Stellar Lumens (XLM)
So, what is Stellar Network and what are Lumens?
Stellar Lumens advertises itself as an open-sourced, distributed payments infrastructure, built on the premise that the international community needs a worldwide financial network open to anyone. Stellar aims to fill this need by connecting individuals, institutions, and payment systems through its platform.
The Stellar Network refers to the technology that processes financial transactions. The technology is open source, distributed and community owned.
Lumens are the native asset of the Stellar Network. 1 Lumen (XLM) is a unit of digital currency, like bitcoin.
Ok, it sounds great, but how are Lumens different from the other cryptocurrencies?
Simply put, the Stellar Network runs on a web of decentralised servers supported by an international consortium of individuals and entities. These servers support the distributed ledger that keeps track of the network’s data and transactions.
By using the Stellar Network, users will be able to send funds instantly, both locally and globally. Moreover, the Stellar Network combined with Lumens serves as a bridge for any given currency.
Multi-currency Transactions with Lumens
As mentioned earlier, Stellar Network allows for the exchange of different currencies on the platform. One of the most intriguing features of the Stellar Network is that if there are no trading pairs in the exchange for the two currencies being transacted, Stellar searches for offers on the network that will lead to a chain conversation into the finally desired currency. In other words, Stellar takes Currency A and converts it into Lumens (XLM). After that, the funds in the form of XLMs get swapped with the desired currency B.
Stellar Lumens are ofter compared to Ripple’s XRP. However, if Ripple was built for financial institutions and banks, then Stellar Lumens are for the private individuals. It has the potential to revamp how we process peer-to-peer transactions on a global scale.
The Stellar Network hopes on improving micro-payments systems, send remittances without currency exchange losses and banking fees.