Stellar Investment Overall Score: A
Stellar GROWTH POTENTIAL: A
Stellar SUSTAINABILITY SCORE: B+
Stellar BRAINS BEHIND CURRENCY: B+
Stellar, also known as XLM, is quickly gaining popularity in the cryptocurrency investing space. Stellar is the cryptocurrency blockchain network. XLM is the name of the token exchanges using stellar. These are also known as Lumens. Stellar is an open source, blockchain backed digital system. It allows for digital payments on a distributed infrastructure. These payments are peer to peer based and connect investors in seconds. It also costs a fraction of a penny to buy and sell.
XLM is considered a new rival to Bitcoin and has been popularized on Reddit. It is widely discussed there and has a large backing of investors.
XLM isn’t unlike a lot of top cryptocurrencies in how it leverages servers and peer to peer technology. At the core of its functionality, Stellar is a network of decentralized servers that can be run on many devices. The servers are growing with the popularity of the currency. As the network becomes larger it also gets stronger in encryption and speed.
The servers that Stellar runs power a ledger. This ledger serves as a receipt of record. It is available to the public on every server in the Stellar network. The Stellar ledger records every transaction on the system and is completely transparent to investing parties while remaining anonymous behind blockchain encryption. You can see every transaction back to the beginning of Stellar on their servers, they’re anonymous though.
Ledgers issue money as credit. This credit comes from things called Anchors which serve as the intermediary unit between two parties in a transaction. Good examples of these in every day life are banks, peer to peer loan sites, and payment processors. Anchors are relied on for the escrow process and can easily transact different currencies at the lowest possible exchange rate.
You can now easily pay in another currency without the high fees of your bank or payment processor. It’s a nice workaround to how money is transmitted now a days.
Stellar also recently added smart-contract functionality. It officially serves as an escrow provider, crowdfunded, and executer of many other vital functions.
In 2018, Stellar also added service for hardware on the Ledger Nano S. We look more at hardware wallets and where you can purchase them in an article here, but the Ledger Nano is nifty. For the first time, you can keep your Stellar completely safe with a hardware wallet.
Stellar was founded as an exchange in 2014 by Jed McCaleb and Joyce Kim. It is now primarily led by McCaleb.
Over the last few years, McCaleb and XLM have seen a slow but steady adoption. The coin traded at below a 50M market cap until May of 2017 when it saw a spike to over 300M in market cap. It went back to sleep for a while, dwindling around the 150M until a recent surge in January. It now has touched over 13BN in market cap and is one of the most exciting coins in 2018.
Even though there is a lot of excitement around Stellar, it doesn’t come without risks. The cryptocurrency has been noted to not be ready for mass adoption at time of print. This has seen its price flux in price in a bearish manner. Stellar has slipped to just over 5BN in market cap at time of print.
The Stellar network is free to use, but is it all smoke and mirrors at this point? We think Stellar is for real.
Jed McCaleb and Blockchain
Jed McCaleb is the main brain behind Stellar. His main beliefs are rooted in technology easing ailments of the human condition. He’s succeeded in using technology to bring harmony to many industries with inefficiencies.
Jed McCaleb brings a lot of hype to 2018, touting the capabilities of XLM as a currency to rival any major cryptocurrency or altcoin out there. He thinks that the entire cryptocurrency space, “will soon have to live up to its own hype. Some of the most popular technologies like Bitcoin and Ethereum, will have to sole their scalability issues.”
XLM by many accounts is scalable. It just needs time to mature and gain traction.
Much of the hype stellar gets is because of McCaleb’s brain. He’s been very smart with how he utilizes his theories in peer to peer technologies. He developed eDonkey and Overnet. eDonky is peer to peer network that McCaleb created in the year 2000. It allowed file sharing between users on a peer to peer basis. It was also decentralized. The progression to cryptocurrency was natural when McCaleb realized economics could be applied to those same file sharing principles he pioneered.
McCaleb’s history in file sharing left him open to scrutiny and lawsuits. eDonky and other peer to peer file sharing systems were one of the downfalls of the music industry in the 2000’s. They fought hard against companies like Napster. He and other minds from that era clearly persisted. Something tells me he’s not very scared of the banks either.
One of the things that looks valuable to me about McCaleb is that he doesn’t overpromise. He has been transparent about the network at scale and its lack of readiness. Such honesty has hurt the price of the crypto coin.
But that is valuable. An honest CEO leads companies in a manner that is reputable and investable. I’d like to look at the same thing for my cryptocurrency. For the first time, currencies are running as companies. What a huge epiphany that is.
As discussed, Stellar has a massive following on Reddit. Stellar is also popular enough to have earned themselves a seat speaking in March 2018’s Tel Aviv Fin-tech conference. Jed McCaleb spoke on cryptocurrency and blockchain briefly there and it only edged enthusiasm upwards. Many expect big news from the currency in the coming months or even weeks. 2018 is a put up or shut up year for one of the fastest growing cryptocurrencies.
When looked at, the current rate of Stellar looks to be cheap based on upside. IBM recently partnered with the company and many businesses are beginning to see the value of utilizing the currency in some of their processes. It’s on the uptick, but that also may be why it’s at 5BN. Many don’t know where it fits in, but it looks to be a major competitor on transaction speed. Currently it sits at 2,000 per second which equals the number of VISA.
Stellar recently assisted an entity called Mobius Network with the fundraising for their ICO. They raised $39 million legitimizing the platform and its functionality. They may not be scalable yet, but it seems they’re just about there.
A lot of Stellar hate comes from the fact that it is late to market. It didn’t have a massive jump until late in 2017. It also hasn’t proven it can successfully scale.
Some think that Stellar will receive a dilution and mass increase in available equity. Many articles have gone as far as doubting Stellar as a pump and dump scheme. I wouldn’t go that far.
Stellar Investing Conclusion
Stellar might be a stellar pick for your portfolio. What a pun!
In all honesty, if you’re looking for cryptocurrency to fill the function of transactions, Stellar has the best chance of scaling. Boasting a 2,000 TPS in optimal conditions, Stellar has the capabilities of being a VISA. To date, we haven’t seen any other currency with that type of capability. I find that this makes it extremely attractive as a buy. I also like the IBM partnership. Even though IBM is considered a dinosaur in tech, any technology based partner of merit is considered a big win for cryptocurrency.
IBM isn’t going away. I don’t think Stellar is either.
To buy Stellar, one must convert fiat currency (USD, EUR, etc.) to Bitcoin, Ethereum, Litecoin, or Bitcoin cash. Do that on Coinbase. Then transfer your bitcoin or other cryptocurrency to Binance. There you can convert Bitcoin or the others to Stellar and many other altcoin options. We have more on that here.
Thanks for reading and happy investing!