Stellar Development Foundation Developed Stellar cryptocurrency in 2017. Jed McCaleb, the founder of Ripple, created Stellar Lumens (XLM). Every cryptocurrency and blockchain platform on the market is trying to increase the speed, scalability and reduce the cost of transactions; Lumens is a blockchain platform trying to do the same thing. Suppose you want to look for an opportunity to diversify your holdings away from Bitcoin. In that case, Lumens is an excellent choice for you. Stellar gathered a lot of attention over the years and is now one of the leading cryptocurrencies on the market. This article will talk about everything you need to know about this cryptocurrency.
What is Stellar?
Stellar Lumens is an open-source payment technology based on blockchain that connects payment systems, banks, and people to facilitate low-cost transactions. Jed McCaleb, the co-founder of Ripple, created this system; Lumens shares some similarities with Ripple.
Ripple is a payment technology that reduces the cost of transactions and connects financial institutions. According to the Stellar Lumens website, Lumens aims to move money quickly, reliably, and at almost no cost. The system governance cryptocurrency is called Lumens. You can trade Lumens under the symbol XML on different cryptocurrency exchanges. The total supply of XML is 50 billion. The entire collection of XML was originally 100 Billion, but the foundation burned half of it in 2019.
Differences between Ripple and Stellar Lumens
Ripple is a closed system, while Stellar is an open-source network. Financial institutions and consortiums are the main customers of the Ripple network. The customer, in this case, uses Ripple for their cross-border transfers.
On the other hand, Lumens try to develop and market with different use cases such as money remittance and bank loans.
How Does Stellar Work?
Like any other cryptocurrency, Stellar is a digital or virtual currency perfect for trading on a centralized network or blockchains. Blockchains are secure and do not allow any counterfeit and being double-spent.
After Satoshi Nakamoto created Bitcoin in 2009, many cryptocurrencies popped up. Central banks do not issue cryptocurrencies, so the government cannot interfere in crypto trading activity.
The developers update the Stellar blockchain every 2 to 5 seconds. There are several differences between this cryptocurrency and Bitcoin. Lumens’ consensus mechanism does not depend on a network of minors for verifying transactions. The Stellar uses Federated Byzantine Agreement (FBA) algorithm to facilitate transactions. In this sense, just a portion of the network validates a transaction.
History of Stellar
Jed McCaleb founded a non-profit organization called Stellar Development Foundation. The foundation created Stellar.
Organizations like BlackRock, Google, FastForward, and payments startup Stripe Provide initial funding.
What Are the Features of Stellar Blockchain?
Now we know a little more about this cryptocurrency, it is time to look at the features that matter the most in this blockchain. One of the essential features of the Stellar blockchain is being a decentralized and open-source network. We have talked about how it fascinates transactions; it is good to know that the transaction confirmation time in this blockchain is 3-5 seconds. It can support thousands of transactions every second. It has provided multi-signature is a smart contract too. And more interestingly, Stellar has a 1% fixed annual inflation, which is remarkable.
Stellar aims to develop economies in regions of remittances and bank loans for people who don’t have access to banking services. Institutions and individuals do not have to pay for using the system.
The Stellar network is a cross-border transfer and payment system that will reduce transaction cost significantly.