Q and A about Stellar Lumens!
Here are some questions and answers I have found from the network that might be useful! This could be a huge hit soon, I know I am invested so I wanted to share you with so you can make the decision for yourself!
What are Lumens?
Lumens are the native asset of the Stellar network.
Native means that lumens are built into the network. Asset is how the network refers to an item of value that is stored on the ledger.
One lumen is a unit of digital currency, like a bitcoin.
While you can’t hold a lumen in your hand, they are essential to the Stellar network—they contribute to the ability to move money around the world and to conduct transactions between different currencies quickly and securely.
Where did Lumens come from?
In 2014 the Stellar network launched with 100 billion stellars, the original name of the network’s native asset.
In 2015, with the launch of the upgraded network, the name of the native asset changed from stellar to lumen to distinguish it from 1) the Stellar network itself and 2) Stellar.org, the nonprofit organization that contributes to development of the network.
Why does the Stellar network need a native asset?
The Stellar network offers all of the innovative features of a shared public ledger on a distributed database—often referred to as blockchain technology. The Stellar network’s built-in currency, the lumen, serves two purposes:
First, lumens play a small anti-spam role.
Each transaction has a minor fee—0.00001 lumens—associated with it. This fee prevents users with malicious intentions from flooding the network (otherwise known as a DoS attack). Lumens work as a security token, mitigating DoS attacks that attempt to generate large numbers of transactions or consume large amounts of space in the ledger.
Similarly, the Stellar network requires all accounts to hold a minimum balance of 20 lumens. This requirement ensures that accounts are authentic, which helps the network maintain a seamless flow of transactions.
Second, lumens may facilitate multi-currency transactions.
Lumens sometimes facilitate trades between pairs of currencies between which there is not a large direct market, acting as a bridge. This function is possible when there is a liquid market between the lumen and each currency involved.
What is XLM?
XLM is shorthand for lumen. Most currencies have 3-letter codes (USD, EUR, AUD, BTC) as an international standard.
What is the base fee? Who profits from those lumens?
There is a nominal fee, referred to as a base fee, associated with each operation in a transaction. The sender of the transaction incurs the fee.
The fee functions as a deterrent: Though nominal, it discourages users with malicious intentions from flooding the network (otherwise known as a DoS attack).
The base fee is currently set to .00001 XLM. The fee will increase if the system suspects an account is submitting transactions with the malicious intent to bring down the network.
No one profits from the base fee. The ledger collects those funds and redistributes them in the process of inflation (see the next question, below).
How does inflation work with lumens? Why is there inflation?
The Stellar network has a built-in, fixed inflation mechanism. New lumens are added to the network at the rate of 1% each year. The network also collects a base fee for each operation in a transaction. The funds from base fees are added to the inflation pool.
As a balancing measure for the ecosystem, anyone who holds lumens can vote on where the funds in this pool go. Each week, the protocol distributes these lumens to any account that gets over .05% of the votes from other accounts on the network.
More info like this can be found on the XlM website
Xlm is one of the most comfy HODL !
It pays to hold is this game!
HODL!!!!
okay i cant say anything
3.PROFIT
Stellar vs Ripple...who has the Stamina?