Usually, you need to spend a lot of time and pay a high fee to carry out a transaction from one country to another. The creators of Stellar decided to solve this problem. With this cryptocurrency, you can make fast, secure, and cheap payments around the world. Let’s talk more about this project today.
Stellar Development Foundation Overview
A non-profit Stellar Development Foundation (SDF) was created to develop the system. Its founders don’t have the opportunity to receive dividends for participation in activities or sell shares.
At launch, XLM operated using the Ripple protocol. After a while, the team developed an in-house Stellar protocol. The SDF is the guarantor of free access to the source. Information about the activities of the project team is published on the official website and social networks pages.
At the first stage, they planned to generate 100 billion coins. They drew up a budget for the development of the fund (5% of the entire issue). It is supposed that 25% of all coins would go to non-profit structures. According to the restrictive agreement, holders of large amounts of Lumens are not allowed to sell coins for five years.
The primary level of Stellar is an ownership tracking system. The same as accountants, it uses a ledger, but the innovation of Stellar is that there is no accountant. There is a network of independent nodes. Each of them checks and rechecks the work of the others. Stellar is a decentralized system, meaning no one can stop the network or secretly set it to their liking. Still, even without a central authority, the ledgers are checked and updated every five seconds.
A unique algorithm, called SCP, is responsible for correct operation and synchronization. There are many ways to reach an agreement in a decentralized system. For example, the PoW used on the Bitcoin network was invented first and remained the most famous. However, PoW left room for improvement like many early projects. SCP strives to be better at being customizable, fast, and highly energy efficient.
A robust API is right above this baseline, so you don’t need to understand the intricacies of distributed consensus to operate on Stellar. Uncomplicated, well-documented features allow new digital money to move in a familiar pattern. It does not make sense to trade tokens between accounts, create markets, and issue assets.
Where Can I Buy Stellar (XLM)?
The easiest and most convenient way to buy cryptocurrencies is decentralized exchanges. Godex.io is one of them. The list of this platform contains 201 cryptocurrencies available. For example, the swapping XLM to BTC occurs in just a couple of clicks. Confirmation takes place within 5-30 minutes. Godex has a friendly and straightforward interface absolutely any user can understand.
Stellar`s advantages and disadvantages
There are pros and cons to Stellar cryptocurrency. Let’s talk about positive features first:
- Scalability is higher than that of other cryptocurrencies. The speed of processing transactions within the Stellar blockchain is considerable. Besides, the project boasts low fees.
- Each user may launch his node in the network independently of the developers’ approval. It means decentralization, which we lacked at Ripple.
- Due to the vast possibilities of the technology, the Stellar project carries ICO for different companies. Besides, its blockchain may be good at performing large transactions between banks.
Here are Stellar’s drawbacks:
- Lack of motivation to run full nodes. Since transactions on the network are incredibly cheap, maintaining the operation of the node does not bring financial benefits.
- The Stellar network is managed on behalf of the fund, which announced the non-commercial nature of its activities, and its main task is to distribute XLM coins among network users evenly. This process is prolonged, and at the moment, the Stellar developers control more of their tokens than their counterparts from Ripple.
Reliance on the creation of a universal exchange platform for private users has not yet justified itself. Unfortunately, the Stellar cryptocurrency, which most of the community sympathizes with, is not in demand as a means of payment yet.
The launch of a payment system for banks IBM and decentralized exchange on the Stellar blockchain adjusted the balance in favor of this cryptocurrency. So far, it is the beginning, and these efforts might bring fruit.
There is no single answer to Stellar’s return on investment (ROI). Any investment carries certain risks. Before parting with your money, you should weigh everything carefully.