Stellar (XLM): Bridging Borders and Revolutionizing Finance

Stellar, created in 2014 by Jed McCaleb and Joyce Kim, is an open-source blockchain platform designed to enable fast, low-cost cross-border transactions.

Stellar (XLM): Bridging Borders and Revolutionizing Finance
Photo by Felix Rottmann / Unsplash

What is Stellar (XLM)?

Stellar, created in 2014 by Jed McCaleb and Joyce Kim, is an open-source blockchain platform designed to enable fast, low-cost cross-border transactions. The native cryptocurrency of the Stellar network is Lumens (XLM). Unlike many other cryptocurrencies, Stellar was not conceived primarily as a store of value or a speculative asset. Instead, it focuses on facilitating secure and efficient peer-to-peer transactions and bridging the gap between traditional financial systems and the world of blockchain.


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How does Stellar (XLM) work?

Stellar operates through a decentralized network of servers referred to as nodes, which serve the purpose of validating transactions and upholding the blockchain. These nodes are operated by individuals and entities worldwide.

To initiate a money transfer within the Stellar network, it is necessary to establish a Stellar account. This can be achieved by either using a Stellar wallet or registering an account on a Stellar exchange platform. After obtaining an account, you can deposit funds into it using various methods, including fiat currencies, cryptocurrencies, and other assets native to Stellar.

To transfer funds to another individual, you must possess their Stellar address. Subsequently, you can generate a transaction, specifying the amount to be sent and the recipient's Stellar address. This transaction is then transmitted to the Stellar network for validation.

The Stellar network employs a consensus mechanism known as the Federated Byzantine Agreement (FBA) to validate transactions. FBA enables the network to swiftly and efficiently reach consensus on the status of the ledger, even when some network nodes are inaccessible or acting maliciously.

Once a transaction has been validated, it is incorporated into the Stellar blockchain, which serves as a publicly accessible ledger documenting all network transactions.

The Historical Evolution of XLM

Stellar, established in 2014 by Jed McCaleb, one of the original founders of Ripple, was initiated due to disagreements about Ripple's direction, prompting McCaleb to leave in 2013.

Initially, Stellar was introduced as RipplePay, a payment system. Nevertheless, RipplePay failed to gain widespread adoption, leading the company to shift its focus toward developing the Stellar Consensus Protocol (SCP).

SCP serves as a decentralized consensus mechanism, enabling the rapid and efficient validation of transactions within the Stellar network. Importantly, it stands out for its energy efficiency compared to the energy-intensive proof-of-work consensus mechanism utilized by Bitcoin and other cryptocurrencies.

In 2015, the Stellar network was officially launched, while the Lumen (XLM) cryptocurrency made its debut on cryptocurrency exchanges in 2016.

Stellar quickly garnered popularity, propelling XLM into the ranks of the most widely recognized cryptocurrencies by market capitalization. In 2018, XLM achieved an all-time high price of $0.87.

However, the cryptocurrency market experienced a significant crash in 2018, causing a substantial drop in XLM's value. Although it has since made a partial recovery, its price remains significantly below its peak.

Notable Milestones in Stellar's History:

  • 2014: Jed McCaleb founds Stellar.
  • 2015: The Stellar network is officially launched.
  • 2016: The Lumen (XLM) cryptocurrency is introduced on cryptocurrency exchanges.
  • 2017: Stellar collaborates with IBM to develop a blockchain-based cross-border payment solution.
  • 2018: XLM reaches an all-time high of $0.87.
  • 2019: Stellar conducts a significant XLM token burn, reducing the circulating supply by half.
  • 2020: Stellar introduces its decentralized exchange, Stellar DEX.
  • 2023: Stellar retains its status as one of the most prominent cryptocurrencies by market capitalization.

Current Status of Stellar:

At present, Stellar ranks among the top cryptocurrencies in terms of market capitalization. It is actively employed by numerous financial institutions and enterprises worldwide.

Furthermore, Stellar serves as the foundation for various groundbreaking blockchain-based applications, including micropayment networks and decentralized exchanges.

Key Adoptions of XLM

Stellar (XLM) has garnered significant support from prominent financial institutions and enterprises worldwide, including:

  • IBM: Collaborating with Stellar to create a blockchain-based payment solution for global cross-border transactions, which various banks and financial institutions are now implementing.
  • MoneyGram: A money transfer service enabling XLM transactions, with a vast network of over 350,000 agent locations spanning across more than 200 countries and territories.
  • Coinbase: A leading cryptocurrency exchange facilitating XLM's buying, selling, and trading, boasting over 100 million users and global prominence.
  • Uphold: A cryptocurrency exchange and digital wallet supporting XLM's buying, selling, and trading, along with international XLM transfers to over 180 countries.

Beyond these prominent partnerships, XLM finds utility in numerous smaller businesses and startups. It fuels microtransaction networks, streamlines cross-border remittances, and bolsters liquidity for decentralized exchanges, among other applications.


As Stellar continues to evolve, its potential impact on the financial sector becomes increasingly evident. With a focus on accessibility, affordability, and speed, Stellar has the potential to revolutionize cross-border payments, empower the financially underserved, and drive innovation in the blockchain space. However, like all cryptocurrencies, it faces regulatory and market challenges that will shape its future trajectory.

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  • The official website of the Stellar Development Foundation, the organization behind the Stellar network. It provides information about the technology, use cases, partnerships, and news related to XLM.
  • Stellar Community: The official community forum for Stellar, where you can engage with developers, enthusiasts, and experts to discuss all things related to XLM and the Stellar ecosystem.
    Forum: Stellar Community
  • GitHub - Stellar: The official GitHub repository of Stellar, where you can access the open-source code, development updates, and technical documentation.
    GitHub Repository: Stellar GitHub
  • Twitter - Stellar: Follow the official Stellar Twitter account and stay updated on news, announcements, and community discussions.
    Twitter: @StellarOrg
  • LinkedIn - Stellar Development Foundation: Connect with the Stellar Development Foundation on LinkedIn to access professional updates and insights.
    LinkedIn: Stellar Development Foundation