What is Stellar?
This blog post will cover:
- What is Stellar?
- Where did Stellar come from?
- What are the advantages of Stellar?
- What are the disadvantages of Stellar?
- How to buy Stellar on SimpleSwap?
What is Stellar?
Stellar is a distributed blockchain based ledger and database. It is used to make transfers of values without third party. Stellar shares some similarities with Ripple. Both of them aim to connect financial institutions. They shared the same protocol initially. But there are some important features that Ripple doesn't have. Stellar is focused on developing markets. And it is an open-source technology. Stellar has its token. It is called Lumens (XLM). Lumens are being used within the network. All the users are required to keep a minimum amount of 0.5 lumens on their accounts. That allows identifying inactive accounts.
Where did Stellar come from?
The founder of Stellar is Jed McCaleb. He was a co-founder of Ripple. In 2014 he with Joyce Kim, the lawyer, launched the network system. Originally it was released as a decentralized payment network and protocol with its native asset called stellar. Its native currency was later called Lumens (XLM). In August 2014 Mercado Bitcoin, the first Brazilian exchange, announced that they were going to use the Stellar network. By 2015 Stellar had more than 3 million registered users. In April 2015 the upgraded protocol was released. It had a new consensus algorithm, which used SCP. In 2016 Deloitte announced integration with Stellar to build a cross-border payment application. In September 2017 a benefit program was announced. Stellar’s network was expanding and including more and more partners. Among them were ICICI Bank in India, African mobile payments firm Flutterwave, and French Tempo Money Transfer. Later Stellar also partnered with IBM and KlickEx to facilitate cross-border transactions in the South Pacific Region.
What are the advantages of Stellar?
- It is decentralized
The Stellar network operates on several servers or nodes. It is not controlled by a single party and anyone can become a nod.
- Distributed ledger
Every node hosts its own copy of the ledger. Everyone of them are synced. Nodes help to validate transactions.
- *Stellar Consensus Protocol *
(SCP)- Consensus means that all parties have to reach an agreement over a piece of data. It may take some time. But in Stellar network consensus is reached by leveraging SCP in 2 - 5 seconds.
- Distributed exchange
Users can place currency exchange offers on the ledger.
- Multi-currency transactions- It is the key advantage of Stellar network
That means that users can send and receive payments in their desired currency.
Stellar network and currencies are connected with Anchors. Anchors are responsible for taking deposits and using credits. Users are supposed to trust Anchors to honor their deposits and withdrawals of credits issues.
What are the disadvantages of Stellar?
Although Stellar is considered to be one of the best networks, it has some disadvantages. - Basically Stellar is a fork of Ripple
And Ripple is considered to be its main competitor. In terms of popularity, Ripple is ahead.
- Some may say that the fact that Stellar is decentralized is a disadvantage
Some financial systems prefer to interact with more stable and centralized systems.
How to buy Stellar on SimpleSwap?
Let’s say you want to buy Stellar. What should you do? We suggest you go to the SimpleSwap homepage and follow the instructions below:
- Choose the currency you want to exchange (e.g. BTC) in the first drop-down list. Enter the amount you would like to swap.
- Select XLM in the second drop-down list. You will see the estimated amount that you will receive after the exchange.
- Enter the Recipient’s Address. Stellar will be sent to this address. Be careful and make sure you use the correct address.
- Check all the information you have entered. If everything is correct click the Exchange button.
- You will see the Bitcoin deposit address. You need to transfer the necessary amount of BTC to this address to start the exchange.
This is everything you need to know to buy XLM.