![]() One of the most interesting applications of the Stellar network, however, is not the most widely promoted features of the platform. To achieve this Stellar uses a unique consensus protocol that, according to a recent presentation given by Stellar Lightyear Program manager Lindsay Lin, can support up to 1,000 transactions per second with 1 billion accounts. To appeal to centralized financial platforms and enterprise organizations, Stellar is highly regulatory compliant and boasts a real-time settlement of 2-5 seconds. Stellar allows these organizations to leverage its network to reduce transaction and remittance costs, manage micropayments, and increase reach through mobile branches. While Stellar offers advantages to everyday users, enterprise organizations, banks, and financial institutions are positioned to gain the most from the system it proposes. In this regard, Stellar is deeply embedded with centralized financial institutions, as it relies upon them to hold user capital and honor withdrawals.Īs such, Stellar isn’t a truly decentralized platform, as centralized organizations are critical to its core function, but it does hold the potential to improve the current international inter-bank payment system significantly. This credit is issued by “anchors,” or financial institutions that function as “bridges” between fiat currencies and the stellar network. Rather than use a standalone cryptocurrency to transfer value over international borders, Stellar would have users transmit fiat-equivalent credit over the stellar blockchain. The core function of Stellar for everyday uses is streamlined low-cost international remittance. Stellar’s approach to creating a common international financial platform is decidedly egalitarian - instead of focusing on either side of the finance centralization/decentralization debate, Stellar adopts a bipartisan stance that simultaneously provides solutions to the centralized banking system and expands access to low-cost financial services to the unbanked and underbanked. Stellar presents itself as the “future of banking,” and intends to address the gaps that currently exist between the disparate closed system that compose current international financial markets. Stellar is a blockchain platform that is primarily focused on integrating distributed ledger technology into existing financial infrastructure. To develop a nuanced perspective on Stellar, it’s necessary to cut through the technical complexity of the project and understand how Stellar does what it does, and why. The Stellar network is an extensive, complicated system, however. Proponents, however, highlight the impressive transaction capacity of the network, its strong partnerships, and the potential Stellar shows for furthering cryptocurrency adoption. The Stellar project is a divisive subject within the blockchain community - opponents of the platform argue that the architecture of Stellar is not truly decentralized, and thus the project is antithetical to the core axioms of distributed ledger technology. Stellar is notable for its unique consensus method - the Stellar Consensus Protocol, which uses a federated byzantine agreement model that is wholly unique in the blockchain ecosystem and defies definition as a “blockchain” in a traditional sense. Rather than create an entirely new financial model, Stellar is focused integrating within the current financial ecosystem - delivering the benefits offered by blockchain technology while working in coordination with existing banks and payment gateways. The Stellar network is a pragmatic blockchain project that aims to function as a bridge between the opposing worlds of cryptocurrency and traditional centralized financial institutions. Stellar Lumens is a free, open-source network that lets anyone build low-cost financial products for their community. While libertarian ideologues may focus on cryptocurrencies as an engine of creative destruction that directly challenges incumbent financial infrastructure, it’s possible that distributed ledger technology does not necessarily need to eschew the system it will eventually replace entirely. ![]() The disruptive nature of cryptocurrency is self-evident, offering the world an alternative to the existing financial paradigm that has governed the transfer and storage of value for centuries. ![]()
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