlike Bitcoin which requires a large network to approve transactions, Stellar takes advantage whose slices or a small group of trusted nodes for validation. This allows for faster transaction processing, and can even process thousands of network operations per second.

The Stellar Network also addresses the complexities of traditional cross-border transactions, such as Nostro-Vostro accounts, which usually involves currency conversion and account reconciliation. With Stellar, cross-border transactions can be completed in seconds, without the need to go through a lengthy process.

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When Stellar (XLM) Launching?

Stellar was launched in 2014 by Jed McCaleb, co-founder of Ripple and former manager of Mt. Gox, with Joyce Kim. The Stellar Protocol was originally a fork of the Ripple code, but later developed into a standalone system.

Stellar's ultimate goal is to process up to 60% of cross-border payments in certain regions, such as Australia, Fiji and Tonga. With this technology, a farmer in Samoa can sell his products directly to buyers in Indonesia without any obstacles.

In 2016, Stellar entered into a partnership with Deloitte to develop payment applications. A year later, more than 30 banks signed a partnership with Stellar to speed up cross-border transfers. 

However, the project has also faced criticism, including concerns about token distribution Lumens which is managed by the Stellar Development Foundation (SDF). To assuage these concerns, in 2019 SDF destroyed 55 billion tokens Lumens.

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Conclusion

Stellar (XLM) is one of the blockchain innovations that offers solutions for cross-border transactions with low costs and high efficiency. 

Despite challenges such as competition and node centralization, Stellar remains an attractive option for investors and institutions looking for modern payments technology.

FAQ About Stellar (XLM)

1. What is the main function of Stellar?

Stellar makes cross-border transactions easy with low fees, high efficiency, and without complex traditional banking processes.

2. What is Lumens (XLM)?

Lumens (XLM) is the native currency of the Stellar network used to pay transaction fees and provide liquidity.

3. Is Stellar safe?

Stellar is designed with efficient and secure protocols. However, investors still need to be careful of the potential risks of node centralization.

4. Can XLM reach $1?

The potential increase in the value of XLM depends on market sentiment and global adoption of Stellar technology.

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Reference 

Coinhouse, Stellar (XLM), accessed December 20, 2024.

Investopedia, Stellar Blockchain: Overview and History, accessed December 20, 2024.

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