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Stellar Lumens [XLM]: Payments depend really heavily on network effects, says Jed McCaleb




Stellar Lumen [XLM]s Jed McCaleb says "payments depends really heavily on network effects"
Source: Unsplash

Stellar Lumens [XLM], the eighth largest cryptocurrency by market cap, and, has made headlines over the past couple of days.

Additionally, the cryptocurrency is going to be used for cross-border, near-instant transactions as part of the IBM Blockchain World Wire. The payments solution is going to be used in more than 50 countries, with the support of the Stellar protocol.

Jed McCaleb, the CTO of and Jesse Lund, the Head of Blockchain and Digital Currencies at IBM, spoke about cryptocurrency enabling financial inclusion, during the Money 20/20 conference. They also spoke about the progress cryptocurrencies have made in the payments sector.

Jesse Lund spoke about how this new step would have a positive impact in terms of financial inclusion, and how it would help banks and money transmitters make faster and cheaper transactions. Lund stated that digital currencies would definitely have a positive impact on financial inclusion, adding that it is one of their focus areas.

He further stated that there are around 2 billion adults across the globe, with no access to financial services or bank accounts. However, over a billion have access to smartphones capable of storing digital value, he added. Jesse Lund said,

“That’s the whole point. I mean we can actually bring money further and farther than it could ever go before even if there’s not you know a tangible banking presence in some of these emerging economies.”

He further stated that this factor is the reason for the growth of the payments industry. He added,

“It’s not just taking revenue or market share away from somebody else some of the incumbents. There’s actually new business being born because there’s 2 billion people in the world that can now be part of this global financial economy”

This was followed by Jed McCaleb speaking about the progress of cryptocurrency adoption in the payments industry. McCaleb stated that several people in the cryptocurrency space “underestimated” the time it would take for cryptocurrency adoption in payments, adding that he has been working in this sector for over eight years now.

“[…] the reason why is that payments depends really heavily on network effects and that’s just not there yet and and the only way that it can kind of be achieved is by bringing like a consortium like a whole group of people together that are willing to adopt one common thing at the same time and that’s exactly what World Wire is doing or so I think”

This was followed by McCaleb stating that even though there has not been much progress, there is a lot of interest for such an endeavour.

“So being able to bring them all at once we should see like the snowballing effect and things really got get rolling now so I’m not that interested in the last six months but the next six months in the next year is things where things are going to really start to heat up”

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Priya is a full-time member of the reporting team at AMBCrypto. She is a finance major with one year of writing experience. She has not held any value in Bitcoin or other currencies.


Bitcoin will likely be valued at $100,000 with a market cap of over $2 trillion before the end of 2021





Bitcoin [BTC] will likely reach $100,000 with a market cap of over $2 trillion before the end of 2021
Source: Unsplash

The entire cryptocurrency market seems to be on the brighter side of the market since the beginning of the year. A majority of the coins have recorded significant recoveries from their 2018 slump, a period during which most coins lost over 90 percent of their value, when compared to their all-time highs. Among all the coins in the market, Bitcoin [BTC] aka the digital gold, was noted to be making a massive comeback as the coin breached the $11,000 mark after nearly 15 months. The coin however, soon retracted to settle below the $11,000 level.

According to CoinMarketCap, at press time, Bitcoin was trading at $10,887.27 with a market cap of $93.549 billion. The coin recorded a 24-hour trading volume of $20.757 billion for the past 24 hours and saw a massive rise of over 17 percent over the past seven days.

Anthony Pompliano, Co-founder of Morgan Creek Digital Assets, predicted that the largest digital currency could rise to reach $100,000, before the end of 2021. Pomp added that he was around 70-75 percent confident in this prediction. He stated,

“As I have previously said, making predictions is difficult […] Part of my process as a professional money manager is forming a thesis (price target), identifying a timeline (date), and establishing a confidence level. And then constantly re-evaluating those three aspects of my thought process as I receive new information.”

Pomp however, listed six pointers that have to be understood beforehand. First, this prediction is not an investment advice, and people should do their own research before investing in the digital currency. The second is with respect to Bitcoin’s volatility, with Pomp remarking that since it was a highly volatile market, the coin could witness a significant fall before being valued at $100,000. He stated,

“I anticipate that there will be numerous 20-30% drawdowns from new all-time highs as the asset continues to appreciate in value. These mini-boom/bust cycles should not cause panic, but rather need to be understood as natural market dynamics whenever an asset gains significant value in short periods of time.”

Further, the partner of the investment firm stated that the rise would be driven by several catalysts. This includes institutional adoption, exchange-traded funds and retail product approvals, global instability, governments all across the globe manipulating currencies, markets and economy. He went on to state,

“The market cap of Bitcoin will reach $2+ trillion when Bitcoin is worth $100,000. This is less than 1/3 the market cap of gold and less than 1/40 the global money supply.”

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