What is Stellar Lumens(XLM)?

The Stellar project is similar to Ripple as a payment network. This is intended to enable international and interbank payments quickly and cost-effectively. Stellar is particularly strong at transactions between different currencies.

Stellar’s protocol and code are open source. The development is driven by the Stellar Development Foundation, which is a registered nonprofit organization.

Story of Stellar


Stellar was founded in early 2014 by Jed McCaleb and Joyce Kim. At first, Stellar was based on the ripple protocol. But after some critical spots in the code were changed, Hard Fork came and Stellar broke away from Ripple. Then it came to the discussion between the Stellar co-founder Joyce Kim and the ripple CTO Stefan Thomas if there were actually weak points in the Ripple Code acted.


Stellar was founded in early 2014 by Jed McCaleb and Joyce Kim. At first, Stellar was based on the ripple protocol. But after some critical spots in the code were changed, Hard Fork came and Stellar broke away from Ripple. Then it came to the discussion between the Stellar co-founder Joyce Kim and the ripple CTO Stefan Thomas if there were actually weak points in the Ripple Code acted.

Stellar then went their own way and wrote the code completely new. Stellar’s new code and planned development paper was finally released in April 2015. The Stellar Network went live half a year later, in November 2015.

Technology behind Stellar


The Stellar network is made up of many trusted servers that all continue and align Stellar Ledger. Stellar Ledger displays all transactions and account balances.

For example, if a user sends $ 10 to a friend, the majority of servers must agree that the transaction is valid. This usually happens within 2-5 seconds. After that, the transaction is already over and the friend can freely dispose of the $ 10. The great thing about Stellar is that the friend could have received the $ 10 as a euro or any other currency.

Since the confirmation of transactions via the synchronization of the servers works (consensus), Mining is not necessary for Stellar.

Anchor


Are the objects in the Stellar network, to which the users entrust their credit. These are necessary to allow trading between different currencies. In principle, the anchors manage the credit and debit of individual users. The user must trust them that his credit will not be lost if he gives it to the anchors. Because the credits are with the anchors transactions are much faster possible than if balances would be at different banks.

Since the complete block chain is public, all exchange rates are visible. However, the Stellar protocol always uses the best possible exchange rate for the user.

Lumen


This is what the cryptocurrency is called in the stellar network. It is abbreviated as XLM. At the beginning of Stellar, in 2014, the lumens were still called Stellars. Only when they separated from Ripple were they renamed Lumens, in 2015. In total, there can be a maximum of 100 billion lumens. At present, however, just over 7 billion are in circulation. Every year, as inflation, 1% new lumens are added to the network.

Lumens become necessary when a direct currency transaction is not possible. For example, if a user sends Mexican pesos and wants to receive them in euros. Then the Stellar network can use Lumens to first convert the Mexican pesos into lumens and then in euros.

In addition, transactions in the Stellar network are very cheap. For example, 600,000 transactions in the Stellar network cost only about $ 0.01. As a result, micro payments are possible. The transaction fees in the network are mainly there to prevent spam.

Stellar and IBM


The Stellar Lumens course made a big leap on October 16, 2017, when it became known that Stellar will be working with IBM and KlickEx in the future. The aim of the partnership is to develop a blockchain-based system for financial institutions that can use it to transfer money between themselves. At the core of this project is the already functioning Stellar technology.

Currently, Stellar can handle more than 1,000 transactions per second and has the potential to handle 1 billion accounts.

Collaboration with IBM and KlickEx is a big step forward for Stellar, as it brings technology into finance.

Original Website of Stellar Lumens

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