Stellar Lumens (XLM) Review. The Future of Banking?

The world has become a smaller place since the appearance of the internet. It has made communications and connections between different countries something more accessible than it was a few years ago

Because of these new connections, there are more business options, like e-commerce and cryptocurrency; the latter is an online form of money that has unified the different currencies in all the countries.

This new concept brings the need of bank programs that accept and change the cryptocurrency into the local currency of each country. Therefore, the Stellar project appears.

In short, based on Stellar’s large and growing community, brand sentiment, the quality of their team, roadmap projections, and staking opportunities, we rank Stellar in our Highly Likely To Succeed category.

What is Stellar?

Stellar intends to create a global styled bank system to connect the economy between countries using the blockchain and their cryptocurrency named Lumens (XLM). No matter the time differences, currencies, or currency valuations, the system strives to provide low-rate commissions for doing these transactions.

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What is Stellar Used For

Stellar uses their digital currency, Lumens (XLM) to complete the exchange of value in local currencies around the world. In comparison to other altcoins, they don’t have to be mined, but they are generated weekly and distributed through direct voting and royalties.

With this method, they give everyone the tools to make transactions overseas. It includes buying and selling merchandise between countries with different currencies or transferring money to another country; users can then change it into their local currency.

For people that moved to a different country to work and live, they can use Stellar to send money to their families without the substantial commissions that most banks that operate with different currency have.

Also, with the rise of e-commerce around the world, people can purchase products from other countries, and they need not worry over a limited number of transactions per minute and the long process of money change.

The transactions occur in real-time and in a few seconds. This feature is an improvement in comparison to other online banks that may take hours or even days to approve the purchase.

Stellar is a validated financial service, accepted by many companies and other banks. To have an account in Stellar is to be recognized as a legal entity to make validated transactions around the globe.

The Stellar Team

The Stellar Development Foundation (SDF) is a non-profit organization. It was created at the end of 2014 by Jed McCaleb, Joyce Kim, and Matt Mullenweg. Jed is also known for working as a programmer in the Ripple project, another cryptocurrency system.

The programmers that developed the Stellar project have worked in other cryptocurrency projects. They applied this knowledge, to create a service that’s easy to work with and focus on the needs of the people around the world.

There are also investors such as Patrick Collison (CEO and co-founder of Stripe), Sam Altman (president of Y Combination), and Naval Ravikant (founder of AngelList).

The members of the Stellar development team are professionals related to the cryptocurrency and Blockchain field, so people can be sure that they know their work. Because it is a non-profit enterprise, they save 5% of Lumens as a backup and accept donations.

How Stellar Works

Stellar works with a net of multiple servers independent from each other. They are not associated with any financial entity or cryptocurrency different than their own (Lumens) and don’t work with a mining system.

It organizes a list of transactions in blocks. It creates a transaction log that’s very similar to the usual method used by the banks. They are synchronized and validated by a consensus system called the “Stellar Consensus Protocol” (SCP).

The money goes through an “anchor”; this is a bridge between the coin and the Stellar system. Once the transaction is validated, it goes through a “pool,” where it transforms from one currency to Lumens, and vice-versa.


– Low Commissions: In comparison to other bank commission rates, Stellar charges no more than 0.001$ for each transaction.

– Decentralization: Stellar works as a decentralized economic system. There is not a primary currency but a multi-currency exchange, so the transactions between different countries currencies are fast and in real-time.

– IBM Association: The Stellar project is associated with IBM, who has been its partner since October 2017. These and other partnerships have validated the confidence that this project gives to their users even more: whether it’s a personal or a company account.


– Comparison to Ripple: Because Ripple came first—and one of the programmers was the developer of the Stellar project—many have difficulties when separating both systems. Some people consider Stellar as a non-legalised fork from Ripple.

We believe this is mainly due to the active community surrounding Ripple and shouldn’t be tied to the opportunities surrounding the Stellar project. These assumptions are offset by the number of companies that create Stellar accounts.

– Multiple Competitors: In the cryptocurrency space, many other projects offer similar options to the Stellar project; the competition can be diverse and make it difficult to know if you’re making the right choice.

Final Thoughts on Stellar

Cryptocurrencies are expanding daily; they’re becoming a new way to save and transfer money internationally. People may find many options in the market that facilitates how to make transactions through other countries. Each option offers its own commissions’ rates and operations speed, so users enjoy variety in terms of possibilities.

Stellar is one of the top cryptocurrency systems in this era, increasing its clients remarkably in 2018 and making partnerships with major companies. They have many competitors in the market, but with time, they have proven to be one of the more reliables today. The speed of the transactions and the low rate of their commissions are attractive to companies and individual investors.

Before you decide to make a final decision, it is always recommended that you do more of your own research to see if Stellar is a project you want to start investing in.