Stellar is an open source blockchain that aims to facilitate crypto-asset transfers of value, which includes payments. Mainly, the project is focusing on building a worldwide financial network open to anyone by connecting individuals, institutions, and payments systems through its platform. Eventually, this will lead to a new system with cheaper, quicker and more reliable transactions.
How Stellar works?
The information is distributed all over the interconnected servers (nodes) in the Stellar Network. Instead of proof of work, Stellar uses its Stellar Consensus Protocol (SCP). The protocol provides a way to reach consensus without relying on a closed system in order to record a transaction. Stellar claims that SCP has a set of provable safety properties. The SCP is considered as the first implementation of the Federated Byzantine Agreement (FBA). Idealized in 2015 by David Mazière, the FBA describes a way for nodes in a network to reach an agreement. Its main key features are decentralized control, flexible trust, low latency, and asymptotic security.
Stellar Decentralized Exchange (SDEX)
The Stellar Decentralized Exchange is an exchange that enables users to trade and transfer currencies across borders. Through SDEX, multiple currencies can be actively traded by either the bank themselves or a market maker directly on the exchange.
Previously created one of the first bitcoin exchange, Jed McCaleb is the face and CTO of Stellar. Moreover, he founded and served as the CTO of Ripple which he left in 2013 due to differences in ideology against the rest of the team.
Compared to other projects and startups, Stellar has one of the most influential advisory boards in the tech world. The board includes Patrick Collison (Stripe CEO), Matt Mullenweg (WordPress Founder), Naval Ravikant (AngelList Founder), and Sam Altman (Y Combinator President).
Stellar does not provide a concrete roadmap for the next years. However, by the launch of each year the team posts “their sort of roadmap” for the next year. For instance, in 2019, the main focus will be on Horizon, Stellar Core, Product, Ecosystem, and Organization.
Actually, the team is planning to add transactions that break in consensus to Horizon. In addition, in the second and third quarter of this year, the project is aiming to have more validators connected to the network. The team is planning to develop data access to Stellar core’s database, in addition to combining protection for corrupt archives and support full validator finding and bulk configuration.
Furthermore, 2019 roadmap highlights that the company is rebuilding its website. It is presumed to be ready by May 1st.
Stellar VS Ripple:
- Both co-founded by Jed McCaleb
- No mining allowed – private nodes
- Both use distributed ledger technology (DLT)
- Near instant and free transactions
- Perfect for international transfers
- Developers control the circulating supply
Stellar: Help the un-banked in poorer regions
Ripple: Supply banks and financial institutions
Stellar: Stellar Consensus Protocol
Stellar: Inflationary (1% per year)
Ripple: Deflationary (Transaction fees burned)
Stellar: Considered less centralized
Ripple: Considered more centralized
Stellar is scalable
Compares to other blockchains, Stellar combines between a low transaction cost, a high number of transactions per second, and average settlement time. Actually, the average cost of a Stellar transaction is 1/100,000 of a penny. Moreover, recently Stellar achieved more than 10,000 transactions per second, with an average settlement time of 5 seconds.
In order to achieve its main goal of building a cross-border payments application, Stellar made partnered with tech big names such as IBM and Deloitte, in addition to local companies including KlickEx in the South Pacific region, ICICI Bank in India, and Flutterwave in Africa.
Stellar enables smart contracting
Stellar has the ability to incorporate elements such as blockchain smart contracts, alongside features like multi signatures. Eventually, this potentially enhances the functionality of the payment protocol in general.
As mentioned above, in the difference section between Stellar and Ripple, the latter is focusing more on banks and financial institutions. This brings a very huge competition.
Minimum Limit for Having Access:
In order to have a working wallet, the user must have at least 20 XLM coins in his wallet.
Stellar Consensus Protocol Whitepaper: https://www.stellar.org/papers/stellar-consensus-protocol.pdf
2019 Roadmap: https://www.stellar.org/roadmap/
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