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What is Stellar blockchain and XLM cryptocurrency?
The Stellar project founded in 2014 an American programmer and entrepreneur Jed McCaleb. At that time, he was known as the co -founder of the Edonkey2000 file hosting and the infamous MT crypto -tank.Gox, and then as a co -founder and technical director of Ripple. McCaleb was disappointed with a high level of centralization of the project, which focused on financial institutions, and therefore decided to launch its decentralized version with an emphasis on private electronic payments.
In July 2014, in San Francisco McCaleb, together with the professor of Stanford University, David Mazier, registered the Stellar Development Foundation (SDF) non-profit organization. Soon she received funding in the amount of $ 3 million from the American IT company Stripe, which develops the application for electronic transfers and payments.
Stellar blockchain began work in the fall of 2014. Initially, he was a clone of Ripple with the same code base. However, in the spring of 2015, SDF launched the updated Stellar blockchain on its own Stellar Consensus Protocol protocol developed by David Mazierre.
In May 2017, the STELLAR commercial division began to work – Lightyear.Io. In September 2018, it was acquired by Chain, and the United Company was called Interstellar. She is engaged in the creation and integration of solutions to increase the efficiency of international payments through the use of Stellar blockchain capabilities.
In 2019, Jedly McCaleba was replaced by Denell Dixon, who previously worked as the operating director of Mozilla Foundation, as the CEO of SDF.
How does Stellar blockchain work?
The basis of the Stellar network is Stellar Consensus Protocol (SCP), which its creator David Mazer called the first to be proved by a safe consensus mechanism. He uses the architecture of the “Federal System of Byzantine Agreements”: in the process of generating blocks and checking transactions, many equal computing units participate.
The procedure for achieving consensus and including approved transactions in new blocks in SCP consists of three stages:
- Nomination -Nodes put forward blocks-candidates for approval;
- Vote – The nodes vote for their own and other people’s candidates and, if the quorum is in the case of the quorum, a “ballot” is formed, allowing the inclusion of a new block in the blockchain;
- Time-out – This is a mechanism with the help of which nodes abandon the candidates by whom the quorum failed to gain, and repeat an attempt to vote.
There are three types of computing NODs in Stellar:
- Observer – sends transactions to the network;
- Validator – participates in the SCP voting process and confirms new blocks;
- Archives – keeps and constantly updates the blockchain register Stellar.
According to September 2022, the Stellar blockchain operates around the active 40 validator-ton. 3 of them belong to SDF, the rest – two dozens of organizations, including cryptocurrency exchanges on which the XLM coin is traded. This ensures decentralization and security of the network.
Thanks to the described architecture, the Stellar blockchain can process more than 1000 transactions per second with the average confirmation time of one transaction of less than 5 seconds.
How the stellar tokens is arranged?
During the launch of the Stellar network in 2014, about 100 billion XLM was created, and the inflation rate was set at 1% per year.
It was originally planned that Stellar Development Foundation will distribute more than 50% of the XLM emission among partners and private users over the next 10 years. To do this, they have developed an extensive program of cadlings for bitcoin holders, XRP coins and users of various blockchain services.
In particular, in 2018-2019. Coins Stellar Lumens for about $ 20-30 could receive each verified user of the Blockchain wallet.COM, as well as the Poloniex and Coinbase crypto -tank, having passed the project knowledge test.
However, the generous distribution of XLM negatively affected the market quotes of the asset. Therefore, in November 2019, the Stellar tokenomics was revised: SDF decided to burn more than 55% of the XLM issue and canceled the inflation issue of new coins.
As of September 2022, the total amount of supply is 50 billion XLM, more than 50% of the coins are already in free turnover.
What is the XLM cryptocurrency for and what are its features?
XLM coin in the Stellar ecosystem performs three main functions:
- Payment of commissions for transactions in the blockchain (0.00001 XLM for one operation);
- Management of the STELlar account (to activate the translation function, at least 1 XLM should be in the Stellar wallet);
- unit of exchange in the blockchain Stellar;
- Intermediate currency used to ensure the liquidity of any tokens released on the Stellar network.
Stellar Lumens cryptocurrency is traded on the largest centralized crypto -rhms (both in the spare section and in the form of futures). Its storage is supported by all popular multicellular wallets.
From the point of view of ordinary users, XLM translations are very fast and cheap, but not always convenient. For example, when sending cryptocurrencies to the addresses of centralized crypto -streaks and other castodial services, it is necessary to indicate a special note to MEMO in addition to the address. This is an additional digital or letter code that is generated in the wallet. Without it, the Stellar network will not process the translation.
At the beginning of 2019, the famous investment company Grayscale Investments, focused on investments in crypto acts, launched a trust fund, the basic asset of which was the Stellar Lumens coin. However, it is not popular: as of September 2022, the capitalization of a trust is only $ 7.7 million.
What crypto acts are produced in the Stellar blockchain?
Stellar blockchain allows you to quickly and cheaply, in just a few simple operations, create user tokens with given properties. Thanks to this, in 2018, the Stellar platform took second place after Ethereum in terms of the number of ICOs conducted.
Another important consequence of the simplicity of the emission of tokens was the possibility of tokenization of any real assets, for example, the emission of stabilcoins tied to different national currencies. Their free conversion is carried out using the “anchors” – trusted financial organizations that provide free exchange of national currencies for tokens and coins of XLM and vice versa. They can be considered as bridges between the traditional economy and the Stellar network.
One of the first features of the STELLAR network was the French payment blockchain service TEMPO, which in 2017 began to produce Euro Tempo Token (EURT), tied to euro.
In April 2019, the British online bank Wirex released 26 stablcoins tied to different national currencies in the Stellar blockchain with the possibility of instant conversion.
In February 2021, Circle began producing USDC stablecoin based on Stellar. Many major crypto -rhinas announced support for USDC translations in this network.
How Stellar is developing?
Unlike Ripple, Stellar was originally positioned as a scalable, fast and safe cryptocurrency for calculations between private individuals. To make XLM closer to private users and overcome the barrier between cryptocurrencies and fiat money, Stellar Development Foundation has concluded many partnerships with payment systems around the world, especially focusing on Africa, Asia and South America.
Here are only a few of the most interesting partnerships:
- In April 2015, SDF became a partner of the ORADIAN cloud banking service developer to integrate the ORADIAN STELLAR for servicing microfinance organizations in Nigeria.
- In 2016, Deloitte Corporation announced the integration of Stellar to create an application for cross -border payments Deloitte Digital Bank.
- In the fall of 2017, Stellar has concluded an affiliate agreement with IBM Corporation. The IBM Blockchain World Wire service was later presented, which allows financial institutions to make international payments in seconds.
- At the end of 2017, Stellar began to use the platform of non -cash money transfers SureRemit, located in Nigeria.
- In October 2021, Flutterwave payment company launched two new cash transfers between Europe and Africa using the Stellar network.
One of the main partners of Stellar is the service of international money transfers Moneygram, which has 350 thousand services in 200 countries. In the fall of 2021, the company began to use the Stellar blockchain for transactions by USDC stablecoins.
Thanks to the Stellar and MoneyGram cooperation in June 2022, Vibrant and Lobstr digital wallet users in several countries of the world, including Kenya, Canada, USA and the Philippines, the conversion of local cryptocurrency currencies appeared and back without the need to have a bank account or plastic card.
According to Stellar, published at the beginning of 2022, by the end of the year, the integration of the virtual machine and support of smart contracts should be completed into this network. This important update can change the Stellar ecosystem and lead to the active development of Defi services that have become familiar to users of other blockchain platforms.