Thank you for reading, I am Dukefish, an EOS advocate and this is a standalone article reviewing the blockchain Stellar Lumens and an entry to the latest announced Trybe competition. Though as always, this article is not investment advice just a special report to provide information and an overall review of the Stellar Lumens blockchain. The greatest knowledge I can pass on to you is, make sure that you Do Your Own Research!
Stellar Lumens (XLM) is the number #6 cryptocurrency in terms of market cap and is chasing at EOS’s heels for the number #5 spot by just a few hundred million. Stellar is a blockchain network aiming to becoming the main platform for quick and easy transactions between the banking sector, existing payments systems (VISA, MasterCard etc). As well as ease of access for your average Joe . It claims it will be able to “Integrate to move money quickly, reliably, and at almost no cost.”
Though known as the Stellar Lumens, this name is a mash up of the two core components of the network. The network is referred to as the Stellar network and the native token is referred to as a Lumen. The XLM is the three letter code for the Network, in the same way that Bitcoin (BTC), Ethereum (ETH) or US Dollar (USD), British Pound (GBP) all have an abbreviation. When you will see XLM listed on exchanges and referenced in numerous articles, news outlets media etc you know that it is Stellar Lumen.
The network was launched in 2014 as a fork of Ripple but the Stellar team reworked and edited the code to create a brand new product, 100 Billion XLM were issued and since launch there has been a fixed inflation policy at the rate of 1% each year. The network also collects a base fee for each operation performed in a transaction and is automatically added to an inflation pool. The community is able to vote and influence where this pool funds are spent, which is a great feature for their network.
Distribution of Tokens
For those savvy investor who wanted to be part of the Stellar network and grab a claim of those 100 billion tokens the company allocated their resources in the following ways shown below.
- 50% via a direct sign up
- 25% through a partnership program
- 20% airdropped to BTC and XRP holders
- 5% for operational costs by founders
The initial bitcoin distribution of Stellar was that 20% of the initial coins where given away for free to all holders of BTC and XRP. 19% was assigned to those holding for bitcoin and 1% went to XRP holders. The Bitcoin airdrop was completed in two phases the first in October 2016 and the second was completed in August 2017, so I am afraid we have missed out by now and there are no plans for anymore airdrops.
Micropayments & Cross Border Payments
Not everyone has huge stacks of fiat or crypto, making a small payment can be costly on other networks. Current banking and financial institutions will have charges for moving money regardless of volume. If you want to move money on ETH for example you have to pay Gas fees and these can vary with usage and current traffic. In order to encourage your average user keeping the cost of a transaction to a minimum is key. This is one thing XLM plans to do with current transactions costs being 0.00001 XLM. This incredible low cost is practically nothing and as a user you would not even notice the transaction fee.
The stellar network has partnered with Deloitte a group of companies targeting the banking industry to provide low costs, cross border payments. At present numerous banking companies face barriers and time delays when interacting with one another, the Deloitte product aims to reduce this and make themselves a global leader in offering this service.
A great analogy of this was from Jed McCaleb (co-founder of Stellar) “Just like you are able to send an email from a Google domain to a Yahoo domain, we are aiming to do the same with payments” removing these barriers and delays will help profit all parties involved.
The Deloitte group has several prototype products, a video of their app is available here, but note this is from 2016.
XLM has also partnered with Tempo an EU based company offering a stable coin EURT, paired with the Euro (EURO). Tempo boasts a network of 190,000 locations across 120 countries it is not just solely for customers in the EU. Tempo has evolved to allow cross-border payments for customers to make payments for day to day services such as home utilities (water, electricity), phone and mobile payments and even for health insurance.
Tempo also has the facility to turn cold hard fiat into XLM and use its service. Most notable there is a store near the train transport hub the Gare de Nord Station in Paris. (pictured right). France is leading the way with crypto adoption as it has the facility to purchase bitcoin and other cryptocurrencies in French Tobacco Shops starting this month.
To see Tempo having a designated physical place to turn fiat into crypto is surely a positive move towards wider adoption. Tempo also has over 300 authorized agent locations all throughout Europe so it is easier than ever to get involved if you want a face to face service.
A barrier for those not well versed with this space, the element of trust and security is a genuine concern. Tempo however has obtained an officially recognized EU PSD license from the ACP arm of the Banque de France. Which means it conforms to regular audits, and has fiat backed funds for all EURT purchases and transactions. It is also an accredited member of the International Association of Money Transfer Networks.
Africa has become a real hub and growth for the cryptospace and XLM has been working with the Parkway Project to provide a mobile money solution for numerous companies to allow users to move money between rival companies. Parkway is a leading company in developing financial technology and solutions for over 3,000 clients across the continent of Africa. These include some of Africa’s biggest banks, Ecobank, Wema Bank, and Diamond Bank.
In the western world we take a lot of integrated technology for granted and Parkway has been able to offer services online and products that previously were not present in Africa. With many countries with varying rules and regulations differences between them, Parkway has been able to create corporate banking solutions that enable there companies to overcome these constraints of existing legacy systems and overcome financial regulatory & integration challenges for Africa.
Their end-to-end financial solutions products are able to be used across 30 countries on the continent and have applications across numerous sectors such as healthcare, education, and energy.
Parkway is also the first IT Company in Nigeria to attain recognized quality management system certification as well as being licensed by the Central Bank of Nigeria as payment service provider and mobile money operator. This legitimacy is always a good step forward to encouraging usage and providing security to the ecosystem.
Social Projects, Charity and NGO’s
XLM is also being used not just for money services but is helping to incorporate itself into charitable and NGO projects throughout the world. The three main projects sited on the stellar site are Praekelt Foundation, Bext360 and Philafy, each planning on utilizing the Stellar network blockchain to underpin their growth and development.
Bext360’s has a noble mission statement wit the goal of using blockchain technology to improve the upstream supply chains of commodities specifically focusing on providing comprehensive and measurable accountability for critical supply chains. Using the open and transparent nature of blockchain the supply chain can be followed from source to the end user in developing nations.
Bext360 plans to use this software for physical assets such as coffee, seafood, timber, minerals, cotton and palm oil. It’s first project is that of coffee, which it instantly represents a fungible token and subsequently stored in the blockchain to facilitate payments, yield smart contracts and track assets through the supply chain from origin to consumer.
Bext360’s operates using a Software-as-a-Service (SaaS) platform, which allows all stakeholders using the supply chain to view and analyze traceable data at each step. Unique APIs allow any of the products stages to integrate the technology into their own supply lines whether you are the original producer or one of the key importers/exporters, this system of streamlining is beneficial to all. The SaaS platform also provides access to management tools, websites, marketing and point-of-sale systems helping a business to grow and reach a broader market.
Bext360’s is trying to be a positive force using blockchain and wants to help impact lives of smaller communities and be a significant disruptor to existing global supply chains. I think this is a fantastic project and running on XLM is a great move for this project.
This project is still in it’s development stages and early access can be requested through a sign up on there website. It appears to be that this project is going to be running on the Stellar network and is trying to be a ‘positive’ social network. Where people can post articles and contribute money to causes, its slogan “Likes don’t save lives, money does” I think is quite poignant.
There is an interview with the founder, Jason Dominique, in which he outlines the projects intentions and the direction the project is going. The key element of its uniqueness is the concept of a ‘give’ button in which users can simply one click and donate a predetermined value to a project. In the interview they discuss competition with Facebook and Twitter but personally I feel this project is a rival to the EOS dApp “Karma” which has a similar idea, in tokenising charitable and social good deeds.
These social positive apps/platforms are a very noble idea and hosting them on blockchain helps to make them immutable and transparent. This will help with eliminating corruption and exploiting of current existing charitable frameworks. I am sure people remember the Oxfam debarcle last year, where the faith in charity organisations was rocked.
The Praekelt Foundation is a project that is using existing mobile technology to try to tackle and solve some of the world’s largest social problems. They have their fingers in many pies and this medium post gives details of there round up of 2018. The key function of the foundation is to help provide access to essential information and vital services that are able improve the health and well being of more than 100 million people across 65 countries.
The foundation has partnered with many other companies not just Stellar Lumen in offering services, notable there is a scheme that the foundation has aligned with Whatsapp to provide healthcare related to maternal needs for woman in South Africa. As this project is related in some aspects to XLM, I am going to encourage you to explore the links provided if you wish to learn more about this noble project.
Recent News & Updates
Stellar Lumens has a lot of potential to be a real disruptor in the financial world, the most noticeable attention was that in OCT of 2018 when the company announced it’s partnership with IBM in providing cross border payments in the South Pacific, a project called ‘Blockchain World Wire’.
This system uses a ‘World Wire API’ that is able to plugged into banks’ existing systems. Then fiat is quickly exchanged into a digital asset at bank A. It is then transmitted to bank B, where it is converted back into a fiat. As with all blockchains this means that all the transactions details are recorded onto an immutable blockchain.
It seems that World Wire is just a re-branded version of what Stellar already is, but marketed with IBM branding to encourage usage and on boarding of clients. This project is a major competitor of Ripple as both projects vie to become the blockchain for the banking industry replacing the antique SWIFT system presently in use.
Interstellar & Starlight
Interstellar is a partnership between Stellar Lumens and Chain, well Chain was bought out in Sept 2018 and absorbed into this new project Interstellar. Chain originally already boasted a lot of important partners such as NASDAQ, Citigroup or Visa. The now existing project is a XLM based exchange, allowing for ease of access and liquidity between XLM and other tokens.
Starlight is an instant payments channel. It’s deployed over the Interstellar network, and it uses XLM as a mediating currency to settle payments across borders. It is essentially a private coin like system in which the transactions are only seen between those on the agreed channel. Normally, making a payment on the Stellar network (or any blockchain) involves publishing details of the payment to all observers. Paying a transaction fee and waiting for the network to reach consensus and confirm the payment. This is the basis of most if not all blockchains.
A payment channel is an agreed upon value of funds that is allocated on the network between a limited number of parties. These allocated reserves are only accessible to those who have permissions to use that channel as a mean of transactions. This means that each other user can be paid with these funds without any additional involvement from the network. Such payments are thus private, instant and free. Which can have many advantages for business and supply chains wanting to act and exchange with each other, without broadcasting across the whole network. It is a very interesting development to the blockchain space.
Stellar is quite the interesting blockchain, and I will admit I am an EOS fan boy so did not know as much as I should about this network. Writing this has really broaden my horizons and I will be following Stellar with a lot more enthusiasm from now on. This XLM project is one that is planning on being a major rival to Ripple (XRP) and has a lot of real world use cases. It too like EOS has a strong community supporting it as well as strong team working and developing the network further.
Thank you for your time!
(If you enjoyed this article why not check out some of my others.)
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