Stellar
Stellar is a platform created to make it faster, easier, and more affordable for users to transfer assets around the world. Designed to connect banks, payment systems, and individuals, Stellar allows you to"transfer money across borders quickly, reliably, and with pen parts." Financial transactions are usually done between two and five seconds, with thousands of transactions being processed every second. In short, it seeks to make cross-border payments faster, cheaper, and more secure than using current banks and money transfer systems.
Its native coin is Lumen (XLM). The native Stellar token, Lumens (XLM), is used to enable this cross-border sale of both tokens and money. In this way, Stellar shares a similar Ripple XRP Ledger (and its cryptocurrency XRP), which also aims to provide a protocol for payment providers and financial institutions.
]Stellar is run by the Stellar Development Foundation (SDF), a non-profit organization founded by Jed McCaleb and others. The Stellar project also received initial funding from a number of financial institutions and payment companies. Stellar Lumens was launched in 2014.
McCaleb also founded the now-defunct Bitcoin, Mt. Gox, and designed the Ripple (XRP) Ledger, another global payment method for financial institutions. Other contributors to the XLM ecosystem include David Mazieres, creator of the Stellar consensus protocol; Denelle Dixon, Executive Director and CEO of SDF; Joyce Kim, founder of Stellar and former CEO of SDF.
The reason to build the Stellar project was to focus on the use of international currency in payments, exports, and other forms of exchange. In today's climate, for the most part, the payment system is highly fragmented. Different regions of the country have their own payment systems. Stellar, on the other hand, has created a system in which global currencies can be represented in the form of digital fiat tokens in a decentralized ledger where they can be freely used. The new Stellar approach has helped pave the way for a number of important partnerships with businesses around the world, enabling the network to grow.
Like most cryptocurrencies, XLM uses blockchain-based technology, so transactions on the Stellar network are stored in a distributed public ledger, which can be accessed by anyone worldwide. The consensus in that shared public ledger is that Stellar differs from many other cryptocurrencies, such as Bitcoin. Bitcoin uses what is probably the most popular way to reach a blockchain agreement, called proof of work (PoW).
But the Stellar network takes a different approach, by distributing the consensus function across smaller networks - called the Stellar Consensus Protocol (SCP). Each Stellar network participant, or location, selects other trusted participants. And the consensus of the functions of each mini-network of the entire Stellar network. Relying on mini-networks instead of mining, the Stellar consensus approach has a shorter approval or verification cycle, leading to less expensive transactions.
XLM is used as an exchange method within the Stellar network.XLM is also used to pay transaction fees to stop spam senders from closing a letter. Every account on the Stellar network mostly holds a minimum of 1 XLM to ensure authenticity. XLM also acts as a bridge currency within the Stellar Distributed Exchange, using its environment as the only asset in the Stellar network that does not require an anchor, allowing it to be integrated with any other asset to generate revenue.
DATE | NEWS/EVENTS | IMPACT |
07/05/2022 | TerraUSD and LUNA both collapsed, and as a result, a number of crypto platforms folded in the aftermath | -23% Decrease |
18/05/2021 | China prohibits financial and payment institutions from offering cryptocurrency services | -42% Decrease |
21/01/2018 | Stripe an online payment company says that it may add support for Stellar in the future | +35% Increase |
Stellar Lumens (XLM) is a Ripple (XRP) digital currency, both developed by Jed McCaleb, and both focus on making global payments more efficient and affordable. That being said, Stellar Lumens aims to help individuals transfer money, instead of institutions - especially to overcome long-term transactions and the high cost of cross-border operations.
Given the collaboration of the Stellar Lumens platform seen with companies like IBM, their goal seems to have gained some follow-up, and the network has continued to grow. But the XLM coin itself seems limited in its role as a traditional payment method on the Stellar network. Lumens themselves have not yet received widespread acceptance in the crypto market or in cryptocurrencies.
However, many people have come to realize that the Stellar platform has the potential to grow as it effectively addresses the unmet need for affordable payment options, especially in densely populated regions without banks.
