That scarcity alone should drive up the value over time, particularly since the demand for Stellar’s platform is likely to increase. ![]() The currency already exists and according to the company there are now only about 50 billion lumens in existence and no more will be created. The Lumen is not a proof-of-work coin like Bitcoin (i.e., it’s not mined). With Stellar Lumens, the coin is interesting, but by many accounts, it will have an ultimate value. ![]() I concluded my article with Ripple feeling that the company excited me more than the coin. As of this writing, 1 lumen is just over 31 cents. In the last month, investors have gotten a taste of the Lumen’s volatility. When Bitcoin drops, as it’s prone to do, investors can expect the price of a Lumen to drop. A positive number indicates that the two currencies will move in the same direction, although not necessarily at the same rate. The correlation coefficient ranges between 1 to -1. According to website Coin Predictor, the correlation coefficient of the two cryptos is 0.55. Lumen Has Strong Bitcoin Correlationĭespite not being a PoW coin, XLM has a strong price correlation to Bitcoin. Instead of using miners to validate the transaction, the consensus method uses a series of servers that sync with each other for verification. Instead of using miners, transactions are settled within 2-5 seconds through a method known as consensus. Stellar is not a proof of work (PoW) coin like Bitcoin. That is, they are trying to make it easier for people to use the speed and security of digital tokens to facilitate the movement of hard assets, including fiat currency across borders. The Top 7 Hot Stocks to Buy for 2021’s Biggest Trendsīut in many ways, the two companies serve the same purpose. One of the largest differences is that Ripple caters more to banking institutions and Stellar targets the unbanked. The two companies act as peer-to-peer lenders for moving money across borders. The argument for buying XLM is similar to the case for Ripple. And this is where I take this analogy into the cryptocurrency world.Ĭurrently Stellar and Ripple are the two main players in this space. This is particularly true for the unbanked. As our society becomes ever more cashless, these companies become ever more essential. The primary benefit of financial technology (fintech) companies such as PayPal (NASDAQ: PYPL) is that they allow individuals to move money easily - and in real time - to other individuals. At the time of this writing, XLM is the 10th largest cryptocurrency by market capitalization, at $7.1 billion, according to. This is partially to cover the small fee that is charged on every transaction. ![]() And the company requires that every account hold a modest number of Lumens at all times. Currently the company has approximately 4.3 million accounts. It is is a not-for-profit company that is designed to be a universal open-source system for digital money. Before I get too far ahead of myself, I realize some of you may be unfamiliar with Stellar Lumens.
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