Stellar is a platform for hosting ICOs and also a distributed payments network focused on fast and affordable cross-border transactions.
Since Stellar was launched in 2014, the network has been operating on its own digital currency unit, the Lumen (XLM), and has gotten many people excited.

Stellar Lumens (XLM) is one of the most popular cryptocurrencies in the entire universe that allows people to send money overseas instantly. It has the backup of many large tech firms.
In this guide, we will analyze everything you need to know if you really want to know how Stellar works, the benefits it offers to users, and more.

This article will help you know how Stellar (XLM) works, the features of the coin, and the people behind Stellar.

What is Stellar?

Jed McCaleb and Joyce Kim created Stellar in 2014 after McCaleb co-founded Ripple and the cryptocurrency exchange Mt. Gox.
Stellar was created to connect people, banks, and payment systems. The main purpose is to offer affordable and quick transfers for both individual users and companies using blockchain technology.

Stellar is able to support thousands of transactions per second, much more than other crypto networks such as Bitcoin (BTC) and Ethereum (ETH), and also a project with a decentralized and open database that allows parties to send and receive funds with a confirmation time of 3-5 seconds.

Stellar, the 10th largest cryptocurrency in the market represented as XLM, is powered by Lumens to move funds across borders.
Banks use the stellar network to get connected so users can send funds in a quick and easy way by combining cryptocurrencies and blockchain technology with the traditional banking system.

Instead of a bank sending funds from one country to another using local fiat currency, it’s rather possible to execute this on the XLM digital asset.

The History of Stellar Lumens

Stellar, co-founded by Jed McCaleb, was launched in 2014. McCaleb was also the co-founder of Ripple, which is really among the largest competitors to Stellar. The purpose of creating Stellar was to assist in making cross-border payments more efficient.
Stellar has partnered with several companies and platforms all over the world since 2014. There is still much progress to make while the growth has been impressive.

The main goal of the Stellar Development Foundation is to increase awareness of the existence of Stellar. The team also ensures the platform and its interface are user-friendly, simple, and affordable for people all over the world to send and receive money.

The Future Outlook and Performance of Stellar Lumens

We believe that Stellar Lumens will continue to get more popular because the services offered on the platform are easy to understand and they solve a lot of problems for millions all over the globe.

The system and reputation built by the Stellar Team convince several people that Stellar Lumens could be the future of borderless payments.
Like many other cryptocurrencies, Lumens can also act as an investment and makes many believe that the cryptocurrency is going to increase in value.

Stellar Consensus Algorithm

The consensus algorithm of Stellar is the Byzantine Fault Tolerant (PBFT). There was a predefined set of validators in the Stellar network chosen by a central authority that is completely different from how PoW (Proof-of-Work) is not chosen by any central authority where validators are miners that provide the necessary processing power.

Stellar moved on and adopted a new version of a consensus algorithm known as Stellar Consensus Protocol, which is based on the Federated Byzantine Agreement (FBA).

The Stellar Consensus Protocol is the primary implementation of the FBA introduced in 2015 by Professor David Mazières of Stanford according to London Blockchain Labs.

What is Lumens?

Lumens or XLM is the digital currency that powers the Stellar blockchain network that is built into the network, considered a unit of digital currency, like Bitcoin or Ethereum.

100 billion lumens were issued when the virtual currency was launched in 2014 with the Stellar network. XLM was known as stellar at that time but in 2015 the name changed to lumens.

One of the purposes of Lumens is that they are used for paying transaction fees and can play an anti-spam role to prevent people from overwhelming the network and aid in prioritization.

Because the transaction fees on the Stellar network are equal to 0.00001 lumens it’s possible to reduce malicious intentions from users to flood the network in the form of a Denial-of-Service attack or DoS attack.

Another purpose is for lumens to facilitate multi-currency transactions. When the network was released 100 billion lumens were created. There is a 1 percent inflation rate each year as Stellar informs and no one can generate new lumens arbitrarily.
Stellar Lumens Competitors

One of the cryptocurrencies that currently compete against Stellar includes XRP. Stellar and Ripple are related to their goals as XRP and XLM can be used by both individuals and companies to send transactions around the universe in a fast and easy way.

In comparison to XLM, XRP is a much more valuable virtual currency and the number of companies working with Ripple is much larger than the companies using the Stellar Network. Companies in the market will find various solutions that would fit their needs on each of these cryptocurrencies and networks as the two have diverse consensus algorithms.

Over 200 financial firms around the universe using the products and services created by Ripple have already partnered with them. Instead, Stellar has a smaller firm and they do own just 5 percent of the XLM coins created. Around 60 percent of the total supply of XRP is owned by Ripple.

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