Since the start of December 2017 Stellar Lumens – XLM – have seen their price increase by more than 900% from just $0.076 USD. This altcoin, which saw its previous rise cut short around May 2017, has a successful team behind it along with some solid technology. Nevertheless, it is hard to tell whether this Stellar Lumens rally is due to its technological prowess, or due to publicity and a general positive feeling in altcoin markets.
Speculation Behind Stellar Lumens Rally?
Speculation in altcoin markets, especially within the 2nd generation blockchain projects is a major issue. Speculation might also be partly responsible for this recent Stellar Lumens rally. nonetheless, the trigger in the markets, alongside clever technology has been similar to that of Cardano – the team. Following Ripple’s recent rise, investors who have been doing their research, would be able to find that Stellar Lumens and Ripple have a prominent team member in common, Jed McCaleb. McCaleb left Ripple in 2014 to work on XLM. According to technical overviews, the Stellar protocol is largely similar to the Ripple protocol, with a few exceptions.
How Does Stellar Work and What Does It Do?
Is a personality enough to fuel the Stellar Lumens Rally we are now seeing? It might not be, but the network’s simplicity and the way it works might have gotten the attention of investors. Stellar functions with tokens called Lumens, which are used as a transaction token to trade funds on the Stellar blockchain, in forms of currency credits. Current cross-border transaction systems such as SWIFT are costly, especially when talking about small sums. Ripple is aiming to replace that system through its work with the banking system. Stellar however is looking to do the same at a more decentralized level, becoming a P2P network that can save users plenty of cash in fees when conducting cross-border transactions.
Stellar Lumens Network
When using the Stellar network, the ledger records individual’s funds as credit – this credit can be transacted with instantly and seamlessly. The transaction can be done from one currency to another. Due to the cleverly built infrastructure, the lowest exchange rate is guaranteed, along with rapid transaction times, as opposed to 3-5 day international bank transfers with hefty fees involved. Stellar clearly addresses an issue that has been so far tough to tackle. Nevertheless, XLM still has to prove it can actually tackle this problem effectively. It seems that mass adoption, which is the first step, is on its way with this recent rally.
Push from a Heavy Weight
Recent news will also give more fuel to this recent Stellar Lumens rally. According news sources, IBM will be contributing to Stellar in the form of 8 validators globally, with a further 30 banks joining the project. Jed McCaleb himself confirmed this information. Despite the good news and the solid footing Stellar Lumens finds itself in, achieving its stated goals will take a lot more than endorsement from banks and cooperation with IBM. This cryptocurrency has a lot to prove still, so the role of speculation this recent Stellar Lumens rally cannot be overlooked.