Best of the Week
Most Popular
1. Gold Final Warning: Here Are the Stunning Implications of Plunging Gold Price - P_Radomski_CFA
2.Fed Balance Sheet QE4EVER - Stock Market Trend Forecast Analysis - Nadeem_Walayat
3.UK House Prices, Immigration, and Population Growth Mega Trend Forecast - Part1 - Nadeem_Walayat
4.Gold and Silver Precious Metals Pot Pourri - Rambus_Chartology
5.The Exponential Stocks Bull Market - Nadeem_Walayat
6.Yield Curve Inversion and the Stock Market 2019 - Nadeem_Walayat
7.America's 30 Blocks of Holes - James_Quinn
8.US Presidential Cycle and Stock Market Trend 2019 - Nadeem_Walayat
9.Dear Stocks Bull Market: Happy 10 Year Anniversary! - Troy_Bombardia
10.Britain's Demographic Time Bomb Has Gone Off! - Nadeem_Walayat
Last 7 days
Stock Market Pause Should Extend - 21st April 19
Why Gold Has Been the Second Best Asset Class for the Last 20 Years - 21st April 19
Could Taxing the Rich Solve Income Inequality? - 21st April 19
Stock Market Euphoria Stunts Gold - 20th April 19
Is Political Partisanship Killing America? - 20th April 19
Trump - They Were All Lying - 20th April 19
The Global Economy Looks Disturbingly Like Japan Before Its “Lost Decade” - 19th April 19
Growing Bird of Paradise Strelitzia Plants, Pruning and Flower Guide Over 4 Years - 19th April 19
S&P 500’s Downward Reversal or Just Profit-Taking Action? - 18th April 19
US Stock Markets Setting Up For Increased Volatility - 18th April 19
Intel Corporation (INTC) Bullish Structure Favors More Upside - 18th April 19
Low New Zealand Inflation Rate Increases Chance of a Rate Cut - 18th April 19
Online Grocery Shopping Will Go Mainstream as Soon as This Year - 17th April 19
America Dancing On The Crumbling Precipice - 17th April 19
Watch The Financial Sector For The Next Stock Market Topping Pattern - 17th April 19
How Central Bank Gold Buying is Undermining the US Dollar - 17th April 19
Income-Generating Business - 17th April 19
INSOMNIA 64 Birmingham NEC Car Parking Info - 17th April 19
Trump May Regret His Fed Takeover Attempt - 16th April 19
Downside Risk in Gold & Gold Stocks - 16th April 19
Stock Market Melt-Up or Roll Over?…A Look At Two Scenarios - 16th April 19
Is the Stock Market Making a Head and Shoulders Topping Pattern? - 16th April 19
Will Powell’s Dovish Turn Support Gold? - 15th April 19
If History Is Any Indication, Stocks Should Rally Until the Fall of 2020 - 15th April 19
Stocks Get Closer to Last Year’s Record High - 15th April 19
Oil Price May Be Setup For A Move Back to $50 - 15th April 19
Stock Market Ready For A Pause! - 15th April 19
Shopping for Bargain Souvenirs in Fethiye Tuesday Market - Turkey Holidays 2019 - 15th April 19
From US-Sino Talks to New Trade Wars, Weakening Global Economic Prospects - 14th April 19
Stock Market Indexes Race For The New All-Time High - 14th April 19
Why Gold Price Will “Just Explode… in the Blink of an Eye” - 14th April 19

Market Oracle FREE Newsletter

Top 10 AI Stocks Investing to Profit from the Machine Intelligence Mega-trend

Could Stellar Lumens be a Challenger to Bitcoin for International Payments?

Currencies / BlockChain Feb 19, 2018 - 03:27 PM GMT

By: Boris_Dzhingarov

Currencies

Bitcoin has clearly cemented its position at the top of the cryptocurrency pecking order.

The last few years have seen its status grow immensely, to the point where many people (wrongly) see cryptocurrency and Bitcoin as inseparable.

In the last year or so, Bitcoin’s price has skyrocketed and many new investors have benefitted hugely. If you’d bought a single Bitcoin at the start of 2017, you’d now be about $7000 better off.




Aside from speculation, one of Bitcoin’s most important uses has been in global remittances. Many people have found cryptocurrency to be a great way of sending money overseas without running into many of the problems associated with traditional methods.

Until now, Bitcoin has been a popular choice for this task. But as the blockchain and cryptocurrency market grows and expands, we’re increasingly seeing new platforms, like Stellar Lumens, that could be much better suited to this job.

First, let’s take a look at why Bitcoin has become such a popular way of sending money abroad.

Bitcoin for remittances

In the past, people who wanted to send money abroad had to rely on centralized systems like banks, Western Union, and more recently services like PayPal.

While these methods worked, they also presented quite a few problems. They tend to charge large fees for cross-border payments, along with high rates for currency conversion. The average cost of a global remittance is about 7.09% of the total amount.

These methods also take time. On average, sending money overseas this way takes about three to five days to complete. That’s without even mentioning the security and bureaucratic issues involved in sending money across multiple jurisdictions, often to complete strangers.

In developing countries with unstable banking systems and problems like inflation, there are yet more reasons not to trust banks and local currencies.

Cryptocurrency (and usually Bitcoin due to its high status) provided a great solution to many of these issues. It removes many of the fees associated with international payments, and there’s no need to worry about currency conversions. It’s a decentralized, global system, which removes many of the hurdles involved with other methods and can vastly cut down on transaction times.

In places like Venezuela and Zimbabwe, Bitcoin has been a much-needed way to store, send, and receive money without relying on banks on the verge of collapse or highly volatile currency. For the two billion unbanked people in the world, Bitcoin has been a gift.

But it’s not perfect

While Bitcoin has done an admirable job of rising to the occasion, it isn’t perfect. Increasingly, users have complained about high transaction costs and long waits for transactions to complete. Fees fluctuate a lot and can be as high as $50, which means small transactions would make no sense.

At busy times transactions can take days, which puts Bitcoin on par with banks.

There’s no need to be too harsh on Bitcoin over this. Bitcoin works as a currency, but it isn’t designed specifically to handle overseas payments and remittances.

It’s paved the way for new platforms which specialize in this job and can offer more streamlined services, better adapted to the task at hand.

Stellar Lumens

Stellar is a blockchain based platform for sending money overseas, and it could be the answer to a lot of the problems Bitcoin users are experiencing.

It’s a global, decentralized network which allows fast, cheap, and secure transactions to take place across international borders. Stellar lets users make cryptographically secure payments which get around many of the risks involved in using more traditional methods. Stellar can process payments in seconds, which puts it ahead of existing platforms.

It’s also well-suited to micropayments —small amounts of money which can be a nightmare with centralized platforms that require minimum fees (which can be larger than the payment itself). This makes it a good choice for small purchases or emergency payments to family abroad.

The Stellar price is currently ranging around$0.42 to $0.48 and looks set to rise fast. With big ICOs using the Stellar blockchaininstead of Ethereum’s, the profile of the platform will surely grow.

Stellar marks a new approach to using cryptocurrency in global remittances. While Bitcoin has proven itself to be a reliable way of sending money abroad - and certainly better than banking systems – it’s a multi-purpose currency that doesn’t specialize in international payments.

That’s where Stellar comes into its own. It’s built for global transfers, freeing it from any competing interests or goals. As more and more people around the world turn to cryptocurrency as a safe and efficient way of sending money abroad, platforms like Stellar could be on course to replace Bitcoin as the top choice for this.

By Boris Dzhingarov

© 2018 Copyright Boris Dzhingarov - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules