Cryptocurrencies were big news and made enormous gains almost across the board last year led by the incredible performance of Bitcoin. And it looks like the remarkable story will continue into 2018 with Bitcoin investors remaining bullish and a strong outlook predicted for Ripple and ZCash.
And speaking of Ripple, a newer kid is on the block, partly written by one of the initial lead developers of Ripple, and it is a currency we believe will be big in 2018.
STELLAR is one of a large number of cryptocurrencies that have sprung up in the wake of Bitcoin's roaring success. Allow us to guide you through it with these answers to some of the most commonly asked questions.
What is Stellar and what are Lumens?
Stellar is an online cryptocurrency system that uses Lumens (shorthand XLM) as its unit of value. In more technical speak, it is a "distributed, hybrid blockchain" with its team describing it as "infrastructure that exists to facilitate cross-asset transfers of value, including payments". Each Lumen is one unit of the currency.
Similar to Bitcoin, it can work as a decentralized currency whose value is not based on anything tangible - just the value that investors place on it.
Where do I get Lumens?
Lumens can be purchased on several known markets and exchanges. One of the best and most well know of these is Binance. Readers should be aware that there is a risk in investing in digital currency as the prices can both fluctuate drastically and lose value completely. They are also not insured by regulators.
What is the value of a Lumen?
The trading price of a Lumen can be measured on several cryptocurrency monitors.
As of January 14, 2018, a single Lumen is worth £0.44 ($0.61). It was worth £0.63 ($0.85) just a week earlier.
What risks are involved with investing in cryptocurrencies?
The legal status of cryptocurrencies varies substantially from country to country and is still largely undefined or changing in many of them. Readers thinking of investing in Bitcoin or another cryptocurrency should be very careful. Their values are volatile, with the ability to rapidly rise and plummet.
Investors can also be targeted by hackers and other criminals who seek to steal their crypto-cash online.
Ripple or Stellar?
There are many cryptocurrencies to choose from out there ranging from the ultra-popular Bitcoin and Ethereum to lesser known players. Many of them will likely fade into obscurity once a handful of players become firmly established (think of the first auctioning Websites and social networking platforms etc.). It is important right now to therefore try and work out which ones will survive and become the big players of the future. This will depend partly on the problems the currencies solve. For us Ripple and Stellar stand out. Why? Because one of the world’s most powerful banks and one of the world's most powerful companies have their backs and they are used to solve a range of micro-transaction problems.
The market for cross-border payments and intermediary currency functionality is huge and it is rife with problems to be solved. If someone is looking to trade U.S. dollars for Yuan, either network could facilitate the conversion by matching relevant offers and using Ripple or Lumens to quickly execute the trade. At present it can take hours or even days.
The main difference is Stellar puts more of a focus on simplicity and scalability as well as on functionality to help move money in remote areas at lower costs. This might just help to give it the edge over the long term.
It’s perhaps worth remembering that Stellar is a nonprofit organisation aimed at creating a more inclusive world economy for everyone. An extremely high price for Lumens might undermine that goal, prevent people from listing their XLM on the ledger to facilitate exchanges and drive up the average cost of transfers, so there’s a real incentive to keep prices in check. It’s safe to say XLM prices won’t ever skyrocket in value the way bitcoin has.
However, Stellar has formed partnerships with companies like IBM and aims to offer low cost, easy money transfers. It looks like many organisations are aiming to use Stellar for their money transfer needs and wider use is likely to see prices climb over time.
Buying Lumens also gives users the means to interact with a range of fiat currencies. Forex enthusiasts, frequent travellers or anyone else who can benefit from cheap, quick and easy access to a variety of fiat currencies might get their money’s worth from buying Lumens.
Expect to see Ripple cross $3 a share in 2018 with Lumens potentially tripling.