Aside from Bitcoin, positions of altcoins have changed consistently over the last months. One of the hottest digital currencies worth looking into for 2018 is Stellar. Its value surged by more than 65% since Friday making it into the top ten largest cryptocurrencies.
By Tuesday, Stellar had a market cap of $10 billion making the digital currency the eight-largest cryptocurrency according to the report of CoinMarketCap. The digital coin traded near 56.4 cents which was 17.5% higher than its initial value on that same day.
What Makes Stellar Special?
There are a number of reasons why Stellar spiked in value recently. For starters, Stellar operates significantly faster than Bitcoin. It has the ability to settle transactions in 2 to 5 seconds. In addition to this, users can also quickly exchange the digital currency back to US or Euros according to Stellar’s website. Stellar’s digital coins are officially called lumens or XLM.
IBM has expressed interest in using Stellar. IBM has been using Stellar’s network in order to perform cross-border payment systems that can be done with large banks. It also appears that Consulting firm Deloitte is also an IBM’s partner in this venture.
Will Stellar Continue to Rise?
Though Bitcoin soared by 1,900% in a span of 12 months in 2017, other altcoins have also shown a significant jump in value percentage-wise. Ripple, for instance, jumped by as much as 35,500% last year and ended in second place for top ten cryptocurrencies based on market capitalization.
Will Stellar continue its bullish trend in the next months? Both Ripple and Stellar have been started by the same founder. Jed McCaleb, who also created Mt.Gox Bitcoin exchange, left Ripple around 2013. He also sold Mt.Gox in 2011 to Mark Karpeles in order to focus on Stellar.
Ripple made a good run recently basically due to the PR runs that it did over the last months in both Asia and the US. On the other hand, things are different with Stellar as barely anyone heard significant news about it until now.
If we look at Stellar’s numbers, it has increased by as much as 900% since the start of December. And so far, it is getting the speculative attention that it needs. Though Stellar was a fork of Ripple in 2014, it doesn’t share common code with each other. The big difference is that Ripple is still centralized while Stellar, on the other hand, runs an open ledger that anyone can access.
And in reality, Ripple’s centralized nature raises a lot of questions, especially from crypto purists. Also, Stellar tends to not just focus on banks and institutions when it comes to dealing with cross-border transactions. Stellar wants to resolve issues in developing markets too. Stellar has already established live payments between Europe and the Philippines and is even looking to expand and add Africa and the Middle East by 2018.
How big could Stellar get at this point? You also have to consider limitations on Stellar’s growth at this point. For now, most exchanges allow you to trade Stellar by selling other digital currencies mainly BTC and ETH. And also, keep in mind that it competes against Ripple. Though they are focused on underdeveloped markets, it is possible that Ripple also goes takes this market share away from Stellar if it decides to go there.