If you are someone who is up-to-date with all the latest news about the world of digital asset trading, then you definitely know what Stellar is. Stellar is a cryptocurrency company whose digital currency prices are on the rise.
Stellar has a crypto asset called Stellar Lumens (XLM). Now, XLM is slowly becoming a digital asset that is starting to be eyed by many, including crypto enthusiasts in Indonesia. This is because XLM has a halal certificate.
Then, what exactly is Stellar? How does it work? What are the advantages to be gained by using this network?
What is Stellar?
What is Stellar is a computer network system with decentralized blockchain technology. This network system is open and can be accessed by anyone.
The Stellar Network was first released in 2015 by Jed McCaleb, David Mazières, and Joyce Kim. Previously, Jed McCaleb himself was one of the founders of Mt. Gox and the well-known crypto company, Ripple.
Jed left Ripple because he wanted to build a blockchain project that was free of charge and did not require bank intermediaries. Later, this blockchain can help people who don’t have bank accounts to still be able to send money across countries with transaction speeds in just seconds.
The main vision is to be a cross-border or cross-border payment solution that does not require bank intermediaries and has the ability to complete transactions in a very short time, namely five seconds. These transaction speeds are faster than the speeds on the Ethereum network.
Stellar’s existence is intended to provide transfer services for all forms of money into its own network or unify various financial systems. This project is also more community in nature so that the management is in the hands of the public and there is no governing authority.
Apart from that, Stellar also has a digital currency called Stellar Lumens (XLM) which costs less to trade in cross-border digital assets. Don’t get confused with Stellar and XLM because Stellar is a company while XLM is a crypto asset issued by a company.
How Stellars Work
After knowing what Stellar and XLM are, you also need to know about how the Stellar platform works. Basically, the way Stellar works is similar to most decentralized payment technologies. However, the most prominent differentiating factor between Stellar and Bitcoin is the consensus protocol.
Over time, Stellar underwent technical changes that made their token different from the others. The following is a description of how Stellar Lumens works after undergoing technical changes:
1. Consensus Protocol Used
The protocol of the Stellar platform is independent of the network of miners for the approval of transactions. Instead, this platform uses the Federated Byzantine Agreement (FBA) algorithm which allows for faster transaction processing.
The use of these algorithms is because they use a quorum slice or part of the network to approve and validate ongoing transactions.
2. Use of Nodes
Each node on the network will choose a set of trusted nodes. After the transaction is approved by all nodes in the set, the transaction is considered approved.
This streamlined process has made the Stellar network blazing fast. In particular, nodes on the network can be configured to function as observers, archives, basic validators, or full validators.
The following are the advantages and disadvantages of using the Stellar platform, including:
1. Decentralized system
Stellar is a network that operates on only a few servers or nodes and is not controlled by a single party. The absence of a centralized authority means that anyone can access this network.
2. Buku besar yang terdistribusi
Each node on the Stellar network keeps its own copy of the ledger and everyone is in sync.
3. Protokol Konsensus Stellar
When learning what Stellar is, you should also understand its consensus protocol. Consensus means that all parties must reach an agreement on a data so that it takes some time. However, the consensus protocol on the Stellar network only takes about 2-5 seconds.
4. Pertukaran distribusi
Users can place currency exchange offers in the ledger.
5. Transaksi multi-currency
This is the key advantage of the Stellar network. Users can send and receive payments in the desired currency. This is good because it breaks down existing transaction limits.
The Stellar network and currency are connected with Anchors (entities that hold and issue assets). Anchors have the responsibility to take deposits and use credits. Users should trust Anchors to honor deposit and withdrawal issues on their credit.
7. Antispam pada Koin XLM
One of the interesting advantages is its antispam feature. Antispam on XLM coins can prevent attacks from happening because there are thousands to millions of requests that come in at one time, causing delays in the transaction process.
Even if there are irresponsible people who want to do that, the funds owned by that person will automatically be drained before the attack damages the Stellar network.
8. Smooth trading and low transaction fees
Another advantage is its very low transaction fee, which is only 0.00001 Lumens.
In addition, trading crypto assets will become smoother and smoother. You can also easily exchange and convert XLM to fiat currency or other crypto assets.
Thus a complete explanation of what Stellar is and how it works. With the many advantages it offers and its halal guarantee, Stellar can be an option for those of you who are interested in getting involved in the crypto sector.