Stellar —— An Open Network For Storing And Moving Money
- Stellar is an open-source network with the mission to "create equitable access to the global financial system". Stellar is maintained by the Stellar Development Foundation, a non-profit organization established in 2014.
- Its goal is to build a global financial infrastructure that makes it easy to move traditional forms of money and access new markets. This goal is realized by faciliating transactions of digital representations of currencies (such as USD, EUR, BTC, etc) on a single ledger.
- Stellar uses the Stellar Consensus Protocol for achieving network consensus, which is based on Federated Byzantine Agreement. Stellar provides various Software Development Kits and APIs to make building on and using Stellar as accessible as possible.
- Stellar's token, the Lumen (XLM), is used for staking and constitutes the payment method for all services the system provides.
About XLM Stellar
Stellar Network is an open-source network with the mission to "create equitable access to the global financial system"，owned by the community and mainly used to facilitate cross-asset value transfer. Stellar Network aims to become an open financial system, allowing people of any income level to use low-cost financial services, even if users only have a penny to conduct transactions.
The native digital currency of Stellar Network is called Stellar or Lumens (XLM). Every Stellar account must hold a small amount XLM to prevent spam from the Stellar payment system. By using XLM, users can send any currency they own to others in different currencies. Stellar Network also supports smart contracts.
The Stellar network has the same function as the Ripple payment network. It can transfer any currency, including USD, Euro, RMB, JPY or Bitcoin, which is simple and fast. It relies on Bitcoin blockchain technology. Connect 180 currencies in the world within 2-5 seconds, connect banks, payment systems and the general public, and reduce transaction costs and time delays caused by cross-border payments. The largest partner of Stellar Network is IBM. They signed a cooperation agreement in October 2017 to jointly establish multiple currency channels to enhance the convenience of payment in the South Pacific.
Stellar's Consensus Protocol (SCP)
Stellar's public white paper (written by Professor David Mazières) details the working principle of the Stellar Consensus Protocol (SCP). The white paper was listed on Google Scholar and was cited 39 times at the time of writing this blog post. The paper is highly technical, and contains detailed mathematical proofs of the correctness of the Federated Byzantine Agreement (FBA) consensus model.
Stellar Network was co-founded in 2014 by former lawyers, Joyce Kim and Jed McCaleb. Jed McCaleb is also the founder of Mt. Gox Exchange and the co-founder of Ripple. He also participated in the founding of Mt.Gox, established Ripple, and then left to create Stellar. In addition, he is also the world's first founder of eDonkey’s P2P sharing software.
Joyce Kim is the co-founder and managing partner of SparkChain Capital, a member of LiteracyBridge's board of directors, and co-founded Stellar. She also serves as the lead researcher of the MIT Media Lab. Before joining Stellar, she had done venture capital investment at Freestyle Capital.
Stellar Network also received support from the Stellar Development Foundation (SDF). The Foundation is a non-profit organization responsible for assisting in maintaining the Stellar network code base and providing support to the Stellar community.
Core Technical Characteristics
- Anchor, trust and credit: An anchor is simply an entity that people trust, used to hold their deposits and send credit points to the Stellar network based on these deposits. They act as a bridge between different currencies and the Stellar network. All currency transactions on the Stellar network (except lumens' built-in digital currency) take place in the form of credit points issued by anchor points.
- Distributed exchange: Stellar ledger can store people's offer to buy or sell currency. A quotation is a public promise to exchange another type of credit for the booked price. The ledger becomes a quote in the global market. Let people trade currencies in foreign exchange, and at the same time can seamlessly exchange currencies during transactions.
- Multi-currency transactions: Stellar allows you to send all currencies you hold to anyone else in different currency types through the built-in distributed exchange, and people can receive any currency through the anchors they add.
The difference between Stellar and Ripple
Stellar is trying to build a more excellent distributed payment system that can absorb the advantages of Bitcoin and Ripple. it is worth noting that Stellar was originally based on the Ripple Labs protocol. The blockchain was created as a result of hard fork, and the code was subsequently rewritten. Like Ripple, Stellar is also a payment technology designed to connect financial institutions and greatly reduce the cost and time of cross-border transfers.
The difference between the two is:
- Ripple focuses on banking, while Stellar focuses on providing banking services for people who do not have a bank account.
- The designed total amount of mining XLM is 100 billion, which is the same as the total amount of Ripple. However, the mining volume of Stellar coin is not gradually decreasing, but increasing by 1% every year.
- In the Stellar payment network, users use Stellar as the base currency, and can transfer any currency through XLM, including US dollars, RMB, Euro, Japanese yen, or Bitcoin, etc.