A Promising Future Beckons for Stellar (XLM)
At the beginning of the year, the Stellar development team speculated that their network was going to have an increased volume of transactions in 2018. This indicates that they were expecting the introduction of new functionalities such as the IBM cross-border payments. However, the Stellar blockchain has to improve its infrastructure to handle the increasing number of nodes on its network. For this reason, the team intends to implement the Lightning Protocol by the end of November this year. The improvement of the network’s scalability conforms to the Stellar’s objective of becoming the leading digital payment gateway in the world. This will set the stage for a competition between Stellar and Ripple for clients in the remittance sector.
Scaling With the Lightning Protocol
Initially, the Lightning Protocol was designated for the Bitcoin network, but it has been applied to the Litecoin blockchain, and will soon be deployed on Stellar. The protocol enables users to make off-chain payments using routers and hubs, meaning that it can facilitate cross-chain transactions. A user on the Stellar network can send tokens to another user on the Bitcoin network. To capitalize on this functionality, Stellar developers have established payment channels to the Bitcoin, Zcash and Ethereum networks.
Stellar might be Better than Ethereum
According to a report posted on the Global Coin Report, the Stellar network is vastly superior to the Ethereum network. This is because Stellar has much safer smart contracts that have additional functionalities, including multi-signature, sequencing, atomicity, batching, and time-bound functions.
The Weiss Ratings also agreed with the aforementioned report by mentioning that Ethereum needs to solve scalability issues to be at par with Stellar, EOS and Ripple. In this regard, they recommend the implementation of Zcash’s ZK-SNARKS to improve scaling on the Ethereum blockchain. Apparently, ZK-SNARKS can enable the Ethereum network to complete up to 500 transactions per second without depending on second layer solutions.
Besides slowing down the network, the scaling issues on the Ethereum platform have contributed to the recent decline of the cryptocurrency's value. However, Vitalik Buterin is confident that ZK-SNARKS will increase the platform’s throughput to 500 transactions per second, up from the current 15.
Future of XLM
Over the past few days, the crypto markets have been on a slightly upward trend. XRP has performed impressively in particular, with the peak being the moment it temporarily surpassed Ethereum as the second most valuable digital currency.
The value of XLM is likely to emulate the trend that XRP has underwent in the past few days. This is because of the execution of the Lightning Protocol, the introduction of the IBM cross-board payments solution and the recent procurement of Chain by the Stellar foundation.