Table of Contents
The History of Stellar Lumens
Stellar Lumens is an open-sourced distributed payment system that uses a currency called Lumen (XLM) to pay for transactions. Overall, Stellar is a fast, secure, reliable, and inexpensive platform. Thanks to these features, Stellar quickly became one of the top 10 coins on Coinmarketcap. The developers behind Stellar aim to grow this platform to become a worldwide financial network that is open to anyone. On top of that, they created the platform to allow the transference of different cryptocurrencies.
Stellar Lumens was created from a forked version of Ripple in 2014. Former founder of Mt. Gox and co-founder of Ripple, Jed McCaleb, started working on the Stellar open-source protocol in early 2014. In the same year, the team changed the name of their coin from Stellar to Lumens (XLM).
The Stellar Consensus Protocol (SCP)
The organization originally based its payment network on the Ripple protocol, which was developed some years earlier by Jed McCaleb. In 2015 they adopted an improved version called the Stellar Consensus Protocol (SCP). SCP is the first functional and safe development that uses FBA.
Stellar has recently announced several changes regarding the overall branding of the currency and its logo. The cartoon rocket ship didn’t seem like a suitable logo for a network used by banks and large institutions. The team searched for a more versatile logo that would look better on different platforms. Thus, they created a simple circular design with two lines going through it. They decided to use the new logo as the currency symbol. Besides a different logo, the team decided to associate a different color palette with the network.
What Is FBA?
Stellar Lumens is the first cryptocurrency that successfully implemented the FBA agreement. FBA stands for Federated Byzantine Agreement, which is a form of blockchain agreement where each byzantine is responsible for their own blockchain. This type of agreement is used to enable low transaction costs and network scalability. The agreement requires each node to be verified even before the users request any action.
In that same year that Stellar Lumens was founded (2014), the team started looking for partnerships. Some of their newfound partners at the time include Deloitte and IBM. After forming the partnership, IBM launched a blockchain based payment system called Blockchain World Wire. The payment network uses the Stellar blockchain.
Integration with Blockchain World Wide
Using blockchain technology and the Stellar protocol, IBM Blockchain World Wire makes it possible for financial institutions to settle cross-border payments in seconds. The cross-border payment system developed by IBM includes partnerships with many large banks such as Deloitte.
Specifications of Stellar Lumens
|Date of Release||31 July 2014|
|Consensus mechanism||Federated Byzantine Agreement|
|Hashing Algorithm||Stellar Consensus Algorithm|
|Average Block Time||n/a|
|Mining / Staking reward||n/a|
|Next Block Halving||n/a|
The Price of Stellar Lumens
Unique Aspects of Stellar Lumens
One of the major purposes behind Stellar is to help improve development processes in large corporations and even countries. For example, the problem in developing countries is trusting the banks. With a digital system, trust is not necessary. These digital systems are not biased or prone to malicious use.
The security of a digital system is guaranteed by an underlying system which looks for trusted nodes (Quorum). It can guarantee that all participants can reach consensus and that there are no bad actors. Another example how a digital system can benefit users lies in accessibility.
Solving the Issue of Accessibility
Certain banks are not accessible in some regions, which can cause issues to individuals and corporations. However, this digital currency can be accessed from anywhere in the world and at any moment. Beyond this, the Stellar’s original goal was to make international transactions as easy and accessible as possible.
How Stellar Accomplishes Its Goals
Stellar’s goals are achieved by ruling out the commonly used middle man such as payment processors like Western Union. You can now directly buy XLM with EUR and send them to another country. The XLM can be exchanged for the local currency in the country you send it to. This eliminates high fees and the long processing times of a regular bank transaction.
Why Use Stellar Lumens?
One of Stellar’s main goals is to provide financial services to the unbanked. With very rapid processing times and low fees, the network is suitable for people in any kind of circumstances. It allows participants to send funds within seconds without the need of a third party.
The Middle Man
The Stellar network is acting as the middle man between international currencies. It removes the need for trust by making Lumens an interchangeable currency. Furthermore, Stellar has partnerships with some of the most popular tech giants who have been working in this field for a long time.