It's a cryptocurrency that is not so commonly known about by the broad market, but Stellar has managed to really set itself apart from other altcoins, occasionally making the list of investors and analysts as a top pick for altcoin of the year.
With a market cap of $1.6 billion, Stellar remains connected to the greater pack of altcoins, but holds some considerable potential. Well, that's all well and good, but what on earth is it, exactly? And what would people, developers, companies, etc. use it for?
Without further ado, let's dig into the Stellar blockchain solution.
The Stellar blockchain, in a similar fashion to Bitcoin SV, Litecoin and Ethereum Classic (among others) actually started off its life as a hard fork of the 'controversial' Ripple blockchain (which will be discussed).
Anyone that knows anything about Ripple will get an immediate summary understanding of what Stellar, and its masterminds (Jed McCaleb and Joyce Kim) entails for its users. And, according to its website, it gets made all the more straight forward for those curious:
In general, it operates as "a platform that connects banks, payments systems, and people. Integrate to move money quickly, reliably, and at almost no cost."
The decision to break off from Ripple is more than just a technical choice on the part of McCaleb. He began his career by establishing the digital asset exchange Mt. Gox back in 2006 before selling it on to Mark Karpeles and moving on to found the Ripple Network in 2011.
The underlying concept behind Ripple was to offer a decentralized, cross-border payment solution without the need for a pool of miners to support its ecosystem. With such a robust system and concept in place, why did McCaleb up and leave?
Well, things turned sour over the years between McCaleb and the Ripple team thanks to a string of disagreements between himself and the broader board. This was further exacerbated by the fact that the two had come to blows over McCaleb's own stash of XRP. The creator and CTO of Ripple sought to sell off his entire reserve, while the Ripple board refused to allow his sale for fear that it would cause a meltdown of its value.
With these disagreements out in the air, McCaleb resolved to establish the Stellar Development Foundation with its eventual advisory board of Keith Rabois, Patrick Collison, Matt Mullenweg, Greg Stein, Joi Ito, Sam Altman, Naval Ravikant and others.
While the relationship between McCaleb and Ripple ended on a poor note. He didn't see anything wrong with the underlying architecture of the network itself, using it as the foundation for Stellar.
One of the ways that Stellar has an added advantage for users is that it has absolutely no need for miners in order to either validate transactions or even exist in the network. This allows for a couple of things; the first being that the chain's token (known as 'Lumen') is a pre-mined asset. In addition to this, there is a large volume of them in circulation and a total of 100 billion of them.
It also brings with it an immediate amount of legitimacy and trust as a product. Having Deloitte, IBM and Stripe as some of its inaugural partners when it was first launched in 2014.
Stellar also comes with a series of innovative features for security and greater flexibility. Such as Multisigniture solutions, along with Smart Contracts. Allowing businesses to make use of it for settling transactions and documentation, while having a substantial amount of security.
Along with having an allegedly rapid transaction speed of 3 to 5 seconds. Which is a stand-out from Ethereum and Bitcoin, but it manages to outmanoeuvre Ripple by providing a flat rate for every 300,000 transactions on the network. Meaning that $0.01 pays for that whole amount, while the network has the scale to support over 3,000 transactions according to the team.
While there are no miners to validate transactions and activities on Stellar, the network makes use of its own dedicated consensus protocol. Known as a Federated Byzantine Agreement, which provides a range of benefits for users of all kinds, including: