Is Stellar Lumen a Good Investment in 2022?

The stellar network offers low-cost and efficient payment solutions. Lumen is its native digital currency. Its interoperability offers good flexibility to retail users allowing them to trade digital currencies with fiat currencies conveniently.

Let us discuss what is Stellar Lumen (XLM), how it works, and whether it is a good investment in 2022.

Stellar Lumen – Introduction

Stellar is a digital payment network that enables the transfer of digital currencies, fiat currencies, and the conversion of these currencies.

The stellar network was founded by Jed McCaleb in 2014 who also was the co-founder of Ripple. Stellar Lumens (XLM) has its own code and it runs as an open-access network.

Lumen (XLM) is the digital cryptocurrency invented by the Stellar network. It was created to facilitate the Stellar users at first. However, it is evolved into a grown crypto coin over the years.

Stellar is a cross-border currency transfer network. It runs on blockchain technology and uses decentralized public ledgers to store and distribute digital tokens.

It was introduced to make digital payments faster, cheaper, and more secure. Its compelling feature is to allow conversion of digital and fiat currency conversions.

Stellar takes a different route from other cryptocurrencies. It uses Stellar Consensus Protocol (SCP) or mini networks for distributing the consensus function, unlike other networks that use mining or Proof-of-Work (POW).

How Stellar Works?

Stellar runs on blockchain technology. It is a distributed network of computers called nodes that connect.

Stellar Lumens is backed by the SCP that differs from mining or POW as mentioned above. It makes XLM a faster network that can execute more transactions in less time.

XLM’s main appeal is to create, send, and trade digital forms of all currencies including fiat currencies like the Dollar, Euro, and Pound. This enables users to create a digital token of any fiat currency.

The digital tokens of fiat currencies can then be converted into cryptocurrencies. Unlike other major crypto networks, XLM aims to connect existing financial systems.

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XLM supports the creation of digital tokens of any currency. Also, XLM users can keep and trade any assets and cryptocurrencies on this network. It enables users from around the world to keep a digital version of any currency and convert it into crypto or any other asset quickly.

In short, users can trade (buy and sell) any type of digital assets available on XLM. They can convert fiat currencies into digital tokens and vice versa. They can use the XLM network to remit currencies anywhere in the world quickly with low costs as compared to traditional remittance methods.

What is Unique About Stellar Lumen?

Stellar Lumen (XLM) owns its unique proprietary network Stellar Consensus Protocol (SCP). It is run by the Stellar Foundation for enhanced transparency and compliance with international monetary regulations.

XLM runs as an open-access network. It means retail users can use it easily without needing any special skills.

Anyone using XLM can create their own digital assets. Simply put, a user can convert a fiat currency balance into a digital token of the same currency or any other digital asset.

The user can then instantly transfer these tokens to anyone in the world. The receiver would receive the amount in Lumens and convert it into the local fiat currency instantly.

Stellar Lumen also offers very low remittance and transaction costs. Currently, the minimum transaction cost is only 0.00001 Lumen.

Lumens are also issued with limited availability. There is a total of 50 billion Lumens in the market of which nearly 50% are in use and there will be no more Lumens issued.

Stellar has created an accessible and cheaper network that offers global currency interoperability for remittance, payments, and trading.

In short, Stellar Lumen has all the ingredients of being a competent digital asset. With a sound foundation, XLM is bound to strive for the long term.

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How to Buy Stellar Lumen?

Lumens are available at all major digital currency exchanges. Buyers can also purchase Lumens directly from Stellan Lumens (XLM).

All customers who want to use Stellar will need to purchase Lumens. Stellar transactions are executed in Lumens. It is the base digital currency of Stellar.

You can buy Lumens directly from the Stellar network by creating an account and converting funds into Lumens. Then, you can use this balance to trade digital assets, Cryptocurrencies, or transfer payments.

Similarly, you can buy Lumens from any major digital exchange by opening an account and converting your fiat currency balance into Lumens.

Major digital exchanges offering Lumens include:

  • Coinbase
  • Kraken
  • Binance
  • Bittrex
  • Huobi

Is Stellar Lumen a Good Investment in 2022?

Cryptocurrencies are wildly volatile and we have seen that in the past decade on various occasions. The Crypto market is subject to various risks and threats which means the volatility trends will continue in the future as well.

However, the volatility of an asset means high-profit opportunities as well. Although it brings the high risk-reward relationship into play.

Stellar Lumen (XLM) is another promising digital asset that has shown good signs in the early years since its inception. The current market price of Lumen is $0.15.

XLM touched an all-time high of $ 0.94 in January 2017, although it dropped sharply afterward. It means XLM can break the psychological barrier of $1.0 at any time given its recent record.

The price dip in XLM in recent days is largely due to a bearish market trend for cryptocurrencies overall. The macro trend is likely to continue in the short term.

Having said that, XLM holds all the right ingredients that make a digital asset a sound investment. Its technological development offers exciting prospects.

Stellar has recently partnered with global exchanges like Moneygram. Its customer base is steadily increasing as well. Increased popularity and public acceptance mean XLM enjoys good liquidity as well.

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In short, Stellar Lumens holds good prospects in the long term even if it has seen a sharp decline in the short term.

Why You Should Buy Stellar Lumen?

There are some compelling reasons for you to consider buying Lumens.

Stellar Lumens (XLM) is bound to succeed in the long-term for various reasons, therefore, it sounds like a good investment right now.

Interoperability

Users can create a digital token of any currency using the Stellar network. It makes XLM a unique network where all fiat currencies can be converted to and from digital currencies.

Cheap Transaction Costs

Stellar Lumen offers a cheap and cost-effective payment system. The transaction cost with XLM is currently only 0.00001 Lumen.

Therefore, its wide acceptability will further improve due to lower transaction costs.

Increasing Demand for Efficient Payment Systems

XLM is offering a unique digital payment management system. Conventional banks and exchanges are likely to adopt the decentralized approach adopted by digital currency networks in the future.

Promising Partnerships

XLM has recently partnered with Moneygram. It is working on a promising partnership with IBM as well.

These global partnerships mean XLM will rise in popularity in the future.

No Legal Controversies

Unlike many other cryptocurrencies, Lumen has not yet faced any legal actions from the US regulatory agencies.

Why You Shout Not Buy Stellar Lumen?

Stellar Lumen (XLM) is also prone to high price volatility. It means your investment will be at high-risk at any time.

XLM also largely follows the price trends of major cryptos like Bitcoin. Even with its strong presence, it is unlikely to create a room of its own.

XLM is banking on its widespread acceptability and global partnerships. However, these partnerships can break at any time.

Negative news or legal controversy can bring down XLM quickly as well.

Overall, XLM remains a good prospect for the near future with promising signs of growth.