Stellar XLM, also known simply as Stellar, is a decentralized blockchain-based platform that aims to facilitate fast, low-cost cross-border transactions and connect financial institutions worldwide. Launched in 2014 by Jed McCaleb, the co-founder of Ripple, Stellar was initially designed as a payment network for both individuals and organizations. However, its capabilities have since expanded to supporting smart contracts and decentralized applications (dApps) as well.
One of the key features that sets Stellar apart is its consensus algorithm called the Stellar Consensus Protocol (SCP). Unlike traditional cryptocurrencies that rely on energy-intensive mining processes, SCP utilizes a federated Byzantine agreement model, making it more energy-efficient and scalable. This algorithm enables fast and secure transactions, with Stellar being able to process around 3,000 transactions per second (TPS) and settling them within 3-5 seconds, making it an attractive option for businesses and financial institutions.
Another distinguishing factor of Stellar is its focus on financial inclusion. The platform’s main goal is to provide affordable and accessible financial services to individuals who are unbanked or underbanked. By using Stellar, individuals and businesses can send and receive payments in various currencies through the platform’s decentralized exchange. This means that Stellar serves as a bridge between different currencies, making it easier and cheaper for users to convert their assets into other forms of value.
Stellar operates using its native cryptocurrency called Lumens (XLM). Lumens were initially called Stellars but were later renamed to avoid confusion with Stellars, the network’s units of digital currency. There is a total supply of 50 billion Lumens, which were pre-mined during the platform’s creation. While Lumens play a crucial role in the Stellar network’s functionality, they are not designed as a store of value or speculative asset like Bitcoin or Ethereum. Instead, XLM’s primary purpose is to facilitate transactions and ensure the network’s security.
Stellar has achieved notable partnerships and integrations over the years, further solidifying its position in the cryptocurrency space. One of its most significant collaborations is with IBM, as Stellar is used as the backbone for IBM’s blockchain-powered cross-border payment system known as World Wire. This partnership allows financial institutions to send money across borders in a secure, immediate, and cost-effective way. Additionally, Stellar has partnered with high-profile organizations such as Deloitte and Stripe, expanding its reach and credibility in the financial industry.
Furthermore, Stellar is actively involved in supporting the development of decentralized applications (dApps) through its Stellar Development Foundation (SDF). The SDF funds and fosters innovative projects on the Stellar network, ensuring the growth of the platform’s ecosystem. This commitment to fostering innovation has attracted various projects to build on Stellar, ranging from remittance services to tokenized assets and stablecoins.
In conclusion, Stellar XLM is a decentralized blockchain platform that offers fast and low-cost cross-border transactions, smart contracts, and decentralized applications. Its consensus algorithm, Stellar Consensus Protocol (SCP), ensures secure and scalable operations, while its focus on financial inclusion makes it an attractive choice for individuals and businesses alike. Lumens (XLM) serve as the native cryptocurrency, enabling transactions and network security. With strategic partnerships and a commitment to supporting dApp development, Stellar continues to solidify its position in the cryptocurrency landscape.