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Why Should I Invest In Crypto Stellar XLM?
Cryptocurrency, since its invention in 2008, has fast become a huge part of our financial activities. In fact, to many people, it is a way to save and invest.
Bitcoin, which is the very first cryptocurrency, established a new way to hold and spend money.
It has had a revolutionary impact on the cryptocurrency space and the financial sector as a whole.
After the introduction of Bitcoin, many other cryptocurrencies have been created but none has grown, in terms of market cap, as high as the first and original cryptocurrency, Bitcoin.
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The XLM Cryptocurrency
One of the numerous cryptocurrencies created after Bitcoin is XLM.
XLM is the cryptocurrency created and adopted by the Stellar distributed Ledger, who are known for facilitating cross-asset transfers of value.
The XLM cryptocurrency can be used as an intermediary currency in transactions that involve different currencies on the XLM network.
Stellar, the creator and sole user of the XLM cryptocurrency, is a decentralized network that allows users to create, transfer, and trade different types of cryptocurrencies.
Stellar was created in 2014, but it was not launched until 2015, and it was created with the sole mission of bringing the financial systems of the world together under one network.
Stellar is similar to every other decentralized platforms and exchanges that use the blockchain technology in that it is also spread across multiple servers.
What this means is that, all the activities that are carried out on Stellar are not monitored by a single source.
Even though the Stellar platform openly allows the listing and trading of all kinds of crypto assets and money representations, it also created its own digital currency called Lumens or XLM.
This digital currency is the foundation and bedrock of the Stellar platform.
XLM or Lumens, as some other people may refer to it, are most of the times, used to pay transaction fees on Stellar.
Although, apart from that, XLM also functions as that intermediate digital currency that helps Stellar users in executing their trades faster.
To explain this clearly, let us consider this example; assume that you want to make a payment in U.S. Dollars to someone in Mexico.
When you make the transaction on Stellar, Stellar converts your U.S. Dollars to XLM, and then the recipient in Mexico can receive it in Pesos.
The conversion from U.S. Dollars to XLM, and XLM to Pesos is literally done in seconds. With the creation of XLM, it is now easier to send and receive money from anywhere you may be in the world.
In summary, Stellar is the platform, XLM is the crypto asset used by the platform.
Why should you invest in XLM?
Having discussed about the origin, features and functions of XLM, let us discuss whether it is good or bad to invest in XLM as a digital currency.
Actually, XLM is looking like a good and worthy crypto asset to invest in because of how it had gained exponentially throughout 2021. This does not come as a surprise because the entire crypto market has reached a market valuation just north of $2trillion.
Stellar’s XLM is fundamentally a stable and strong cryptocurrency. To back this up, here are five (5) reasons to convince you to invest in it now.
XLM can practically be used as a currency
One of the top reasons why you should invest in XLM is its practicality as a currency.
Today, there are more than sixteen thousand (16,000) cryptocurrencies, and the majority of them just have a speculative value.
Bitcoin and Ethereum are the only crypto assets that have positioned themselves as a store of value, but the way XLM works to make payment easier, it is also on its way to be another viable option for making payments.
The future is becoming interesting for XLM because bitcoin is no longer practical in making payments because of its ever-rising network fees.
The same applies to Ethereum. If this continues, then XLM will be the next best crypto asset for payments.
XLM is featured with a KYC
One of the unfortunate cons of cryptocurrencies is how easily it can be misused by criminals. In 2021, President Christine Lagarde took note of the risk of cryptocurrencies being used to launder money and for many other financial and economic crimes.
As this problem affects cryptocurrencies in general, it does not affect XLM specifically.
The blockchain technology Stellar used to create XLM has a KYC feature that allows anybody that wants to build assets on the Stellar blockchain to conduct background checks on users.
This, therefore, means that in the long run XLM will be among the cryptocurrencies that will find favour with the regulators in markets like the U.S and E.U. With this backing, the value of XLM will turn out to be significant.
XLM is listed on multiple crypto exchange platforms
Having a cryptocurrency listed on many crypto exchange platforms affects the liquidity and credibility of the cryptocurrency, and both factors play a big role in the rise and growth of the said currency.
This explains why the price of cryptocurrencies go up whenever they are added to a new exchange platform.
It is quite simple, as XLM is listed on many platforms, more investors would have access to it and as the market expands, its value would surge because of the increase in demand.
XLM is a similar but safer version of XRP
XRP and XLM are two cryptocurrencies that are similar in a lot of ways. We can start from the fact that they are both used for highly valuable cross-border payments.
While Ripple (owners and developers of XRP have been working on getting XRP to be adopted as a means of payment in Europe and Asia, XLM has secured partnerships with companies like IBM.
Both cryptocurrencies are valuable investments but XLM seems to have less risk involved, and this could help it gain more adoption in the long term.
XLM has a fantastic team behind it
You can have an idea of how strong or weak a cryptocurrency is just by looking at the team behind it.
If the team behind the crypto is weak, then the crypto will most likely be weak too.
There have been many crypto projects that have faded away but this will not be a worry for XLM because it is backed up by one of the strongest and most sophisticated team in the crypto space.
With these five reasons, I believe you have gained a better understanding on why and how XLM may become the future of the cryptocurrency space and why it would be wise to invest in it now.
The stability, the ability for it to be an alternative to Bitcoin and Ethereum, the KYC features that helps to improve security and fight against crime surely means that a lot of thought went into the creation of this currency and it is worth every penny.
Should you invest in Cryptocurrencies at all?
From 2009 till now, cryptocurrencies have been the big investment opportunity of our times.
The news is always dominated with how one digital currency has dipped in price or how there has been a surge in the price of another.
Generally, a lot of people are beginning to turn their attention to cryptocurrencies, and with the introduction of NFTs, the cryptocurrency space is sure to be here for a long time.
Despite the craze about it, is it still a viable investment plan?
The first thing you should know is that cryptocurrencies are extremely volatile. This means they are likely to change in a quick and unpredictable manner, most time for the worse.
If this does not faze you and you want to go ahead, make sure you have an understanding of the digital currency you would be investing in and you have a good investment strategy.
Like I mentioned earlier, cryptocurrency has gone from alien currency created in 2009 to something that almost everybody is using and talking about, so there is a tendency that you might feel left out.
No matter how it makes you feel, make sure that you are not investing because you are afraid that you are missing out if you do not.
There is no yes or no answer to the question of if you should invest in crypto or not because it depends on what you really want.
You have to personally decide to invest or not, and to aid that decision, there are certain hard questions that you should be able to provide answers to. They are;
- Do you understand the digital currency you are investing in and how cryptocurrencies work in general?
- Are you happy and satisfied with the level of risk?
- How expensive was the digital currency some months ago compared to now?
- Is it certain that the price would go higher?
- If you buy the digital currency because you plan to sell later, who would buy it and why would they buy it at a higher price?
- If the digital currency is so great, why were you not interested when the price was lower?
Trust me, by the time you receive answers to the above questions, you would have clearly decided whether you are going to investing or not.
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