Stellar Lumens: Analysis for a HODL (or Non-HODL)

2018 is off to a fast start for many coins, with the past couple of days being a thorn in an otherwise positive trend. Stellar Lumens was a coin that I have always been curious about. XRP was a marketing unicorn. It was perfectly palatable for the government, and it was designed to do things that were government friendly. The co-founder of XRP went on to found Stellar Lumens, a company that has a very similar system to Ripple, but a different marketing plan altogether. Let’s go into it.

Leadership

Jed McCaleb is the brains of this company. He was also the brainchild of Mt. Gox, the exchange that was tragically hacked after his departure. If we are talking about big guys in the industry, I don’t think we are going to find many more like this guy. He’s an American success story that also builds government friendly cryptocurrencies. I am hoping this is our Rocky Balboa, because we certainly need one in 2018. I haven’t seen many people step up to the plate and talking on behalf of blockchain, so I do believe the void is certainly open for these folks to join in. Garlinghouse is already the darling of CNBC, there is room for more!

Purpose

There are three in my opinion. They are first trying to get into the micropayment space with a rapid settlement software and ledger system. They are focusing on “banking the unbanked”. The costs for using their services are low, no matter what the amount that is being transacted. Sounds like a fork in Ripple! Oh, because it is. The vision is that holding lumens could be a way for people to store their money in something that isn’t a closet anymore. There are roughly 2B “unbanked” that could be considered a target market.

Compliance-focused. These guys want the banks to be able to use them! This is the McCaleb special sauce in my opinion. He is making sure that all of his stuff is always working with the powers that be, not against them. The network is set up for banks to plug themselves in, put in a clients money, and Lumens will spit it out the other side to anyone, anywhere, in any currency. Great middleman! Ripple is the institutional version, Lumens is the use case version. I believe this is why Jed left.

Lumens also built an excellent platform for design. If you want Raiden’s take, I think Mr. McCaleb saw that a platform is going to be a hell of a lot more important than a instrument of exchange. He has built a platform that is incredibly easy to design your own tokens on, that are so transparent that it can help you toe the line of the law. When the USA is just ramping up for their own regulations on ICOs, and you have Mr. McCaleb on the sideline with a  straight edge token maker, I think there could be some sweet music. I am not a tech person, so I will yield to others in it’s comparison to Ethereum. It has been advertised as a more advanced version of what is available. AKA, a newly paved road with custom car dealerships.

Competitors

Depends on which purpose. Personally, banking the unbanked is being worked on (and touted) by every cryptocurrency out there. They have debit cards, QR codes, CELL PHONES for it. There is a huge market for it, but the reason swaths of humanity are unbanked is because it is difficult to access basic services, including the education on cryptocurrency account set-up, payment and management. This is an “eventually” problem that will be solved. If this was the only part of this coin, I would move on. I am going to be leaving “banking the unbanked” up at the top. This doesn’t excite me. I am going to be talking about their near sighted solution cases moving forward.

The platform for creation is something I like very very much. I love when things can be worked on by entrepreneurs. When things are developed on a platform, their work is as good as being nailed into the walls of the block chain. I want to attract the most amount of smart people to use the coins I own, as their ingenuity in various forms will create a desire for the coin. Ethereum and NEO are the platforms I would say compete with Lumens right now.

Ethereum, which does have a Silicon Valley presence, has been around for quite some time, and the prospect of lightning is anyone’s guess as to effectiveness. I personally never bet against Ethereum, regardless of competitors. I just bet on all platforms.

NEO, “Chinese Ethereum,” is also an advanced platform that currently boasts the most robust way for developers to create. They have the best paint brushes at the moment, in this author’s very humble opinion. I don’t believe the NEO team is going to be focusing on the US ACO market just this moment (I could be wrong). I think NEO could very well be the advanced Chinese Lumens. No real need to deviate from that market for them…

Target Market 

This is the best target market anyone can ask for, and it is the reason I am writing about this coin. Business. High quality businesses that can transact in tokens quickly and compliantly for uses with every day transactions.

Let’s do an example: With Lumens I can have my bank send them USD, Lumens then encrypts that USD on XLM, and sends it off to the bank across the world in China. The bank gets that payment in Yuan, deposited directly to my friend. This target market is not being drooled over like it should. Decentralists will do their own thing, but for me USD is what puts gas in the tank. It will be that way. I want someone to play nice with my USD, and the keepers of my USD. Strong points to Lumens here.

Weaknesses

All friends of Raiden know I hate large supplies. This coin is designed for a specific use, and that use is certainly not being a $30,000 coin. 103B. That means it’s going to take a massive wave of adoption before we start seeing some price appreciation.

I want their vision to be a little more geared toward beating Ethereum. I think banking the unbanked will take significant amounts of time, and will require a lot of all hands on deck to get going. If we could shelf this goal for after we figure out whats going on with primary offerings in America, we may have more resources to speed up the process of such a noble goal.

Strengths

This is an American company solving an American problem. There are no hurdles to jump here! We have a gigantic market of investors/businesses that need a platform that they can begin to toy around with. If they can successfully offer tokens that will require payment in XLM, this is now a very good investment. This is the Ethereum Model, and look how well its doing from way up there.

Jed McCaleb. I think this darn guy is the one who saw the bureaucratic needle in the haystack and decided to jump in. The government friendly cryptos will always win over the anti-government cryptos. I am not going to the bonfire with those people, I want to make money this year. I have said this before. Americans want something simple, at their doorstep. This is beginning to sound like just that.

Technical Jargon 

  • Current Price 1/15/18- $.63
  • Current Supply- 17,890,569,956 XLM
  • Total Supply- 103,590,302,054 XLM
  • Market Cap- 11,447,227,515 USD
  • Market Cap Rank- 9

Partnerships

IBM. This is the big one. You may not know this, but IBM essentially controls every single corporate office in America. Their software, wiring, and hardware is what keeps most places up and running. IBM has used them for settlement, while they clear the transactions that they are doing thousands and thousands (and thousands) of. Baby steps partnership right now. However, this is already a working relationship. IBM is not a company to discount in the new wave of technology. Their technical infrastructure in American professional society is second to absolutely none. This partnership alone can tell you many things about Stellar Lumens. It is quite interesting IBM is also hiring Ethereum Developers.

Overall

I sold off some of the portions I had before the sell-off a week ago. It performed well for me, but I was going to be migrating back to my ETH. Now that I have done some real digging here, I love what this is. It is Jed McCaleb. I trust that man. I have no idea of his coding experience, or overall involvement in the nuts and bolts of any currency he has worked on behalf of. However, this man is preparing an American Noah’s Ark. This is the boat that he thinks everyone will get on, AND B2C BUSINESS OFF OF. The most important thing is the business part, hence the caps. If we are talking about a warming up ICO/ACO market in the United States, there is no better place to be apart of than a mass customization shop that can give you a filled out form to hand into the government. That hasn’t been mastered yet, even on the exchange side. I just really hope they focus on the platform first. Business comes first to set up their store fronts. People go shopping second. Lumens is a coin with customers and a lonely target market. I can’t think of that being a bad thing.

 

I am not recommending you buy XLM, or any of the currencies I have listed. You must look into each and every investment, and analyze all angles based on your savings and risk tolerance. A lot of people ask me thoughts on currencies. No currency is made for everyone. I would have to know income, savings, investment background, risk tolerance, and the list goes on. This is the reason why no one can ever recommend something to you through a long term price prediction. I want you to make money. I wish you the best of luck.


A look at the mountain range.

Disclaimer: The author holds investment positions in the cryptocurrencies discussed in this article. 

Image courtesy of Pexels and Shutterstock. 

Author:
Mythological God of Lightning. Cryptocurrency/Blockchain writer, evangelist, and friend. May the odds be ever in our favor.