Lately, there’s been a confluence of negative events in the cryptoworld and, as diligent stewards of the media here at Zerononcense, we have made it our business to ensure that we report each and every single event that comes to our attention.
However, in the midst of that process, we noticed that we were beginning to aggregate a ton of ‘negative’ news.
So, we took it upon ourselves to go out and share some positive news with you all, and that positive news comes in the form of Stellar Lumens’ prospects for the future.
Background and Inception of Stellar
For those that are not familiar, Stellar was created by Jed McCaleb.
Before founding Stellar, Jed McCaleb was involved in a few other very well-known entities in the space.
Jed McCaleb was the original founder and creator of Mt. Gox, however, he eventually sold the website in 2011, long before news of the exchange breach, court proceedings and insolvency would dismantle the entire exchange.
We would later see an appearance from Jed McCaleb as a co-founder of the coin that we’ve all come to know as $XRP (currently ranked in the T5).
To make a long story, short — there was a falling out between Jed McCaleb and Chris Larsen (perhaps there were other issues at play underneath the surface that the general public still does not know about), and Jed ended up leaving the project.
One potential ‘black eye’ that occurred during this process, unfortunately, was the perceived malicious intent in his announcement that he would sell his remaining supply of $XRP into the markets, which many concluded would effectively suppress the price of the coin, potentially to the extent of squandering the project’s future potential.
Whether this would have happened or not, is anyone’s guess – but there were subsequent court proceedings and it seems that whatever disagreements there were among the founders has been successfully resolved at this point. Therefore, this should not present itself as a PR issue for the protocol in the future.
Intro Into the Creation of Stellar Lumens
Obviously, Jed’s departure from $XRP (Ripple) did not preclude him from continuing to innovate in the blockchain space.
After leaving the protocol, Jed went on to start a project that we all know now as ‘Stellar Lumens’.
The Premise of Stellar Lumens
Originally (and still) perceived to be a direct competitor to Ripple, and for good reason.
If you go to Stellar’s main website, you’ll see on the front page that they proclaim the project to be the, “Future of Banking”.
Obviously, this is a slogan that embodies the same business model that Ripple has as well, so it only makes sense that the two companies would be diametrically opposed to each other, even when factoring out the former soured business partnership between Jed McCaleb and the other Ripple founders.
The biggest question, from a competitive aspect, that investors should ask themselves about Stellar is whether there will be enough market share for two major cryptocurrencies (Ripple and Stellar) to co-exist or if this is a market where only one entity may come out ahead.
If this is the case, then Stellar may be in the lead in terms of its efficacy as a product. Below are a litany of reasons for why investors should be reasonably optimistic about the prospects of Stellar Lumens in the long-term.
Stellar Has Diversified
So, to get to the crux of this article, the above heading represents the first major reason for why individuals in the market should be bullish on Stellar’s future prospects.
Stellar has diversified use cases
Although Stellar advertises its value offering is in providing the ‘future of banking’, Stellar has found value in being used in several other technologies as well.
Below, are the following ways in which Stellar has found a sufficient, demonstrable and apt use case.
Use Case #1 — As a Decentralized Exchange
For those unaware, the blockchain technology underpinning Stellar has allowed for the creation of an established, robust and functional decentralized exchange.
In fact, you can find this exchange here at this web address:
Trade on the Stellar Decentralized Exchange. StellarTerm is an open source client for the Stellar network. Send, receive, and trade assets on the Stellar network easily with StellarTerm.
In a crypto space with impending regulation and continued uncertainty regarding the centralized exchange entities in the space, this presents itself as a major potential use case for Stellar.
The fact that it has already been successfully implemented is validation of the effectiveness of Stellar technology.
Use Case #2 — As a Stablecoin (IBM Partnership)
Perhaps the biggest news of the year for Stellar (and potentially the entire blockchain space in terms of demonstrable use cases), appeared when IBM announced earlier this year that they would be launching a stablecoin using Stellar’s protocol.
A cryptocurrency pegged to the U.S. dollar, based on the Stellar network, is part of an IBM project to explore “crypto dollar” payments.
IBM is a well-known technology company in the United States that has essentially been the underpinning for many technological innovations around the world and for U.S. government initiatives (i.e., NASA, ‘Watson’, computer manfuacturing, Microsoft’s first licensing partner, etc.). So, when they announce their intentions in July of this year (2018) to launch a stablecoin on the Stellar Lumens protocol, this news essentially ‘verified’ the protocol’s legitimacy.
Here are some specific reasons for why this partnership was a big deal:
A) It again validated the technology of Stellar Lumens because one could sufficiently reason that a company as massive and technologically advanced as IBM would definitely perform their due diligence before making the leap to working with any cryptocurrency in the space.
B) This partnership also nulled the argument of ‘blockchain is incredible, but cryptocurrencies are useless’. The obvious implication of the IBM partnership can and should be, ‘If a company as big as IBM is able to deem Stellar Lumens to be a worthy platform for development, then surely other technological companies can find a use via the Stellar Lumens protocol’
Beyond the IBM partnership though, the eventual successful launch of the stablecoin on the Stellar Lumens’ protocol showed that stablecoin development is another major use case for the cryptocurrency.
Big Blue is helping launch a stablecoin – coins that are pegged to fiat currencies – cryptocurrency. IBM Corp. ( IBM) has partnered with Stellar, a blockchain that shares technology with Ripple, and Stronghold, a startup, to launch USD Anchor. Coins of USD Anchor are backed by an equivalent amount of U.S.
For those paying attention to the news lately, many have probably noticed the vast influx of stablecoins entering in the market as of recent.
Since stablecoins are ‘all the rage’ now, this only provides more of a boost for this use case.
Use Case #3 — Expediting Exchange-Based Technology
Another overlooked use case for Stellar Lumens is the fact that its technology has been used as the underpinning for exchange-based technology around the cryptosphere (not just DEX platforms either).
This is yet another diversified use case for Stellar Lumens.
Other Diversified Use Cases (from the Stellar Lumens website):
Stellar Lumens is Also Gaining Name Recognition
This is an important facet to consider for those that are currently Stellar Lumens’ fans.
Due to the protocol’s position among the top cryptocurrencies (ranked #6 at the time of publication), it has the advantage of name recognition.
Its longevity in the space (compared to the amount of time that the crypto space itself has been in existence), is also another major benefit. By having additional time to plant their roots and establish the project as a pillar of the community, it has gained a level of legitimacy that may take other projects significantly longer to obtain.
This is known by many as the ‘network effect’ in business.
What is the network effect?
In a nutshell, the network effect is:
This article certainly does not cover every single aspect of Stellar Lumens, nor does it dive into every use case or potential reason to be bullish, but what is presented above should be sufficient for investors to work off as they continue to do their own due diligence and research on this protocol.
As always, this article is not meant to be taken as strict financial or investment advice, but rather as information.
Neither the author(s) nor the publication that this is being hosted in (Zerononcense) were paid or compensated in any way, shape or form for the creation of this article and the Stellar Lumens’ team feedback / input was not considered in the publication of this piece either.