Stellar Network is a decentralized platform that keeps and maintains all the internet transactions between individuals and companies. The servers of the Stellar Network have been designed to keep track and balance all these transactions. The users of the Stellar Network basically have virtual accounts that can hold the Stellar Lumens coin.
Stellar Lumens (XLM) is a form of cryptocurrency that represents the assets of the Stellar Network. A lumen is an equivalent of a unit of digital currency. For although the currency is not tangible, it can be used effectively to transfer money all around the world and even facilitate various transactions in different currencies in a safe way. The lumen was created in 2014 when the Stellar Network unveiled its assets to the public and the assets represented 100 billion Stellar Lumens. Given that most currencies have a short form, Stellar Lumen coin can also be referred to as XLM.
The Stellar Network runs and operates all the transactions involving the Stellar Lumen coin. While the normal centralized banking system relies on the government, the Central Bank, and corporate boards to determine the distribution of currency by printing fiat money, the decentralized Stellar Network, on the other hand, rely on the underlying servers that apply the technology of cryptography to distribute lumen coins.
Lumens are available for purchase in various market platforms; however, it should be noted that the lumen coin has the risk of losing value just as other normal currencies. The stellar network has some stringent measures to ensure that the security of the currency users is guaranteed. For example, it is a requirement that all account holders have a minimum of 20 lumens in their accounts to ensure that there is no fake account. Stellar Lumens act as a trading medium between two currencies (say EUR and USD) in cases where a direct market does not exist. Lumens offers a very cheap option to make live transactions in the Stellar Network.
In the recent past, holders of the lumen have endured the dilution of the currency to a very high degree. The planned move by the Stellar Network to pump in 16 billion lumens into the Stellar Network will bring down the value of the stellar coin by a large scale. Adding more currency units to the market have the opposite effect of lowering the value of the currency. The same principle applies with the digital currency. The move by Stellar Network will start a catalytic lumen auction in the market leading to the further drop of the value of the coin.
