Overview
- Stellar is an open-source network bridging global financial systems for seamless cross-border payments.
- It enables instant, low-cost transfers of any currency worldwide.
- Stellar Lumens (XLM) act as a bridge asset, facilitating currency conversions.
The global economy connects us to products worldwide—Colombian coffee, Indian textiles, Chinese tech—yet moving money across borders remains slow and expensive. Stellar eliminates these hurdles by streamlining international transactions.
Understanding Stellar
Core Features
- Launched: 2015 by Jed McCaleb and Joyce Kim.
- Purpose: Facilitate multi-currency payments with minimal fees (~$0.00000178 per transaction).
- Key Differentiator: Enhances traditional finance rather than replacing it (unlike Bitcoin).
Example Use Case
A Mexican buyer purchasing Ugandan coffee:
- Pesos are converted to XLM via Stellar.
- XLM transfers to the seller’s wallet in seconds.
- Seller converts XLM to Ugandan shillings or holds it for future transactions.
👉 Explore how Stellar simplifies global payments
How Stellar Works
Decentralized Network
- Nodes: Run by individuals/organizations using the Federated Byzantine Agreement (FBA) algorithm.
- Consensus: Nodes agree in interlocking sets, enabling fast (5-second) transaction validation.
Advantages Over Mining
- Energy-Efficient: Nodes require minimal processing power (comparable to an email server).
- Security: Businesses running nodes have incentives to maintain network integrity.
Stellar Lumens (XLM)
Role of XLM
- Bridge Asset: Enables currency conversions (e.g., USD to EUR).
- Transaction Fuel: Pays network fees (~$0.00000178 per transaction).
Supply Details
- Total Supply: 50 billion (reduced from 100 billion in 2019).
- Circulating Supply: 20 billion (remaining held by Stellar Development Foundation).
Applications
Remittances
- Problem: Traditional remittances are slow/costly.
- Stellar Solution: Send $20 from the U.S. to Jamaica in **5 seconds** for <$0.01.
- Compliance: Must use licensed providers adhering to local laws.
XLM Price History
- All-Time High: $0.89 (Jan 2018).
- Current Range: $0.08–$0.20 (2023–2024).
- Market Cap: Top 30 cryptocurrencies.
👉 Buy XLM securely via trusted platforms
FAQ
1. How does Stellar differ from Bitcoin?
Stellar focuses on interoperability between currencies, while Bitcoin aims to be a standalone currency.
2. What’s the transaction speed?
~5 seconds vs. Bitcoin’s 10+ minutes.
3. Is Stellar eco-friendly?
Yes—its low-energy nodes contrast with Bitcoin’s energy-intensive mining.
4. Can I use Stellar for small transfers?
Absolutely. Fees are fractions of a cent, ideal for micropayments.
5. Who governs Stellar?
The Stellar Development Foundation, a non-profit overseeing protocol upgrades.
6. Where can I buy XLM?
Through exchanges or compliant remittance providers.
Stellar merges the best of blockchain with traditional finance, offering a scalable solution for global money movement.