Stellar Network: Know the Platform Elaborately

Stellar Network: Know the Platform Elaborately

Do you know, what are the common features of the fastest-growing platforms of blockchain technology? The answer is three exact factors connect the leading as well s emerging blockchain platforms: such as this platform

  1. Higher speed
  2. Low cost of transactions in comparison to the predecessors
  3. Better scalability. 

No wonder, the Stellar blockchain is existing in the same league. Presently, Stellar dominates as one of the top 10 popular-most blockchain platforms. 

What is Stellar?

Stellar (XLM) is essentially a peer-to-peer decentralized network, qualifying as the chief competitor of XRP. While XRP associates with the banks, XLM or Stellar is the form of payment that will relate to the masses. Precisely, Stellar will excel in quick and inexpensive regular purchases. 

The native token of Stellar is Lumen or XLM. 

  • Right now, Stellar is holding the rank of 28 in the list of largest cryptocurrencies in terms of market cap. 
  • The value at present is around $9.16 billion. 

If you find the discussion interesting, do continue reading to know more about Stellar. 

Concept behind Stellar

Sometimes, people refer to Stellar as Stellar Lumens. But that is not correct, Stellar is the network while Lumen is the crypto unit of the network. 

The concept behind Stellar is that a person can use the service to transfer everything beginning from tokens to the fiat currencies that represent old and new assets including euros, dollars, stocks, bitcoins, gold, and other forms of value tokens. 

Traders can trade these assets without much friction using the Lumens. 

Working mechanism

Stellar is a decentralized network of servers on blockchains. Each service runs independently. Therefore, there is an interconnection between the individual nodes, without any surveillance from a centralized source. 

The network will allow the transactions with the help of synchronization to reach a consensus. It allows the even distribution on the ledger. You can use the Stellar Consensus Protocol (SCP) to become a verification node or server. 

SCP or Stellar Consensus Protocol is the algorithm of the Stelar network to verify the transactions. It will allow the network to quickly scale the transaction without compromising the efficiency level. Theoretically, this network is more decentralized as it uses a very innovative element called the anchors. 

Anchors refer to the trusted entities that will be in charge of the deposits for people and hand out the credits in the expanding blockchain. The chief function of the anchors is to bridge the gap between Stellar blockchain and all the other digital assets. 

Features of Stellar Blockchain

if you are planning to invest in platforms like bitcoin primeyou should also consider the features of Stellar for making better decisions. 

  • The database of Stellar is decentralized as well as open source. The best part of user Stellar is that it can support thousands of transactions in every second, which is faster than most of the cryptocurrencies available in the market.  The time for confirmation of a transaction ranges between 3 and 5 seconds. The reason behind the quick working is the Consensus mechanism. 
  • Enables smart contracts and multiple signatures.
  • There is a fixed rate of inflation, which is 1% annually. 

The above information will certainly help you in choosing the right platform.

How does the Stellar payment system work?

It’s better to understand the mechanism through a practical example. 

Suppose A lives in the US while B stays in the UK. A wants to send USD 10000 to B for business purposes, which will convert to Pound Sterling or GBP. Now, how will this transfer happen? 

Now assume that A has an account with Bank X in the US while B has an account with Bank Y in the UK> and fortunately these two banks link to the Stellar network, functioning as anchors. 

Now see what happens.

A sends B the confirmed USD 10000. The transaction reaches bank Y in seconds to see whether B is compliant or non-compliant. The moment Bank X will receive approval from Bank Y, the deduction from A’s account will take place. 

The USD then enters the pool of Bank X and moves as XLM to the Stellar network. 

Once in the Stellar network, it will look for the best possible exchange rate for converting XLM to GBP. The money will the move into bank Y’s account and thus, Y’s account will show the credit. 

The entire operation shows how smooth and effective can be the working mechanism of the Stellar network.

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