Stellar Lumens in a Nutshell
what's up everyone welcome to CryptoCoin Geek. Today I want to talk about stellar and stellar lumens. we'll start off of what the stellar project is, and how they're trying to be different from everything else.
then I'm going to talk about their Vantage's and disadvantages of system, and if I'm gonna talk about stellar lumens or token that they're using.
let's start off with what is stellar and what is trying to achieve.
it's trying to use cryptocurrencies to do very fast payments with low fees.
if you look at the key advantages of stellar it has a three to five second conformation time.
it also supports thousands of transactions per second.
so that's a little bit different from Bitcoin which has a approximately ten minute conformation time, and Bitcoin doesn't support as many transactions as stellar does.
stellar uses something else so it can't use the same mechanism that Bitcoin uses, which is called proof of work.
stellar uses something else is called the SCP, the stellar consensus protocol. this all sounds a little bit familiar.
this kind of fast confirmation time and fast many contraction per second, and you're thinking about something called ripple, then you're right, because stellar is actually based on repose code it's actually fork off ripple and happened around 2014.
it kind of originated from ripple and kind of deviated from that and changed.
is a little bit of controversy surrounding this and I do want to cover that in a little bit later.
I just want to talk about the key advantages of stellar first so it doesn't use mining it's not mine above all stellar lumens are created from the start.
if you look at your white paper what they're trying to claim is that they're trying to claim that this kind of protocol mechanism is better than Bitcoin.
mostly because it still keeps its decentralization but it has low latency flexible trust, and better security.
of course not everyone believes their so this is kind of one-sided part of their white paper. the thing with proof of work is that it is truly decentralized and miners are incentivized by rewards to mine.
be honest the thing is with the seller consensus protocol it is something new and different, and it uses a different trust mechanism.
kind of the network chooses to trust itself or not but it doesn't have mining it doesn't have a reward or a lack of reward rather if you choose to be dishonest.
this is something that is a little bit different and a little bit different way of kind of doing things there is a little bit of a sacrifice in my opinion.
my personal opinion is that sacrifices a little bit of the decentralization for speed and efficiency.
there's always trade-offs in crypto currencies I just want to make that very clear that every mechanism has its you know advantages and disadvantages.
the SCP the seller mechanism does have some advantages because it's fast but, of course there are people that can definitely argue that because it's not mineable because there's no mining mechanism here.
and or incentive to be a miner or part of a node.
then it's not as secure as Bitcoin.
so we talked about how stellar has fast confirmations and supports many transaction for a second.
so what are the applications of stellar.
well, the applications are for micro payments and cross-border transfer. for example remittances and also something like mobile money.
difference between ripple and stellar stellar is more open source.
it's more trying to engage the community it was ripple was more close source and target systems like banks.
so here we have recently stellar and IBM announced a partnership to solve cross-border payments.
this is a huge issue if you guys remember.
systems that are currently in place for example, Swift or using traditional institutions require a lot of time and high fees.
and then something that stellar lumens try to solve because you can transfer these tokens really quickly between countries and it's kind of nation less.
transfer anywhere across the world takes the same amount of time.
so that's a key advantage of using this system.
IBM and steller are trying to develop the system, and trying to improve it.
so that there's like 12 currency corridors you can transfer currencies between for example New Zealand and a United Kingdom.
they're trying to get different parties on board. of course they need a lot of liquidity providers to do this and they're still in the process of working this out.
I'll talk about this token in a later a second as well. so the protocol itself is all about fast transactions and about many transactions.
basically this kind of instantaneous and real-time transactions.
because five seconds to six seconds delay isn't that long. now let's talk a little bit about the lumens as well.
the lumens is the native kind of currency and atthe native acid of the stellar Network.
So we talked about how stellar is the protocol of all the lumens are the tokens that you're sending. the tokens are like Bitcoin and there's a lot of these tokens around.
a hundred billion of these tokens are created.
it's called um you know community will call this pre mined.
in a sense that this was created by the company and then were issued out during various air drops.
so people that were, you know, taking part of the air drops could claim stellar lumens for free and that was a way to distribute these stellar lumens to Bitcoin holders.
currently at this point six point nine nine billion tokens have been distributed so far.
but that's a little bit quite a little bit shy of the 100 billion that were created.
in terms of how transactions work it's very similar to the ripple Network there's a very small amount of fee associated to with sending steller lumens.
and the fee is mostly to prevent the network from spam attack. so there's a minor fee associated with everything.
account holders must hold a minimal balance of 20 lumens.
it's not really a lot of lumens that they have to hold to use this network. if you're using this as remittance I think it suffers the kind of the same advantages and disadvantages of ripple..
if you think about you know buying lumens or buying ripple in general. it's meant to be an intermediary currency.
unless people really want to hold on for it for a long term there's really this design around it it's really to just facilitate a transfer and once transfer is done then it'll be released back into the network so you don't really need that much to have a very kind of network.
so lastly I want to talk about ripple versus stellar lumen because this has been a huge debate since 2014.
seller has been for from ripple and it was developed by someone that was part of the original ripple team.
however there has been criticism on both sides about each other's network.
so they were just you know, stellar has been talking about how after they forked off ripple.
they made various improvements that change, you know, consensus code how the ripple network gains consensus.
and there's claiming that these changes are because of a core bug, core issues in ripple system. but ripple has since then reply to that, and says that.
the forking issue doesn't affect ripple and that ripple is not really bugged out. it seems like there is a mini war between ripple and stellar to claim which one is better and bug free.
The cool thing is that you can judge this for yourself.
if you used to get huh both ripple and stellar have their sources code on github.
I don't love to hear your opinion on this debate as well.
whether you think stellar is a better
mechanism then ripple.
or if ripple is better. so I'd love to hear your opinions
and kind of discuss this.
thank you so much for reading this quick summary of stellar lumens.
if you want additional things to be added, I would love to hear them below as well, and maybe can make additional more advanced article covering stellar lumens. as well thank you guys so much
for reading this blog, see you next time.
 |
| stellar lumens |
let's start off with what is stellar and what is trying to achieve.
it's trying to use cryptocurrencies to do very fast payments with low fees.
if you look at the key advantages of stellar it has a three to five second conformation time.
it also supports thousands of transactions per second.
so that's a little bit different from Bitcoin which has a approximately ten minute conformation time, and Bitcoin doesn't support as many transactions as stellar does.
stellar uses something else so it can't use the same mechanism that Bitcoin uses, which is called proof of work.
stellar uses something else is called the SCP, the stellar consensus protocol. this all sounds a little bit familiar.
this kind of fast confirmation time and fast many contraction per second, and you're thinking about something called ripple, then you're right, because stellar is actually based on repose code it's actually fork off ripple and happened around 2014.
it kind of originated from ripple and kind of deviated from that and changed.
is a little bit of controversy surrounding this and I do want to cover that in a little bit later.
I just want to talk about the key advantages of stellar first so it doesn't use mining it's not mine above all stellar lumens are created from the start.
if you look at your white paper what they're trying to claim is that they're trying to claim that this kind of protocol mechanism is better than Bitcoin.
mostly because it still keeps its decentralization but it has low latency flexible trust, and better security.
of course not everyone believes their so this is kind of one-sided part of their white paper. the thing with proof of work is that it is truly decentralized and miners are incentivized by rewards to mine.
be honest the thing is with the seller consensus protocol it is something new and different, and it uses a different trust mechanism.
kind of the network chooses to trust itself or not but it doesn't have mining it doesn't have a reward or a lack of reward rather if you choose to be dishonest.
this is something that is a little bit different and a little bit different way of kind of doing things there is a little bit of a sacrifice in my opinion.
my personal opinion is that sacrifices a little bit of the decentralization for speed and efficiency.
there's always trade-offs in crypto currencies I just want to make that very clear that every mechanism has its you know advantages and disadvantages.
the SCP the seller mechanism does have some advantages because it's fast but, of course there are people that can definitely argue that because it's not mineable because there's no mining mechanism here.
and or incentive to be a miner or part of a node.
then it's not as secure as Bitcoin.
so we talked about how stellar has fast confirmations and supports many transaction for a second.
so what are the applications of stellar.
well, the applications are for micro payments and cross-border transfer. for example remittances and also something like mobile money.
difference between ripple and stellar stellar is more open source.
it's more trying to engage the community it was ripple was more close source and target systems like banks.
so here we have recently stellar and IBM announced a partnership to solve cross-border payments.
this is a huge issue if you guys remember.
systems that are currently in place for example, Swift or using traditional institutions require a lot of time and high fees.
and then something that stellar lumens try to solve because you can transfer these tokens really quickly between countries and it's kind of nation less.
transfer anywhere across the world takes the same amount of time.
so that's a key advantage of using this system.
IBM and steller are trying to develop the system, and trying to improve it.
so that there's like 12 currency corridors you can transfer currencies between for example New Zealand and a United Kingdom.
they're trying to get different parties on board. of course they need a lot of liquidity providers to do this and they're still in the process of working this out.
I'll talk about this token in a later a second as well. so the protocol itself is all about fast transactions and about many transactions.
basically this kind of instantaneous and real-time transactions.
because five seconds to six seconds delay isn't that long. now let's talk a little bit about the lumens as well.
the lumens is the native kind of currency and atthe native acid of the stellar Network.
So we talked about how stellar is the protocol of all the lumens are the tokens that you're sending. the tokens are like Bitcoin and there's a lot of these tokens around.
a hundred billion of these tokens are created.
it's called um you know community will call this pre mined.
in a sense that this was created by the company and then were issued out during various air drops.
so people that were, you know, taking part of the air drops could claim stellar lumens for free and that was a way to distribute these stellar lumens to Bitcoin holders.
currently at this point six point nine nine billion tokens have been distributed so far.
but that's a little bit quite a little bit shy of the 100 billion that were created.
in terms of how transactions work it's very similar to the ripple Network there's a very small amount of fee associated to with sending steller lumens.
and the fee is mostly to prevent the network from spam attack. so there's a minor fee associated with everything.
account holders must hold a minimal balance of 20 lumens.
it's not really a lot of lumens that they have to hold to use this network. if you're using this as remittance I think it suffers the kind of the same advantages and disadvantages of ripple..
if you think about you know buying lumens or buying ripple in general. it's meant to be an intermediary currency.
unless people really want to hold on for it for a long term there's really this design around it it's really to just facilitate a transfer and once transfer is done then it'll be released back into the network so you don't really need that much to have a very kind of network.
so lastly I want to talk about ripple versus stellar lumen because this has been a huge debate since 2014.
seller has been for from ripple and it was developed by someone that was part of the original ripple team.
however there has been criticism on both sides about each other's network.
so they were just you know, stellar has been talking about how after they forked off ripple.
they made various improvements that change, you know, consensus code how the ripple network gains consensus.
and there's claiming that these changes are because of a core bug, core issues in ripple system. but ripple has since then reply to that, and says that.
the forking issue doesn't affect ripple and that ripple is not really bugged out. it seems like there is a mini war between ripple and stellar to claim which one is better and bug free.
The cool thing is that you can judge this for yourself.
if you used to get huh both ripple and stellar have their sources code on github.
I don't love to hear your opinion on this debate as well.
whether you think stellar is a better
mechanism then ripple.
or if ripple is better. so I'd love to hear your opinions
and kind of discuss this.
thank you so much for reading this quick summary of stellar lumens.
if you want additional things to be added, I would love to hear them below as well, and maybe can make additional more advanced article covering stellar lumens. as well thank you guys so much
for reading this blog, see you next time.
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