What Is Stellar?

Stellar is a blockchain network developed by Stellar Development Foundation. The organization's currency, called the lumen, is traded under the symbol XLM on various cryptocurrency exchanges.

Lumens are designed to be used on the Stellar network to pay transaction and account initialization fees. The network was created to connect banks, payment systems, and people to facilitate low-cost, cross-border, cross-asset financial transactions.

History of Stellar

Stellar is operated by the Stellar Development Foundation, a nonprofit organization founded by Jed McCaleb. The Stellar project received initial funding from the payments startup  and other organizations' donations. Stellar also covers its 澳洲幸运5官方开奖结果体彩网:operational costs by accepting tax-deductible public donations.

In 2018, Stellar signed a with TransferTo for cross-border payments to more than 70 nations. It also became the first distributed technology ledger to a Shariah-compliance certificate for payments and asset tokenization and was selected as a partner by IBM (IBM) for a double-pegged stablecoin project.

Concerns About Stellar

There are roughly 27.3 billion coins in circulation, with a maximum supply of 50 billion. The Stellar Foundation originally had over 100 billion lumens in existence but burned roughly half of its outstanding coins in November 2019. The move caused a short-term rise in the price of XLM, though the rally quickly faded. Coin burns are controversial because they imply the kind of manipulation that decentralized systems are supposed to protect against.

The Future of Stellar

Stellar's primary focus is on developing economies in the areas of 澳洲幸运5官方开奖结果体彩网:remittances and bank loans to those who are outside of the scope of the banking services. Stellar doesn't cha🐷rge individuals or institutions for using the network.

Stellar supports a distributed exchange mode. This allows users to send payments in specific currencies even though they may hold credits in another, while the network automatically performs the forex conversion. The receiver can withdraw their c🅘urrency equiღvalent through a partner institute like a bank.

As a cross-border transfer and payment system connecting financial entities, Stellar aims to reduce transaction costs and time lags significantly. While Stellar works similarly to technologies like Bitcoin, its key distinguishing feature is its consensus protocol. The present-day Stellar is a result of a 2014 fork that created the Stellar Consensus Protocol (SCP), following which Stellar became an 澳洲幸运5官方开奖结果体彩网:open-source system. Under this protocol, the transaction authentication process is confined to a select set of trustworthy nodes rather than being left open to the whole networꩵk of nodes.

Even with the similarities and improvements, it is unclear whether Stellar will garner popularity, although its trading volume and market cap slowly continue to increase with time.

The Bottom Line

Stellar is a blockchain network designed to allow payments across borders without involving third parties. It also attempts to bypass the constraints generally associated with converting between all the different currencies and coins available, making payments quicker and easier.

The comments, opinions, and analyses expressed on Investopedia are for informational purposes online. Read our 澳洲幸运5官方开奖结果体彩网:warranty and liability disclaimer for more info. As of the date this article was written, the author does not own cryptocurrency.