Over the last few years, one cryptocurrency that has been on the lips of all and sundry in the crypto market has been Bitcoin. Even though it has been around for a longer time, it took the market by storm in late 2020. However, a few other tokens in the market have enjoyed wide acceptance due to their price moves. One such token is Stellar Lumens, which has also witnessed massive success since its inception. As far back as 2017, the token’s value grew exponentially high, putting itself against Bitcoin. Although it has nothing on Bitcoin, traders hoping to diversify their holdings can look to the digital asset. In this article, we will be looking into every detail you need to know about Stellar crypto and its token Lumen.
What is Stellar XLM?
Stellar developers designed the system to be open-sourced, sharing many similarities with that of Ripple. Notably, Jed McCaleb, a former founder at Ripple, floated the system. One of its core similarities with Ripple is its connection of diverse financial institutions to effect cross-border payments. With this, Stellar reduces the time and cost of making transactions internationally. It also provides a secure and safe framework for all this to work. Stellar thrives on its Consensus protocol which came to like after a fork in 2014. Stellar thrives in a developing market where it provides services ranging from making remittances to loan distribution in a financial institution, among others.
How does Stellar Crypto work?
Stellar mirrors the modus operandi of most decentralized systems in the market but with a slight twist. It houses its decentralized servers under a network using a distributed ledger technology updated every five seconds. The key difference between how Stellar and Bitcoin work is the consensus protocol. Unlike Bitcoin, Stellar does not need permission from the entire network to approve a transaction. To actualize this, it uses the ever-fast Federated Byzantine Agreement algorithm. The BFA algorithm enables the system to approve transactions through one network portion. A node needs a group of other nodes to validate transactions before they are approved in the approval process. With this, Stellar can carry out more than 1,000 transactions every second.
What are Lumens (XLM)?
Stellar is the system that enables money transactions digitally. However, it has the native currency that it thrives on, which is Lumens. Lumens are the native token on the Stellar network and are used to carry out different transactions. Stellar has a system that automatically converts money sent into the system to Lumens before being converted to any other token. For example, if a cross-border transaction happened between someone in America and Japan. Stellar will first convert the funds from the sender into Lumens before converting them to the receiver’s currency. With this system in place, Stellar has thrived as one of the top payment companies.
XLM Price Analysis
The entire crypto market is just coming off the back of a massive price retreat that has forced it on a decline. Lumens is also no exception, as the token dipped massively over the recent weeks. However, it looks like fortune is set to smile in the coming days as it is presently up by 0.34% in the last 24 hours while selling for $0.203. Presently, the token has a trading volume of $184,748,531 and ranks #30 on CoinMarketCap. Lumens also boasts a market cap of $5,052,944,553 with a current supply of 24,835,904,986 XLM tokens. As it stands, the total amount of XLM tokens that will be in circulation is 50,001,806,812 XLM.
How to Purchase XLM on Binance
Knowing about XLM and the many opportunities it holding it provides is one thing, getting it into your portfolio is another thing. Diversifying a crypto portfolio has worked for so many established traders. Now, what coin would be better to diversify with, if not Lumens? Below are the few steps you need to undertake to purchase XLM. For the sake of this tutorial, we will be focusing more on Binance. Below are the steps:
Register your account
This is the first step in a long list of required steps to purchase XLM on the Binance crypto exchange. In this step, you are required to submit every detail at the point of registration to become a member of the exchange. You will be required to enter your name, phone number, email, and other vital details where there is a need. After that, click on the register button, and you will be onboarded to the crypto exchange. However, note that the order of things may vary across different locations. If you already have a Binance account, you don’t need to register. You should follow this piece for the next steps.
Verify your account
Once you’re done submitting your details and registering your account, you will need to verify your information. This ensures that they are onboarding the owner of the information you submitted during registration. You will be required to submit documents as proof of your name, address, and country. Binance also mandates you to set up two-factor authentication settings in the face of any attempted hack or scams. Lastly, you will be open to a higher daily transaction limit for each verification completed.
Deposit funds in your account
This is the next step required after completing your verification. You will be required to send funds into your account. Binance allows traders to deposit the fiat equivalent of the time they intend to purchase. The crypto exchange supports dollars, euro, yen, among other top currencies. You can deposit through bank transfers or wire transfers, depending on location. In some locations, traders can only deposit funds using peer-to-peer methods. Also, Binance allows users to deposit other tokens such as Bitcoin and Ethereum and exchange them for other digital assets such as XLM. Notably, you must wait for your deposit to be confirmed before going ahead with the next step.
Create your order
After you have deposited your fiat equivalent of the token you want to purchase, creating your order is next. In this step, you will be required to click on the XLM token and hit the purchase button. After this, you will need to create an order of the number of tokens you want to purchase. Once the token price is within your order limit, it will automatically buy the token. Although this step looks very tedious, it is easily understandable. After this step, most people prefer to keep their XLM in non-custodial wallets. This means that they prefer to keep their tokens off the centralized exchange. With this, they would have a measure of control over their tokens.
Is Stellar Crypto worth buying?
Stellar has been known to involve small companies with potential in the financial space over the last few years. With its partnership with these firms, there has been an uptick in XLM demand in the last few years. This has propelled Stellar’s growth in the market since its inception. One of the powerful propellants of the token’s price was the firm’s partnership with TransferTo. As far back as 2018, there was an agreement between the two firms to leverage the Stellar crypto system to provide access to cross-border payments service to over 70 countries worldwide. Other partnerships include the one with IBM, which showed that the firm has so much to prove in the financial scene.
With the way the market is shaping, the financial sector could witness a massive change, and Stellar would be one of the integral elements of the change. This will also mean that the token price would also soar higher than it currently sells for. However, this does not automatically mean that Lumens will go over the top as most digital assets have technical details controlling their rise and fall. This means that buying Stellar should not be to get rich in the next one or two years. Buying Stellar should mean that traders believe in the future and are investing early. Also, one must look at the risks and challenges that the coin pose before going fully into the asset.
Conclusion
XLM has been seen as one of the most promising tokens in the digital asset market in the last few years. This is judged by the use case of the token. Although it has a rival in Ripple, it provides more to the user than Ripple does. Also, traders that intend to buy Lumens should not go full-on to purchase XLM with all the money in their accounts. It is good to diversify as it brings stability to a portfolio. This is because if a token is bleeding heavily in the market, another might be having the best moment at the same time. Finally, digital assets are volatile, so traders need to carry out a degree of research into tokens they want to purchase.
