Stellar Lumens (XLM)
What is Stellar?
Similar to the Ripple Protocol and XRP, there is the Stellar Network, and there is the native coin to the Stellar Network called the Lumens (XLM, previously STR). Unlike XRP, people like to point out that XLM was created by a non-profit organization called the Stellar Development Foundation.
Stellar uses a different consensus method. Ripple requires an 80% confirmation threshold in its nodes to reach consensus. The Stellar protocol does not set a clear confirmation threshold. The nodes in the network can choose whom they trust. If you want to learn about Stellar’s consensus mechanism check out their three guides for beginners, intermediates , and experts.
Anybody can run an XLM validator node whereas Ripple has a selection process.
XLM has a built-in, fixed, nominal inflation mechanism. New Lumens are added to the network at the rate of 1% each year. Transaction fees are distributed through the currency’s inflation. On the other hand, XRP burns its transaction fees and does not recycle them back into its network.
Some people think that Stellar will become a big ICO platform because of its built in exchange mechanism and its partnership with IBM. IBM is creating what is called “FairX” which will help cross-asset payments and conversions. Compared to an ICO platform like Ethereum, XLM has less fees, works quicker, and can be exchanged without a third party exchange, but does not have the coding power of smart contracts built in.
Biggest concern with XLM:
Its most common criticism is that its money supply is controlled by the Stellar Organization. There are about 103 billion total Lumens at the time of writing this article but there is a circulating supply of only ~18.5 billion. That means about 80% of the supply has already been minted but is not publicly available. Even though its organization probably has good intentions, some people will question Lumen’s decentralization and who gets to control its money supply.
Blockwolf is excited about the potential for Stellar’s FairX exchange but its coin’s supply really concerns us. We think Stellar will provide some innovation to the cryptocurrency industry but we do not think it will become a good coin for retail adoption because so much of its supply is locked up. We like its changes from Ripple’s original code but we think it is more likely that a different cryptocurrency that is equally as scalable will emerge to supplant Ripple’s place as a top 10 cryptocurrency. If you want to view some other coin reports, please visit our reports for some other coins as well as our Blockwolf Picks.