Stellar

Stellar (XLM) is a decentralized peer-to-peer (P2P) network that was established in 2014 by the Stellar Development Foundation, also known as Stellar.org. The network made its official debut in 2015 with the aim of bridging the gap between the world's financial infrastructures and providing a protocol for payment providers and financial institutions. Its platform is designed to facilitate the swift and reliable transfer of financial assets at a minimal cost. By bringing together individuals, banks, and payment processors, Stellar enables users to create, send, and trade various cryptocurrencies.

At the heart of the network is its native cryptocurrency—XLM, or Lumens. This digital currency serves as an intermediary for transactions and is used to cover transaction fees. The protocol swiftly converts funds by first changing them into XLM and then into the desired currency.

The Stellar payment system is grounded in distributed ledger technology, which is an open-source, community-driven development. This digital asset of the Stellar platform aids in cross-border transactions by addressing issues related to high fees and sluggish processing times. XLM primarily assists individuals in transferring money rather than targeting institutions. Stellar thus provides access to financial systems, allowing people to send funds globally at low costs and with speed.

Further, Stellar doubles as a decentralized exchange and marketplace, offering a built-in order book that tracks the ownership of Stellar assets. Users of the platform can manage buy and sell orders, and choose preferred assets for settlements. The XLM coin is embedded in the network to minimize transaction fees.

Stellar maintains a robust level of security. To be active on the network, XLM holders must possess at least one token. This requirement supports the network's efficiency, ensuring transactions are processed with minimal time investment. Moreover, Lumens help protect against denial-of-service attacks by making microtransactions too costly for hackers, safeguarding the Stellar Network from serious threats.

Stellar targets individuals in developing nations, offering ordinary users access to the global economy through quick, straightforward, and cost-effective transactions. The network heavily utilizes Lumens to facilitate live conversions and send money in different currencies; funds are sent from one party and delivered to the recipient in a different currency. This is especially useful when transactions occur between currencies without widely traded pairs.

Multi-currency transaction support is another competitive edge for Stellar, with its cross-currency capabilities enhancing foreign operations. Additionally, users benefit from stable transaction speeds and low costs.

Powered by a development known as Anchors, which act as bridges between currencies and the network, the exchange within the network is simplified, expediting the entire process.

In summary, the advantages of Stellar (XLM) are:

Jed McCaleb started Stellar with lawyer Joyce Kim after parting ways with Ripple in 2013 due to differing views on the company's direction. This was considered crucial for driving the wider adoption of the technology.

McCaleb's vision is for Stellar to provide individuals with a user-friendly means of converting fiat money into cryptocurrency, thereby removing the usual hurdles faced when transferring funds internationally.

Currently, McCaleb serves as the Chief Technology Officer (CTO) of Stellar and co-founded the Stellar Development Foundation. This nonprofit organization is dedicated to unlocking global economic potential by making money more fluid, markets more accessible, and people more empowered.

Fees are a significant concern for many, and high costs aren't limited to fiat-based payment systems like PayPal; blockchains like Bitcoin and Ethereum have also seen transaction fees soar due to congestion.

Stellar distinguishes itself by offering transactions at a mere 0.00001 XLM. Given that each unit of this cryptocurrency costs only a few cents at the time of writing, this ensures that users retain more of their funds.

Very few blockchain projects have successfully partnered with major technology and fintech brands. A few years back, Stellar collaborated with IBM to introduce World Wire, a project enabling large financial institutions to process transactions on the Stellar network and use bridge assets such as stablecoins.

While other blockchains have community funds for supporting ecosystem-enhancing projects, Stellar uniquely allows its users to vote on which initiatives should receive this backing.

Initially, 100 billion XLM coins were issued when the Stellar network launched in 2015. However, since then, there have been changes. Currently, the total supply is 50 billion XLM, with 20.7 billion in circulation.

In 2019, the Stellar Development Foundation declared it would burn more than half of the cryptocurrency's supply, now controlling approximately 30 billion XLM. A portion of these funds is allocated for marketing and organizational development, with about one-third set aside for investments in other blockchain projects.

The foundation explained this drastic action by stating: "SDF can operate more efficiently and fulfill its mission using fewer lumens... Those 55.5 billion lumens weren’t contributing to Stellar's adoption." They also assured that no further XLM would be burned in the future.

The Stellar network relies on the Stellar Consensus Protocol (SCP) for security, which is characterized by four key attributes: "Decentralized control, low latency, flexible trust, and asymptotic security."

SCP allows anyone to participate in consensus-building, preventing any single entity from gaining majority control. Transactions are confirmed quickly and at a low cost, with protective measures in place to deter malicious entities from infiltrating the network.

Stellar can be purchased from a variety of leading exchanges, including Binance, Coinbase, Kraken, Bittrex, Bitfinex, Upbit, and Huobi. It's also common to first convert fiat into Bitcoin before buying altcoins, and our guide provides more information on this process.