Stellar is one of them. It is the 8th largest cryptocurrency having a market cap of $11 billion and hence, became a hot topic among investors. This article will explain all the basic facts about Stellar.
Stellar is another cryptocurrency such as bitcoin, litecoin, Ethereum, etc. It was created to facilitate financial payments across borders. The unit of Stellar is Lumen and denoted by XLM coin.
XLM cryptocurrency is an open-source decentralized platform. Stellar is created as a financial payment platform and using lumens, one can transfer money across borders easily with a very small transaction fee. This process is quick and reliable.
Stellar was developed in 2014 by Jed McCaleb, who was also the co-founder of Ripple cryptocurrency. Jed had differences in functional approach from the other founders and he then planned to launch Stellar as another cryptocurrency.
Stellar is aimed at facilitating financial transactions among users whereas Ripple was mostly focused on providing banking solutions.
When the whole network of stellar was started, 100 billion lumens were created by the team. Stellar is managed by the Stellar Development Foundation (SDF). It is a non-profit organization based in Delaware. Stellar has announced a list of partners such as IBM, etc which will be using Stellar in all their cross-border financial transactions.
One can make a transaction using lumens and transaction fees cost only .0001 XLM. This is a very small amount of fee charged which makes Stellar different from other cryptocurrencies. Also, a lumen transaction gets settled in as fast as 6 seconds only.
Another concept in Stellar is anchor partnerships. Anchors are entities that provide a line of credit to the people who are willing to use the Stellar network.
For example, if you want to send money to any of your friends in the US. You can transfer the equivalent amount in Indian rupees to any of the anchors in India. The anchors then transfer the amount in the lumen to those based in the US which in turn will transfer dollars to your friend in the US.
This will result in fast transactions and it will cost less than a penny.
The price movement for Stellar has been very volatile which makes it a very risky investment. Stellar has made it to the top 10 cryptocurrencies in the first few days of 2018.
It has become the 8th largest cryptocurrency in terms of market cap.
The performance graph of stellar has shown an upward trend. But investors should be aware that the top 10 cryptocurrencies list is changing rapidly due to this cryptocurrency revolution.
The XLM price in INR is Rs. 47.18
|% Change (in last 1 year)||1398.08%|
Seeing the upward trend and the future technology, one can plan to invest in stellar coins but it depends on the risk appetite of an investor.
Investors and users should be aware that there is a lot of risk in this digital currency as the prices can fluctuate at a very rapid level and they can easily lose out on the complete value of their investment.
The legal status of cryptocurrencies varies from country to country and is still undefined. Most of the instances have occurred when online crypto-cash has been targeted by hackers.
However, considering the volatile values of Stellar and the cryptocurrency market in its infancy, it can turn around into a very risky investment. Also, it is not a legal tender in India.
Most regulators across the world have warned investors dangers and risks associated with cryptocurrencies. They are unregulated, and liquid, and are more prone to price fluctuations at a rapid level.
Transactions settle or not are very probabilistic and cannot be reported to the regulators hence, manipulation can occur in the market. Higher prices indicate it is a lucrative market for hackers who are constantly trying to attack investors.
Investors who are directly involved in exchange transactions i.e. using their own account are frequently targeted and prone to lose their capital.
If you want to channel your hard-earned money and accumulate wealth with minimized risk, mutual funds can be considered a safe investment.
Mutual funds are an indirect way of investing your money. If investors do not have time and expertise to invest in markets, mutual funds are ideal for your investment. They are managed by professional fund managers who have years of experience in capital markets and investments.
If you are interested in high-risk investments, you can look at small-cap funds.
The cryptocurrencies market appears to be fascinating to investors in terms of returns but it is at its peak according to economists. It can be a bubble that can burst at any moment, hence investors are advised to select the right investment products for their capital such as mutual funds, etc.
Also, the Finance Ministry of India has recently announced that virtual currencies are not the legal tender in India. It is a clear and precise statement from the ministry to protect the citizens from the hazards of hacking.
According to the Finance ministry – “Consumers need to be alert and extremely cautious so as to avoid getting trapped in such Ponzi schemes,”. Virtual currencies are stored in electronic form and are more vulnerable to cyber-attacks and can result in loss of money. It is advisable to invest your hard-earned money in the right direction.
Disclaimer: The views expressed here are those of the author. Mutual funds are subject to market risks. Please read the offer document before investing.