What is Stellar (XLM)

What is Stellar (XLM)

Stellar is a decentralized blockchain and open source platform with the objective of connecting users, money transfer system, and financial institute together to solve the problem regarding time and cost for money transactions between countries.

Founder

The Stellar blockchain was launched in 2014 by Jed McCaleb, who also founded Mt. Gox and co-founded Ripple, After the Stellar was found, Patrick Colison, CEO of Stripe, join the team to form Stellar Development Foundation (SDF)

Why XLM

Stellar consist of 4 major factors which are:

1. Stellar Core: Node that run on the Network and responsible for communication and data management which include reviewing and storing data that go through Stellar Consensus Protocol
2. Stellar Consensus Protocol: is an open-source system that offers a unique way to reach consensus. Stellar Consensus Protocol functions by letting nodes choose other nodes they believe to be reliable and then working with them to produce and validate a set of valid transactions to alter the ledger’s state. These nodes then pick other trustworthy nodes to collaborate with and follow suit to arrive at network consensus through a quorum.
3. Horizon API: serves as the bridge between apps and Stellar Core. The API consists of Transaction APO, History API, and Trading API.
4. Stellar Smart Contracts (SSCs): transaction program that add other conditions to proceed such as Multisignature. In other words, it works as a password to log in to the account.

With these 4 factors, Stellar network transaction speed between countries is very fast compared to bank transfer, and the transaction fee is very low.

XLM Utility

XLM is the utility coin of Stellar, and considered to be one of the very early cryptocurrencies to be created. The coin was designed to be a medium of exchange for transactions between countries and able to support every fiat currency. With the network that allows users to make Peer to Peer payments, every user can perform such transactions without a middle person. The network also connects to financial institutes, which can increase the chance for certain groups of users to be able to make financial transactions without going directly through the bank.

Roadmap and future of XLM

As Stellar makes transactions between countries more efficient, financial organizations are interested in joining partnership with Stellar. Some of such organizations include IBM and Deloitte. Recently Stellar also teamed up with MoneyGram, The HoneyCoin app, and Fonbnk as well.