Stellar is a non-profit open source network that uses Lumens (XLM) as currency intermediary to facilitate cross-border payments quickly and cost effectively for individuals, banks, companies, charities and any other users of its platform. Stellar also supports digital tokens known as assets which may represent loyalty points, rewards or stocks among other things.
Stellar can easily integrate with existing financial systems, augmenting them instead of replacing them. This enables it to provide faster, cheaper and more reliable payments than traditional methods; additionally it may help unconnected communities connect to global finance for the first time ever.
Stellar network operates using a distributed ledger that records all transactions accessible on the Internet. Lumens is its native cryptocurrency that serves to pay transaction fees and provide liquidity on its network.
Stellar accounts have unique addresses that allow for sending and receiving Lumens or issued assets on the network through wallets. Stellar also features a decentralized exchange where users can trade assets directly on its platform with liquidity provided by other Stellar accounts.
Stellar’s primary use case for remittances is helping families and friends send money across borders at reduced costs than with traditional methods. Stellar is particularly beneficial for people living in places with weak national currencies as the transaction costs can be drastically reduced when sending remittances abroad.
Stellar can also power digital identities, enabling individuals to link their Stellar accounts with real-world identity documents so they can securely vote, transact and access government services with an extremely transparent process that’s trustworthy and transparent. Furthermore, its supply chain capabilities help facilitate fast and low cost transactions between suppliers, manufacturers and distributors.
Stellar network was designed to be scalable, flexible, and energy-efficient. It utilizes a distributed consensus model where nodes known as anchors connect it with external financial systems by acting as intermediaries. Stellar Core software that runs nodes is responsible for validating transactions, maintaining the ledger, and reaching consensus through federated Byzantine agreement models to reach consensus. Stellar anchors are organized into quorum slices – subsets of nodes with uncompromisable voting rights – that ensure high security for their network. Furthermore, Stellar offers more scalability and cost effectiveness compared to other blockchain networks. As it requires fewer nodes to validate transactions and maintain its ledger, using less computing resources for consensus than other blockchains do, Ethereum avoids many of the issues plaguing other chains such as scalability and energy efficiency issues, keeping more people and businesses accessible – especially as many poor communities lack traditional banking services.