What is Stellar?

by Community

What is Stellar?

Stellar aims to reduce both the cost and time requited for cross-border transfers. It offers cheap costs, and faster transactions.

Getting Started - What is Stellar

Even though Bitcoin, the top cryptocurrency by market cap, garnered headlines over the past few years, the Stellar platform is gaining traction and increasing in value rapidly.

In this article, we will learn about Stellar and its superiority to other cryptocurrencies. Let’s jump inside!

What is Stellar?

Stellar is an open-source network for currencies and payments which aims to connect financial institutions and reduce both the cost and time required for transactions. It’s flexible.

Stellar offers an interesting opportunity for traders and holders. It makes it possible to create, send, and trade digital representations of all forms of money, such as: Dollars, Pesos, Bitcoin, etc. It is designed to bring the worlds financial system on a single network so they can work together!

Open Source

Stellar is an open-source network, and as such is owned by the people who use it.

Currency-Adjacent

Stellar is a decentralized system which is best for trading any kind of money in a transparent and efficient way. No central authority – everyone is checking and verifying the network.

No Central Authority

Stellar is a system without a central authority, which ensures no one can stop the network or adjust it to their liking. A network of independent nodes ensures that the correct balances were debited or credited by checking them several times. Each node makes sure that every other node in the network sees and agrees to the transactions and ensures that none change those transactions fraudulently.

Anyone Can Check & Verify

When you send money to someone on a Stellar-built app, the amount of debited or credited balance is checked and verified by the nodes, globally, anyone can participate in that verification process. The nodes and their communication are public, and anyone can join the Stellar consensus process by installing Stellar software.

How Stellar Works?

The Stellar network has its native digital currency Lumens (XLM). A small amount of Lumens is required to initialize accounts and for paying the transaction processing fees. But Stellar doesn’t privilege any specific currency. It is designed to create traditional forms of money. For example, suppose you created a digital representation (Token) of USD (Dollar) on the Stellar network. You can advertise that whenever they deposit $1 in traditional currency (i.e. USD) they will receive $1 of your token, which can then be converted back to $1 in traditional currency (i.e. USD) at any time. So, people can use the tokens in the same way as traditional money, or convert them to traditional money without hassle.

Speed Comparison

Transaction Speed Transaction Fee
Bitcoin 10-45 Minutes ~ $3
Ethereum 10-20 Seconds ~ $20-$50
Stellar 3-5 Seconds ~ 0.0000137$

Conclusion

Stellar has cheaper costs, and faster transactions. You can learn more about stellar from the links below:
stellar.org

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