How to buy Stellar / XLM in Canada

Although Ripple and Stellar were both built by McCaleb and have some technological similarities, they differ in their target markets and how they plan to achieve their goals. 

Stellar focuses on stablecoins and has a not-for-profit model, in stark contrast to Ripple’s payment network and XRP token, both of which generate revenue for the company through monthly sales, notes Edwards. In addition, Stellar is less concerned with users holding massive amounts of its native token, while Ripple attempts to make owning large amounts fundamental to the operation of certain products.

There are also differences in the networks, tokens and organizations behind the two cryptocurrencies—for example, how they validate transactions. “The XRP network is permissioned, meaning validating node participation is limited to a trusted list provided by Ripple,” says Christopher Matta, president of 3iQ Digital Assets (US), Canada’s largest digital asset fund manager. “By contrast, XLM is open, which means anyone can become a validating node.”

At the organization level, Ripple is for-profit, while Stellar Development Foundation is a non-profit that supports the development and growth of the Stellar network. Stellar has set the altruistic goal of creating a borderless blockchain payment network platform that helps people in developing economies who have no access to banking services. “Many citizens of such countries work abroad and send money back home, which can cost a lot of their already tight incomes to make a transaction with existing services,” Edwards points out. 

Lumen, like bitcoin, has a finite supply of tokens. There are about 50 billion lumens in existence, of which nearly 20 billion are in circulation. The Stellar Development Foundation retains the remaining 30 billion, which it plans to release in public markets over the next few years. (See the Lumen Accounting guide for further details.)

To keep bad actors at bay, Stellar imposes a minimum balance of 1 lumen on each account and a per-transaction fee of 0.00001 lumen. Stellar argues that the costs are small enough to keep lumens widely accessible, but big enough to discourage criminal activity.

Is XLM a good investment right now?

It’s difficult to evaluate emerging technology in its early stages of development. That said, the long-term thesis on the future of payments and all things Web 3.0 is hard to ignore. Stellar seems focused on helping to improve the payments ecosystem for individuals. For instance, there’s no intermediary bank that tacks on fees or slows down transaction validation; instead, Stellar’s network confirms transactions across borders in just a few seconds.

As for the coin’s performance, XLM’s rise over the past year has been nothing less than impressive. The virtual currency was worth a paltry $0.07 a year ago, but it skyrocketed to a peak of $0.73 (a 942% jump) in May 2021 before sliding back down to $0.37 (still up 185% on a year-to-date basis) as of Oct. 22, 2021.

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