Stellar (XLM)

What is Stellar (XLM)?

Stellar is a decentralized open-source blockchain platform that allows the transfer of digital assets and payments. It was created by Jed McCaleb, the founder of Mt. Gox and co-founder of Ripple.

XLM is the native cryptocurrency of the Stellar network. It has two main functions:

• It acts as an intermediate currency for cross-asset transactions on the DEX. For example, if someone wants to exchange USD for BTC, they may need to go through XLM as a bridge currency.
• It serves as a security measure for the network. Each account on Stellar must hold a minimum balance of 1 XLM to prevent spam and malicious attacks. Each transaction also requires a small fee of 0.00001 XLM to deter network congestion.

XLM has a fixed supply of 50 billion coins, of which about 26.6 billion are currently in circulation. The remaining coins are held by the Stellar Development Foundation, which uses them to fund the development and growth of the network. The foundation also periodically distributes some of these coins to the public through various programs such as airdrops, giveaways, partnerships, etc.

How does Stellar work?

Stellar uses a unique consensus algorithm called the Stellar Consensus Protocol (SCP) to validate transactions. SCP allows nodes on the network to reach consensus on which transactions should be added to the ledger. Unlike traditional blockchain systems, where nodes compete to validate transactions, SCP allows nodes to cooperate and reach consensus without the need for mining.

Stellar’s network consists of nodes that communicate with each other through the Internet. These nodes are responsible for validating transactions and maintaining the integrity of the network. Transactions on the Stellar network are processed in seconds, making it one of the fastest blockchain-based payment systems.

Conclusion

Stellar is a fast, secure, and affordable payment system that offers several advantages over traditional payment systems. It provides a decentralized platform for cross-border payments and exchange of currencies. Stellar’s unique consensus algorithm and low transaction fees make it an ideal solution for small transactions. Its support for multiple currencies and transparency make it an attractive option for businesses and individuals looking for a reliable payment system.