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The Stellar Consensus Protocol (SCP) introduces a novel method for computers to reach agreement over the internet, akin to how banks need to concur on financial transactions.

It's engineered to be more open and accessible compared to older systems while maintaining robust security.

Imagine it as a highly dependable group chat where all participants must agree before significant decisions are finalized.

Since its initial presentation in its whitepaper, SCP has demonstrated its effectiveness by successfully processing millions of transactions and supporting a wide array of financial applications globally.

The system has become particularly crucial for facilitating rapid, low-cost international money transfers and connecting financial institutions across the world.

Technology of Stellar (XLM)

SCP operates using a mechanism called 'federated Byzantine agreement' or FBA.

Think of it this way: instead of a single central authority dictating all decisions, each participant (or node) within the network selects trusted peers to assist in decision-making.

These groups of trusted peers are known as 'quorum slices' – similar to having different circles of friends whose opinions you value.

When a sufficient number of your trusted friends reach an agreement on a matter, and their trusted friends also concur, that's when decisions are made within the network.

A significant advantage of SCP is its flexibility regarding trust.

You might choose to trust a large bank, or perhaps a smaller non-profit organization – the decision of whom to trust rests entirely with you.

This inherent flexibility makes the system considerably more open and accessible than traditional systems where everyone is compelled to trust the same central entity.

The system also boasts strong security features, employing robust mathematics and digital signatures to ensure the integrity of agreements and prevent fraudulent activities.

Even if some participants attempt to behave maliciously, the system remains secure as long as a sufficient number of honest participants remain active.

Another key benefit of SCP is its efficiency; it doesn't demand expensive hardware or consume vast amounts of electricity, unlike protocols like Bitcoin.

This makes it a more practical solution for everyday applications and significantly more environmentally sustainable.

Currently, the network processes thousands of transactions per second while maintaining minimal energy consumption.

The system also incorporates specific features to mitigate spam and ensure smooth operation, such as requiring a small fee for transactions and enforcing minimum account balances.

Tokenomics of Stellar (XLM)

While the whitepaper primarily focuses on the technical aspects of the protocol rather than specific token economics, understanding how value moves through the system is essential.

The protocol is designed to handle the transfer of any form of value, be it cryptocurrency, traditional fiat currency, or other types of assets.

It's engineered for high efficiency and low cost, enabling transaction fees to remain very low.

The system is also designed to be highly inclusive, allowing even small organizations or individual users to participate in the network.

This inclusivity fosters decentralization and prevents any single entity from wielding excessive control over transactions.

The network utilizes its native token, XLM (Lumens), to help prevent spam and facilitate seamless transactions between different types of assets.

Think of XLM as a bridge currency that aids in connecting various forms of money and assets within the network.

As of 2023, the network supports a wide range of asset types and maintains some of the lowest transaction fees in the cryptocurrency space, typically a fraction of a cent per transaction.

The network has also implemented automated market makers and liquidity pools to enhance trading efficiency within its ecosystem.

Roadmap of Stellar (XLM)

The whitepaper outlines several fundamental objectives for the protocol's ongoing development.

The primary goal is to establish a global financial network that is accessible and usable by anyone.

This includes simplifying the onboarding process for new organizations and extending financial access to underserved communities worldwide.

Another crucial objective is to preserve the system's integrity through decentralized control.

This involves continuously developing mechanisms for participants to collaborate effectively without the need for a central governing authority.

The protocol also aims to maintain rapid transaction speeds – typically just a few seconds – while upholding robust security.

Recent advancements have broadened these objectives to include smart contract capabilities, enhanced cross-border payment solutions, and improved integration with traditional banking systems.

The network now supports thousands of different assets and continues to expand its partnerships with financial institutions globally.

Future plans involve further enhancing the system's accessibility and user-friendliness while introducing new features to support a wider array of financial services.

Team of Stellar (XLM)

The protocol was conceived by David Mazières and is supported by the Stellar Development Foundation.

The team's approach demonstrates a profound understanding of both established financial systems and contemporary cryptography.

Their focus has been on creating a system that is not only technically sound but also practical for real-world applications.

The development team prioritizes making the system accessible to new participants while maintaining stringent security standards.

Since the whitepaper's initial publication, the Stellar Development Foundation has experienced significant growth, now employing numerous developers, researchers, and business development professionals.

The foundation actively collaborates with financial institutions, technology companies, and regulatory bodies to promote the adoption of blockchain technology in global finance.

The team regularly communicates updates on their progress and maintains open channels of communication with the community.

What Is Stellar (XLM)?

Stellar (XLM) is a peer-to-peer (P2P) decentralized network established in 2014 by The Stellar Development Foundation, also known as Stellar.org. The network officially launched in 2015 with the core mission of connecting the world's financial systems and providing a standardized protocol for payment providers and financial institutions. The platform is engineered to facilitate the swift and reliable movement of financial resources at minimal cost. Stellar bridges the gap between individuals, banks, and payment processors, enabling users to create, send, and trade various types of cryptocurrencies.

At the heart of the network is its native digital currency, XLM, also referred to as Lumens. XLM serves as an intermediary currency for network operations and is also used to cover transaction fees. The protocol functions by converting money into XLM and then into the desired recipient currency within seconds.

The Stellar payment protocol is built upon distributed ledger technology, an open-source development that is community-owned and distributed. The Stellar platform's crypto asset plays a crucial role in facilitating cross-border transactions, addressing the challenges of high fees and slow processing times. XLM's primary focus is on assisting individuals with money transfers rather than solely catering to institutions. Consequently, Stellar provides access to financial systems, enabling people to send money globally at low cost and with speed.

Furthermore, Stellar functions as a decentralized exchange and marketplace, featuring a built-in order book that tracks the ownership of Stellar-based assets. Platform users can manage buy and sell orders, as well as select and specify their preferred assets for settlements. XLM is an integral coin that helps reduce transaction fees within this marketplace.

The network maintains a high level of security. To remain active on the network, XLM holders must possess at least one token. This requirement serves the global purpose of ensuring efficient and timely execution of network transactions. Additionally, Lumens offers protection against denial-of-service attacks by making microtransactions prohibitively expensive for malicious actors, thereby safeguarding the Stellar Network from serious threats.

Stellar's target audience primarily comprises individuals in developing countries and everyday users who gain access to the global economy through fast, simple, and inexpensive transactions. The Stellar Network extensively utilizes Lumens to facilitate live currency conversions and to send funds in multiple currencies; currency is sent from one user, and the recipient can receive the amount in a different currency. This feature is particularly advantageous for transactions between currencies without widely traded pairs.

Support for multi-currency transactions is another significant competitive advantage of Stellar, and its cross-currency transaction capabilities have greatly enhanced processes involving international operations. Moreover, users benefit from stable transaction speeds and low transaction costs.

This functionality is powered by a development called Anchors, which act as a bridge between different currencies and the Stellar network, simplifying exchanges within the network and accelerating the overall process.

In summary, the key benefits of Stellar (XLM) include:

• Low Transaction Costs: Significantly cheaper than traditional methods.

• Fast Transaction Speeds: Transactions are typically processed within seconds.

• Facilitates Cross-Border Payments: Efficiently handles international money transfers.

• Supports Multi-Currency Transactions: Enables seamless exchange between various currencies.

• Decentralized Network: Operates without a central authority.

• Focus on Financial Inclusion: Aims to provide financial access to underserved populations.

• Acts as a Decentralized Exchange: Allows for the trading of various assets.

• Strong Security: Protected by the Stellar Consensus Protocol and network requirements.

Who Are the Founders of Stellar?

Jed McCaleb co-founded Stellar with the lawyer Joyce Kim after departing Ripple in 2013 due to disagreements regarding the company's future direction.

In explaining the rationale behind Stellar in September 2020, McCaleb told CoinMarketCap: “The whole original design of Stellar is that you can have fiat currencies and other kinds of forms of value run in parallel with each other and with crypto assets. This is super important to drive this stuff mainstream.”

McCaleb's objective is to ensure that Stellar provides individuals with a means of transferring their fiat currency into cryptocurrency and to eliminate the friction commonly associated with international money transfers.

He currently serves as the Chief Technology Officer (CTO) of Stellar, as well as a co-founder of the Stellar Development Foundation. This non-profit organization's mission is to “unlock the world’s economic potential by making money more fluid, markets more open, and people more empowered.”

What Makes Stellar Unique?

Fees are a significant concern for many users. However, high costs associated with cross-border payments are not limited to fiat-based solutions like PayPal; transaction fees on the Bitcoin and Ethereum blockchains have also been known to surge due to network congestion.

Stellar stands out because every transaction incurs a cost of just 0.00001 XLM. Given the low value of a single unit of this cryptocurrency, this ensures that users retain more of their funds.

Few blockchain projects have successfully secured partnerships with major technology companies and fintech firms. Several years ago, Stellar and IBM collaborated to launch World Wire, a project that enabled large financial institutions to submit transactions to the Stellar network and transact using bridge assets such as stablecoins.

While other blockchains have community funds that provide grants to projects contributing to the ecosystem's growth, Stellar allows its users to vote on which ventures should receive this support.

How Many Stellar (XLM) Coins Are There in Circulation?

When the Stellar network was launched in 2015, a total of 100 billion XLM were issued; however, the situation has evolved since then. Currently, the total supply stands at 50 billion XLM, and the circulating supply is approximately 20.7 billion.

In 2019, the Stellar Development Foundation announced a significant move to burn over half of the cryptocurrency's supply. This action resulted in the foundation controlling approximately 30 billion XLM. While a portion of these funds is allocated for marketing and organizational development, about one-third is reserved for making investments in other blockchain ventures.

Explaining the rationale behind this drastic measure – and assuring that no further XLM would be burned in the future – the foundation stated: “SDF can be leaner and do the work it was created to do using fewer lumens… Those 55.5 billion lumens weren’t going to increase the adoption of Stellar.”

How Is the Stellar Network Secured?

The Stellar network is secured using the Stellar Consensus Protocol (SCP), which is characterized by four primary properties: “Decentralized control, low latency, flexible trust, and asymptotic security.”

Through SCP, anyone can participate in the consensus-reaching process, and no single entity can gain a majority of decision-making power. Transactions are also confirmed cheaply and within a few seconds, and safeguards are in place to address potential malicious actors attempting to join the network.

Where Can You Buy Stellar (XLM)?

It is possible to buy Stellar from a wide array of leading cryptocurrency exchanges, including Binance, Coinbase, Kraken, Bittrex, Bitfinex, Upbit, and Huobi. It is also common to convert fiat currency into Bitcoin before purchasing altcoins, and detailed guidance on this process is readily available.

Stellar Blockchain maintains a fixed annual inflation rate of 1%, which is a relatively low cost compared to alternative methods.

In essence, Stellar is an open network designed for the movement and storage of money. Upon its release in July 2014, one of its initial objectives was to enhance financial inclusion by reaching the world's unbanked population. However, its priorities soon shifted towards facilitating connections between financial firms through blockchain technology.

The network's native token, lumens, acts as a bridge asset, making cross-border asset trading more cost-effective. All of this aims to challenge existing payment providers who often impose high fees for similar services.

It is worth noting that Stellar was originally based on the Ripple Labs protocol. The blockchain was created as a result of a hard fork, and the codebase was subsequently rewritten.

Stellar Lumens (XLM) Finding More Use Cases With SDF Partnerships

The Stellar Development Foundation (SDF) has strengthened its partnership with the traditional payment processor, MoneyGram, and has established new partnerships across the globe. In July of the previous year, MoneyGram and SDF announced the launch of a pioneering global on/off ramp "crypto-to-cash" service on the Stellar network.

Powered by the Stellar blockchain, Stellar-enabled digital wallets, MoneyGram’s retail agent network, and Circle’s USD Coin (USDC), the service provides fiat currency users with access to the world of cryptocurrency in several key remittance markets, including Canada, Kenya, the Philippines, and the U.S., with plans for further market expansion.

This service is the result of a collaboration that began in October 2021 when MoneyGram and SDF first established their partnership. According to SDF, the service represents a significant breakthrough in bridging the gap between physical and digital currencies on a global scale.

"This service is a monumental step towards bridging the gap between physical and digital currencies in a way that has not been done before at scale. As it develops, this solution will pave the way for blockchain technology to further financial inclusion, creating fluidity between cash and crypto so more people can benefit from the digital economy," SDF stated in its press release.

SDF and MoneyGram are extending their joint initiative beyond this project. In March 2022, the two organizations announced a partnership with Techstars, a global investment business that provides access to capital, mentorship, and customized programming for entrepreneurs. Together, they intend to launch an accelerator program that will mentor startups developing technologies that facilitate the movement of money to and from Latin America.

Stellar’s Focus Blockchain-Powered Payment Services

SDF has also forged a series of other partnerships recently, including collaborations with Flutterwave, Nium, WhiteBIT, Coinme, Mercado Bitcoin, and OKCoin. It has also partnered with government agencies, including the central banks of Brazil, Ukraine, and Indonesia, as well as the Bank for International Settlements (BIS).

These partnerships align with Stellar's roadmap for 2022, which was carried over from 2021, to enhance the global adoption of cryptocurrencies in traditional cross-border payment circles. The roadmap also outlined the network's intention to test its readiness for future capabilities focused on trust-minimized innovation based on interoperability and inclusion.

Stellar is currently brainstorming strategies to achieve the goals outlined in the final phase of its 2022 roadmap and to plan for 2023 during its annual conference named Meridian.

Where Can I Buy Stellar in INR?

You can buy or trade Stellar on the SunCrypto platform using either the XLM/INR or XLM/USDT trading pairs.