Stellar Lumens (XLM) are an open-sourced distribution infrastructure for payments. They're built with the objective of meeting the needs of a community on an international level. It's a worldwide network that is open to all people. And not only that, but the network has another goal of connecting different individuals and institutions through various payment systems.
By doing this, Stellar Lumen's Team is attempting to make cheaper financial transactions possible, faster and more credible than ever before. Their goal is to change things about how the current system is working. Their protocol connects people from all over the world by allowing them a more efficient cross-border for all types of payments.
What Makes Stellar Lumens (XLM) Unique Vs. Bitcoin and Other Cryptocurrencies?
There are several reasons that Stellar Lumens is considered unique versus many of the other larger cryptocurrencies. There are also several similarities they share with other coins. For one, they operate via blockchain technology. The technology is the bread and butter for the entire cryptocurrency-based industry. Another critical factor to mention is they use a decentralized network - one of the power words that is driving the industry.
The network operates on a massive spider web of different decentralized servers that support an international group of businesses and individual investors. The servers are designed to maintain the giant ring of their uniquely distributed ledger that keeps track of their international transactions and other forms of data.
In theory, the protocol used by Stellar will function similar to other financial institutions like PayPal. Using Stellar is just like any other crypto-platform. You need to upload your funds to the platform so they can be used on the network, similar to a bank or PayPal. Once your funds are uploaded, they hold in place, and your money is issued back as a credit in your digital wallet.
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Many people wonder why you would need to exchange your debit for holding your place. The money serves as an anchor that bridges your currency to the network. And the swapping of fiat converts your cash to Stellar’s public ledger.
The integration works well; it allows you to send funds instantly without the need of waiting for a bank transfer. Not only that, but it also keeps cross-border payment streamlined. If you want to send money to a relative in Europe for example, you would put your USD into your wallet and be credited with funds that you could then send via the network. They would automatically convert your USD to EUR at the lowest possible exchange rate available. Your friend or families account would later be credited with the money. Once the funds are transferred, you could then withdraw them from the anchor that supports EUR.
There's more than that though. The network also offers you the ability to place exchange orders on the public ledger, so you can sell other currencies or buy them if you want. The rates are all determined before any transactions by the person who is placing the order. They will never be subjected to automatic exchange rates like those applied by Stellar to personal money transfers.
To trade GBRs for USD, you would place an order in the book. The order would then be sent to the worldwide marketplace where you could see how your order stood against other similar requests. The exchange isn't only limited to fiat, however. Cryptocurrency is also a viable trading pair as well.
Another note as mentioned before, Stellar lets you freely send money across borders. It does so with no hassle whatsoever and without any formal banking procedures or currency exchange rates affecting it. The reason it can do this is it does three distinct things.
First, they convert the funds with an offer from before, that was in its order books. It will automatically take care of the exchange.
They also use Lumens, their token for the exchange. It's converted from currency to a token and then back to the second currency on the pair.
Lastly, there are no trading pairs for two currencies in the exchange. Stellar searches for offers that are only on their network. They then find the proposal that will lead to the conversion of the currency desired. Stellar is a very innovative platform that is ideal for travelers, people in business and their families back home.