If you have read our guide to Stellar, you must know that it is a payment protocol that has been designed quite differently from the ordinary forms of cryptocurrencies we are ordinarily used to. It is meant primarily for easing payments across the borders and for reaching out to communities in developing countries that have very little to no access to banking facilities. Clearly, this is a cryptocurrency that was developed with great ambitions and has quite a lot of potential. Yet, it has certain pitfalls as well. Let’s have a look at the pros and cons of Stellar.
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Pros of Stellar:
The following factors make the Stellar payment protocol and cryptocurrency truly worthy of its name:
1. High Speed of Transactions:
Stellar undertakes the processing of about 2000 transactions per second. As a result, each transaction gets validated within 5 seconds maximum. The immense speed makes it a great development for quick cross-border payments.
2. Low Transaction Costs:
Since Stellar is developed as a payment protocol that prioritizes profit far less than a comparative payment protocol like Ripple does. Moreover, the low transaction time and high operational efficiency translates to a lower cost of transactions.
3. Enhanced by Tech Elements:
Stellar can incorporate elements such as blockchain smart contracts, alongside features like multi signatures which enhance the functionality of the payment protocol in general.
4. Decentralization of Stellar:
The Stellar Protocol does not have a set number of validators. Availability of a larger pool of validators compared to a close competitor such as Stellar makes it a more decentralized option. At a time when concerns about centralisation are rising, Stellar represents a ray of hope.
5. Partnerships With Big Names:
Now that a tech behemoth such as IBM has begun implementing the Stellar payment protocol, the credibility of the company has increased even further.
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Cons of Stellar:
Following is a list of the problems faced by the Stellar payment protocol:
1. High Competition:
Stellar faces a great deal of competition and hence it is difficult for it to hold ground. The Ripple payment protocol is its biggest competitor, as both of them were conceptualised by the same person. In addition, even the traditional banking institutions are trying to diversify into better cross-border payments,and retain their reach into various community. The SWIFT platform is one such example.
2. Minimum Limit for Having Access:
You must have at least 20 XLM coins in your wallet for it to work. This minimum balance system can tend to be a bit of a problem for users who don’t want to do much their toes while investing in XLM. However, no matter how many coins you decide to buy, make sure to store them in best cryptocurrency wallets of 2018.
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