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In 2014 the creators of Stellar Lumens decided to close the gap between the world of cryptocurrency and the world of finance. Since then, the Stellar cryptocurrency established a partnership with some of the biggest technological and financial companies on the market. These partnerships include companies like IBM, Stripe and Deloitte, as well as at least a dozen payment-processing entities and financial institutions in Europe and Asia. Stellars main aim is becoming a worldwide platform for digital payments, connecting people and financial institutions.

Cryptocurrency Stellar – the birth of an innovative platform and cryptocurrency.

Some people assume that Stellar began as a branch of the Ripple protocol, as Jeb McCaleb, the creator of Stellar, was also a founder of Ripple. But McCaleb himself states that these two tokens have different codes and are not “related”. The main difference between the Stellar and Ripple cryptocurrencies is that Stellar Lumens are supposedly aimed at private persons, while Ripple aims at institutions.

McCaleb left Ripple in 2015. The reason for that is hard to pinpoint, as various sources cite various reasons. According to many analytics, Jeb’s departure was related to the Mt. Hack Gox incident, the biggest hacker attack in the history of Bitcoin. Mt. Hack Gox cost the Bitcoin users over 460 million USD. The Mt. Gox market was founded by McCaleb himself. After the attack, he was forced to leave the parent company and focus on his own project, which were the Stellar Lumens.

McCaleb was able to finance Stellar Lumens due to the investment of Stripe, the Irish payment processor. Despite the doubts about McCaleb’s reputation in the blockchain community, Stellar became one of the most popular cryptocurrencies, cooperating with IBM and other tech giants.  It is caused by the fact that Stellar’s programmer team was filled with the cryptography branch leaders, including Stanford University scientists.

Cryptocurrency Stellar technology characteristics

Stellar Lumen, despite being associated with Ripple, is different from this cryptocurrency in quite a few ways. Most important of all, Lumens uses a different protocol from Ripple. Unlike most of the cryptocurrencies, Stellar doesn’t use a confirmation protocol, using a Stellar Consensus Protocol (SCP) instead. SCP allows for fast and safe payments for any person in the world. In addition, the SCP Stellar code allows for using Lumens without mining them. The decision to forego mining was deemed controversial – some experts say that it makes Stellar Lumens less decentralized and less safe than Bitcoin.

The Stellar network structure consists of anchors, trusted subjects, including banks and non-governmental organisations, or people, who have a copy of the Stellar Core on their own servers, instead of blockchain validation, which can work without a trusted connection but takes more time and resources. SCP uses a system called Federated Byzantine Agreement. Instead of expecting every node to check the transaction, each of them decides which other nodes it deems trustworthy and agrees to accept the outcome of a consensus between a set number of trusted nodes, called an excerpt of a quorum. Although it’s not as reliable as Bitcoin’s chain of blocks, it’s a very practical system, as long as everyone involved  – meaning mostly financial service providers – adheres to the rules included in their own contracts. Their interests often coincide, so it isn’t hard for SCP to reach a consensus that will function as a whole, without the need for every part to trust all the other parts.

Cryptocurrency Stellar – platform or cryptocurrency?

One particularly interesting innovation that is built into the Stellar network is a decentralized exchange platform designed for asset trading, including fiat and cryptocurrencies. Since an open source platform is free and incredibly fast, it may turn out to be the biggest and the most popular Stellar resource. Stellar platform supports smart contracts and ICO; because of this it’s one of the leading rivals of Ethereum in this area and is currently winning due to faster and cheaper transactions.

On the Stellar platform you can use the Stellar tokens, which are a cryptocurrency. Every token spent on the Stellar platform instantly becomes available on the market. It is one of the greatest upsides to using this cryptocurrency, as through connecting to the platform it gives access to many assets. Trading Stellars on their dedicated platform is also a tempting proposition to the altcoin creators, frustrated with the obstacle that is the lack of access to the more centralized cryptomarkets.

Cryptocurrency Stellar – the vision of a future?

Most expert predictions concerning Stellar concentrates on the potential of its cheap and fast worldwide transactions. By using the aforementioned decentralized exchange platform, Stellar users can automatically choose the most beneficial conversion factors and lowest rates, which should lower the costs of transactions.

Since Stellar is an open-source software, it is easy to integrate with already existing mobile payment platforms and money transfer services, that have already become popular all over the world, which allows for high compatibility with these platforms. This could significantly improve the access to loans and markets for businesses and private people in the developing countries.

Considering that Stellars whitepress is public and the platform supports smart contracts, this cryptocurrency can be an effective and clear mean for crowdfunding, as well as a grassroots support in collecting and distributing financial means. While other cryptocurrency platform do have similar potential, it’ll be hard for them to compete with Stellar when it comes down to speed and price. Which is why asset market specialists have a lot of good things to say about Stellar Lumens and their perspectives for the foreseeable future.

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