Forget Bitcoins: grab your Lumens

Will Stellar Lumens be the next cryptocurrency star?

The cryptocurrency hype is on. And it does not signal to slow down anytime soon. While Bitcoin is the first and by far the most popular digital currency the landscape in 2021 offers a lot more.

Screenshot from Stellar Beat Dashboard (Stellar network visibility)
Screenshot from stellarbeat.io

The Concept

Bitcoin in 2009 was forged” without any other model to compare to. The initial view was to offer a secure and reliable peer-to-peer payment network. No central authority should control the system neither establish the rules and fees. BTC is the cryptocurrency.

Their Mission

Bitcoin mission was to start a revolution and this has been accomplished with full marks. From Satoshi Nakamoto white paper:

Creators

Bitcoin mythical inventor is known as Satoshi Nakamoto. His vision and whitepaper have initiated a fundamental change in the financial and payment world. He has never been seen (despite several attempts to identify him and few self-proclamations) and the legend says he handed over the control of the project after mining 1 million bitcoins. The Bitcoin Foundation was created several years later to coordinate the efforts of the community and ensure a long term roadmap.

Pile of red plastic coins (BTC, USD, GBP, etc..)
Pile of red plastic coins (BTC, USD, GBP, etc..)
Photo by Elena Mozhvilo on Unsplash

Infrastructure

Bitcoin network is vast, relying on 10K nodes according to Bitnodes, a Bitcoin network tracker. There are different types of nodes and anyone can decide to run one, but typically this is left to users who want to invest directly (not via Cryptocurrency Exchange platforms) and miners.

Transaction Cost

The cost of transferring BTC is not pre-established and can vary: it is called the “mining fee” and it is associated with the transaction. Latest figures indicate a fee between $14 and $20, take a look at the Bitcoin Average Transaction Fee Chart on YCharts.

Transaction Speed

Bitcoin transactions are reasonably fast and the amount is transferred in (near) realtime. However each transaction must be verified by the network before those BTCs can be spent.

Supply Limits

Bitcoin maximum supply is 21 million (Why Did Satoshi Nakamoto Limit Bitcoin’s Supply to 21 Million?): no more BTCs will be released once the very last bitcoin is mined (expected in 2140 anyway). As per March 2021 the circulating supply is over 18.5 million.

Screenshot from developers.stellar.org to display Lumen supply metrics
Screenshot from developers.stellar.org to display Lumen supply metrics
Lumen Supply Metrics — Screenshot from developers.stellar.org

Investors and Initiatives

Stellar Foundation had the support of investors (Stripe during the seed funding round) as well as the likely financial involvement of the founders.

Mining and the environment

Mining is one of the most fascinating terms introduced by Bitcoin. And it is no yet fully understood by most.

Back part of a server
Back part of a server
Photo by Florian Krumm on Unsplash

Development

Both projects are open-source and using GitHub.

Price charts

Over the last few years Bitcoin has claimed all headlines in the financial world with its incredible and persistent growth. Yes, there have been setbacks but its course looks like is set to reach higher peaks.

Screenshot of Bitcoin 1 Year Trend chart (from EUR 5276 to EUR 50776)
Screenshot of Bitcoin 1 Year Trend chart (from EUR 5276 to EUR 50776)
Bitcoin 1 Year Trend (screenshot by author)
Screenshot of Lumen 1 Year Trend chart (from EUR 0,03 to EUR 0,50)
Screenshot of Lumen 1 Year Trend chart (from EUR 0,03 to EUR 0,50)
XML 1 Year Trend (screenshot by author)

Lumens or not Lumens?

Bitcoin is, without doubts, today’s winner in the cryptocurrency arena. It has brought a new concept of FinTech, excited small and large investors, convinced business leaders and proven detractors wrong (anyone left?).

Conclusion

I hope you have enjoyed the article as much as I did when researching the facts and writing down my thoughts. Next post will look at Stellar Lumens applications and integrations.

Software Engineering, Data Engineering, Coder. And other hobbies too.

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