What is Stellar Lumens?

  • Stellar is an open-source network with the mission to “create equitable access to the worldwide financial system”. Stellar is maintained by the Stellar Development Foundation, a non-profit organization established in 2014.
  • Its goal is to create a worldwide financial infrastructure that creates it easy to maneuver traditional sorts of money and access new markets. This goal is realised by faciliating transactions of digital representations of currencies (such as USD, EUR, BTC, etc) on one ledger.
  • Stellar uses the Stellar Consensus Protocol for achieving network consensus, which is predicated on Federated Byzantine Agreement. Stellar provides various Software Development Kits and APIs to form building on and using Stellar as accessible as possible.
  • Stellar’s token, the Lumen (XLM), is employed for staking and constitutes the payment method for all services the system provides.


Stellar is an open-source network for currencies and payments. Stellar makes it possible to make , send and trade digital representations of all sorts of money—dollars, pesos, bitcoin, just about anything. It’s designed so all the world’s financial systems can work together on one network.

Stellar has no owner; if anything it’s owned by the general public . The software runs across a decentralized, open network and handles many transactions every day . Like Bitcoin and Ethereum, Stellar relies on blockchain to stay the network in sync, but the end-user experience is more like cash—Stellar is far faster, cheaper, and more energy-efficient than typical blockchain-based systems.

What is Stellar for?

The Stellar network launched in 2015. Since then it’s processed quite 450 million operations made by over 4 million individual accounts. Large enterprise companies and corporations as small as single-dev startups have chosen Stellar to maneuver money and access new markets.

From the start , Stellar has been cryptocurrency-adjacent, but the software has always been intended to reinforce instead of undermine or replace the prevailing economic system . Whereas, say, the Bitcoin network was made for trading only bitcoins, Stellar may be a decentralized system that’s great for trading any quite money during a transparent and efficient way.

The Stellar network features a native digital currency, the lumen, that’s required in small amounts for initializing accounts and making transactions (you can read more that here) but, beyond those requirements, Stellar doesn’t privilege any particular currency. It’s specifically designed to form traditional sorts of money—the money people are spending and saving for centuries—more useful and accessible.

For example, here’s what you’ll do with Stellar. you’ll create a digital representation of a U.S. dollar—on Stellar you’d call this a “dollar token”—and you’ll tell the planet that whenever someone deposits a standard dollar with you, you’ll issue them one among your new tokens. When someone brings that “dollar token” back to you, you promise to redeem it successively for one among the regular dollars therein time deposit account . Essentially, you found out a 1:1 relationship between your digital token and a standard dollar. all of your tokens call at the planet is backed by the same deposit. So while people hold the tokens, they will treat them a bit like traditional money, because they know that they’re exchangeable for traditional money within the end.


This might sound unexceptional—issuing electronic credits for dollars is essentially what any local American bank does thousands of times each day . But during a global system this 1:1 promise of a token for a currency has important implications. as an example regardless of how a token moves through the economy, the underlying dollars never leave that checking account within the us . So suppose someone loans their tokens to somebody else , who then uses them to shop for a car. No bank has got to settle the acquisition or approve the loan. And furthermore, it doesn’t matter if the vendor of the car lives in Mexico or Singapore or anywhere, they will still own the tokens and may trade them however they please. The Stellar network makes money borderless.

Digital dollar tokens also mean people everywhere the planet can own, buy, and sell the worth of a dollar without themselves having a U.S. checking account . A Venezuelan can hold a number of his family’s net worth in dollars. A Filipino expat can send dollars back home, and therefore the recipient can hold them, safely and digitally, until she’s able to exchange. An American company pays a Mexican vendor in dollars, and therefore the vendor pays its suppliers successively , with a five-second, instead of a five-day, wait to settle. Because the dollars represented by the digital token never actually move because the value changes hands, these transactions sidestep the friction and expense of the present banking industry .

This exact dollar token example is actually survive Stellar immediately , implemented by a corporation called AnchorUSD—thousands of dollars useful moves quickly and cheaply through their USDx token every day . Of course, Stellar works for any currency, not just dollars. And once you add peso tokens, naira tokens, yuan tokens, pound tokens, bitcoin tokens, euro tokens and everything else, you’ve got a very unified medium of exchange that keeps the simplest parts of what exists today.

Who builds on Stellar?

For end-users, Stellar may be a fast, efficient network for trading, saving, and spending digital money. For builders, it’s open financial infrastructure. Anyone can access it; there’s no permission or application needed. That basket of currency tokens we just mentioned, those are on the network, able to use. we’ve euros, bitcoins, dollars, Mexican pesos, Argentinian pesos, Brazilian reais, and Nigerian naira. Their respective issuers handle deposit, redemption, and compliance, so builders can specialise in end-user experience. This same openness also applies to the token layer: a financial organization can issue new digital tokens to fill a market need, say, for Swiss Franc, without joining a proprietary “association” or handling a gatekeeper. the entire power of Stellar grows with each new company and developer. See our robust SDKs and documentation to urge started together with your own wallet, app, or token.


The ongoing development of the essential Stellar technology is guided and supported by the Stellar Development Foundation, a non-profit company based within the U.S. the inspiration helps maintain Stellar’s codebase, supports the engineering and business communities around Stellar, and may be a speaking partner to regulators and institutions. the inspiration has no shareholders, so it are often purely dedicated to the success of Stellar as a neutral, equitable, and public network.

Transparency may be a tenet of the network. Stellar’s code is open-source and available to anyone’s audit or contribution. Many of SDF’s current employees were first inspired to urge involved the technology in their free time or for his or her own projects.

How does Stellar work?

At rock bottom level, Stellar may be a system for tracking ownership. Like accountants have for hundreds of years , it uses a ledger to try to to so, but Stellar’s innovation is that there’s no actual accountant. Instead there’s a network of independent computers each checking and rechecking the work of the others. Stellar may be a system without a central authority—meaning nobody can stop the network or secretly adjust the numbers to his liking—yet even without a central authority the ledgers are verified and updated, every five seconds.

A unique algorithm, called the Stellar Consensus Protocol (SCP), keeps everything in sync. There are some ways to urge agreement across a decentralized system—Bitcoin’s visionary proof-of-work method was the primary and remains the foremost famous. But, like many first drafts, proof-of-work left room for improvement. SCP strives to be better by being configurable, fast, and highly energy efficient. If you’re curious about the deep details, you can read the peer-reviewed paper, published by SOSP, the oldest and most prestigious systems conference, for complete technical details.

For every account holder, Stellar’s ledger stores two important things: what they own (account balances, like “100 pesos tokens” or “5000 lumens”) and what they need to try to to with what they own (operations, like “sell 10 dollar tokens for 50 lumens” or “send 100 peso tokens to such-and-such account”.) Every five seconds, all the balances and every one the operations are broadcast to the whole network and resolved.

The computers that run the core Stellar software and thus publish and check the ledger are called nodes. So, once you send someone a euro token on a Stellar-built app, the nodes make sure the right balances were debited and credited, and every node makes sure every other node sees and agrees to the transaction. the present Stellar network is verified by many nodes across the globe; the nodes and the way they convey is public information, and anyone can install the Stellar software and join the consensus process. this is often different than how accounting works at, say, a bank, where one corporation unilaterally decides what happens, more or less secretly .

Right above this core layer sits a strong API in order that to create on Stellar you don’t need to understand the particulars of distributed consensus. Simple, well-documented functions allow you to maneuver new digital money using models that you’re wont to . It’s very easy to trade tokens between accounts, make markets, and issue assets.

Where is Stellar going?

To put it very simply, Stellar enables a future where everyday people can send money anywhere affordably and quickly. We at the Stellar Development Foundation believe we will only unlock truth power of the fashionable digital economy when value can flow unencumbered round the globe. That’s what Stellar is for, and that’s what Stellar goes to try to to .

About author

Experienced Founder with a demonstrated history of working in the newspapers industry. Skilled in Data Research, Management, Investment Research, Teamwork, and Leadership. Influencing the technology, people, and technical analysis of the Cryptocurrency and Blockchain world.
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