Stellar – CoinDesk

Stellar is a blockchain-based payment protocol created in 2014 by Jed McCaleb – the founder of Mt. Gox and co-founder of Ripple – and attorney Joyce Kim.

Stellar’s native cryptocurrency, Lumen (XLM), serves several functions in the network. It can be used to pay transaction fees and can act as a bridge allowing users to trade between multiple currencies. Stellar also requires users to hold a minimum balance of XLM on their accounts.

The Stellar Network was launched in July 2014 together with the non-profit Stellar Development Foundation. Founded by Jed McCaleb and Stripe CEO Patrick Collison, this foundation distributed the initial 100 billion XLM to a variety of parties: 50% to individuals who signed up via invitation at a rate of around 50-300 XLM per person, Jan. % to different partners, 20% to Bitcoin and XRP holders in two separate rounds (October 2016 and August 2017) and 5% held for operational purposes.

After the distribution of the first 100 billion XLM tokens, the network mints new coins at no cost for circulation at a rate of 1% per year. In 2018, crypto wallet company Blockchain teamed up with Stellar to distribute $ 125 million worth of XLM (roughly half a billion tokens) to blockchain wallet holders who signed up for the Airdrop.

In 2019, Stellar hired ex-Mozilla executive Denelle Dixon, known for her advocacy for net neutrality and the control of personal data.

Stellar has partnered with a number of companies around the world, including IBM and ICICI in the US, and Barclays and Deloitte in the UK

Network design & security model

Stellar’s native cryptocurrency, Lumen (XLM), serves several functions in the network. It can be used to pay transaction fees and can act as a bridge allowing users to trade between multiple currencies. Stellar also requires users to hold a minimum balance of XLM on their accounts.

Stellar uses its own consensus mechanism, the Stellar Consensus Protocol (SCP), which was developed by Stanford professor David Mazières. This system relies on the people who run the software (nodes) to communicate over the Internet and work together between networks.

Trust works in this system in such a way that each person who runs the software has the task of identifying several trustworthy participants in order to apply the cryptographic rules that enable the validation of transactions.

Everyone who downloads the software is responsible for running the nodes. This can be anyone from banks to developers to companies or individuals who just want to transfer money.

Monetary Policy & Cryptoeconomics

After the first 100 billion XLM tokens have been distributed, new coins will be brought into circulation for free at a rate of 1% per year.

The protocol distributes these lumens each week to accounts that receive over 0.05% of the votes from other accounts on the network. This inflationary mechanism rewards users in proportion to the number of votes cast.

For example, if an address receives 5% of the vote, it will receive 5% of that particular week’s inflation premium.

Transaction processing

All transactions in the Stellar network are processed in the blockchain and the average closing time of the ledger is between 3 and 5 seconds.

Coding

Stellar is an open source project that originally emerged from Ripple. It has software development programs written in C ++ Javascript, Ruby, Go and CSS.

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