Stellar is an open sourced, hybrid blockchain network for the facilitation of value exchange including but not limited to cross-border payments. The blockchain’s technology and protocol can be compared to “Ripple”, as they are both meant to facilitate payments or the value of exchange. In fact, Stellar was founded in 2014 by Jed McCaleb, who was the co-founder of Ripple, but further left the project due to philosophical differences.
While Stellar is not a currency but rather a payment network, the Stellar network does utilize their own cryptocurrency called “Stellar Lumens”. The Stellar Lumens play a vital role for the payment network to operate. They facilitate the transactions of payments by representing the equivalent value of the payment. The Stellar network has a fixed supply of 100 billion Lumens which have already been created and are slowly distributed with an increase of 1% annually. Stellar Lumens are transacted very quickly, usually being sent and settled within 6 seconds.
Stellar may seem very similar to the Ripple cryptocurrency, but they are very different. For instance, not only is Stellar used to facilitate transactions like Ripple, the Stellar network can also be used as a decentralized exchange. The Stellar network will be connected to various institutions which are called “anchors” in which the Stellar Lumens can be used to trade anything they hold, as well as other cryptocurrencies. Another outstanding feature is that Stellar offers the ability to create cryptocurrency tokens and ICOs, just as Ethereum does. With all these impressive features and capabilities, investors and cryptocurrency traders all around the world are starting to realize Stellar’s potential.
The current live price of XLM/USD:
How to Trade Stellar
While Stellar has gained tremendous popularity in recent months, the cryptocurrency is still significantly more difficult to obtain than Bitcoin or Ethereum. While those two cryptocurrencies can easily be obtained through fiat money with credit cards and bank accounts. Stellar Lumens is largely bought and sold with other cryptocurrencies. There are some exchanges where fiat currency is accepted for the exchange of Stellar Lumens, but these exchanges are rare and have low volume. If a cryptocurrency trader wants to buy Stellar Lumens, they are best off to buy either Bitcoin or Ethereum first, then exchange it for Stellar Lumens on one of the various exchanges that sell it.
CFD Trading with Stellar
Another option that may be more attractive for some traders is to speculate on the price of Stellar Lumens through CFD trading (Contract for Difference). This method of trading can be very lucrative and offers a great deal of leverage resulting in larger profits or losses. CFD Trading of Stellar Lumens is done by putting down a certain amount of money rather than buying the cryptocurrency. A trader then speculates on which direction the price will move and by how much. Trading this way takes away the risk and complications of holding cryptocurrencies like Stellar Lumens, and therefore is becoming very popular in the cryptocurrency space.