Why we have chosen Stellar Lumens (XLM) as our platform currency
We wanted to build a platform which could further the promise of cryptocurrencies to enable easy value transfer using internet in the same way as information transfer/sharing over internet is today.
After the last boom and bust cycle, we knew that the next phase of cryptocurrency growth could only be fuelled by increasing cryptocurrency adoption through larger user base. But we realized that it’s still a difficult process for a normal user to mine cryptocurrency or a risky alternative to buy cryptocurrency because of its high volatility.
Instead of the two above options, if new users can enter cryptocurrency ecosystem by “earning” their first cryptocurrencies, we felt it would be most impactful in increasing cryptocurrency adoption and at the same time, get new users to realize the potential of cryptocurrencies.
Now, for the “Masmic” platform that we wanted to built, we knew from the outset that it would require a native digital asset/currency to facilitate frictionless value transfer amongst our user base.
However, to choose the right digital currency/asset to power our platform, we recognized three factors were critically important to us:
i) Micro-payments such that extremely low value transfers can also take place between two users on our platform.
In Web 2.0 that we currently use, there’s a minimum transaction cost of $0.04, so any value transfer below this value would not be economically feasible. But we needed something where even a transaction of $0.0001 becomes possible. This would be a revolutionary paradigm shift as it’s only the advent of cryptocurrencies which would have made this possible.
ii) The transactions should be confirmed without any need for a closed financial system and in minimum time possible.
iii) Settlements should take place automatically and to the user private wallet directly, giving highest autonomy to users to control their funds.
Hence, a digital native currency which has high TPS (transactions per second), very low transaction cost and also has smart contract capability for auto-settlement would have been most suitable for us.
These factors are so important that our product name “Masmic” is also an acronym of these factors — M stands for Micro-payments, AS stands for Auto-settlement, MI stands for monetary incentive and C stands for Cryptonomics.
Stellar Lumens is the only cryptocurrency which fulfilled all these requirements. With TPS of 1000, extremely low transaction cost of 0.00001 XLM (XLM is currently priced at around $0.25) and smart contract capabilities, XLM became our natural choice.
Although we knew that XLM currently has less network effects as compared to Bitcoin and Ethereum, but we expect it to grow much higher in future because of its superiority for building micro-payment based applications and the way Stellar Foundation is promoting developers to build on the Stellar platform.
We will launch the platform very soon and for the initial 1 month, only email subscribers will get exclusive access to the platform.