Stellar is a great platform for cryptocurrency operations that works in real-time. This cryptocurrency was created in 2014 as a Ripple fork. At first, this cryptocurrency worked on the base of Ripple cryptocurrency, but then developers created their own platform for cryptocurrency operations. This event was in 2015.
The first name of this cryptocurrency was Stellar or Start, then it was changed to Lumen. It also occurred in 2015. This cryptocurrency has all Ripple advantages, but there are no disadvantages of it. The financing of this cryptocurrency occurs via a Stellar Development Foundation. Now, this foundation is financed by the Stripe organization. This cryptocurrency got positive reviews both before moving to its own platform and after that. Now, this company collaborates with IBM. This fact makes it more credible. In 2018, this company had more successful ICOs than almost all other companies. Only Ethereum was more successful than the Stellar Foundation.
Why did they create their own platform?
There are a lot of reasons why the Stellar Foundation decided not to use the Ripple platform and start creating their own. First, there are many negative reviews of Ripple. Many people thought that this coin is totally centralized and the creators control all financial movements. That creates a dangerous situation when companies can steal money from their clients at any moment. A lot of people think that Ripple is the financial pyramid that will be closed in some time.
This situation was very inconvenient for users. The price of this cryptocurrency started falling. It was a reason why the company decided to open the source of this asset. Still, only a Ripple fork was considered as the best method of solving this problem and this fork was created. Ten months later, the Stellar platform was created.
The Stellar cryptocurrency platform rules
To avoid troubles associated with Ripple, Stellar Development Foundation created these rules:
- All operations need to be carried out via a non-profit organization. Creators aren’t able to get any income from the Foundation.
- All software is open. At the moment of launching, it worked using open-source Ripple protocol. Then, their open protocol was created. The foundation took the responsibility for keeping the protocol open all the time.
- There are no members that have more bonuses than others.
- The platform publishes different reports about their activity. For example, it is a report about the salary of workers, a report about distributed Lumens, etc. At this moment, you can find the statistics on Lumens on their official site. Also, you can understand how many people came from Facebook, financial reports, and a lot of other reports.
- Developers first determined how much money was generated at the start (100 billion coins), how much is generated every week (to maintain the manual inflation at 1% a year), and how much money was spent on the needs of the Foundation.
- Most of the coins have to be distributed completely for free. The only exception is the operation spendings that make up 5% of all Stellar coins. However, the Foundation has to maintain an equal distribution.
- A quarter of Lumens has to be spent on the needs of non-profit organizations.
- There is an agreement according to which counteragents with huge amounts of Lumens can’t sell them for 5 years.
To sum up, the creators of Lumen (Stellar) have done everything necessary to avoid competition as part of cryptocurrency operations.
Stellar Development Foundation
The Stellar Development Foundation was created in 2014. The people who consulted this foundation were very famous. Creating the platform isn’t the only activity of this company. Among the services provided by this Foundation are increasing the financial knowledge and creating applications and other services and instruments for cryptocurrency exchanging.
How does Stellar work?
Stellar is based on the open-source protocol (now Stellar XLM is called ‘Lumen’), which is very important for digital currency operations. The structure of transactions is like a Bitcoin or Ethereum blockchain. There are a lot of servers connected to the decentralized network. Each of them keeps information about transactions. Every transaction has to be confirmed by the other servers. This process is called ‘consensus’. It is carried out every 2-4 seconds. In this case, Stellar is the great Ethereum and Bitcoin analog.
Where is Stellar used?
Stellar isn’t such a famous cryptocurrency platform as Bitcoin, Ripple and Ethereum, but it is used for supporting the economics in developing countries. For example, it is used in the South part of Africa to cover spendings on the mobile phone. Also, it is used by microfinance organizations in Nigeria. The advantages of this cryptocurrency in comparison to Ethereum are:
- Easiness to use
- Lower price.
That’s why the prospects of Stellar are great. We recommend you invest in this token.