What is Stellar (XLM)?


Stellar aims to facilitate fast, low-cost transactions and connect individuals, institutions and payment systems globally. Launched in 2014 by Jed McCaleb and Joyce Kim, Stellar’s self-proclaimed mission is to promote financial inclusion and efficiency by providing a platform for seamless movement of various asset types.
What is the cryptocurrency of Stellar?
The cryptocurrency of the Stellar blockchain is called Lumens, denoted by the symbol XLM. Lumens (XLM) facilitates fast and low-cost transactions across borders. The cryptocurrency performs a critical role by serving as a bridge currency for facilitating multi-currency transactions and providing liquidity between different currencies.
XLM is used for various applications within the Stellar ecosystem, including decentralised exchanges, remittances and micropayments. XLM also prevents spam on the network by imposing a minimal transaction fee.
Who created Stellar?
Stellar was created in 2014 by co-founders Jed McCaleb and entrepreneur and investor Joyce Kim. McCaleb is well known for his involvement in the founding of the Mt. Gox exchange, and being the co-founder of the Ripple network, but later left to start the Stellar Development Foundation. McCaleb is known for his contributions to various blockchain projects and is considered one of the pioneers in the industry.
How does Stellar work?
The Stellar networks operations are centred around its unique consensus mechanism called the Stellar Consensus Protocol (SCP). SCP is based on the Federated Byzantine Agreement (FBA), a model designed to achieve consensus among decentralised nodes in a network.
In the Stellar network, nodes, or validators, work together to validate transactions by forming groups known as quorum slices. These slices overlap with each other at points called quorum intersections, ensuring agreement on transaction validity. This method simplifies validation, removing the need for resource-intensive mining and resulting in a highly efficient and cost-effective network.
In practical terms, let’s consider a scenario where a business needs to transfer a large amount of money across borders. Using the Stellar network, a business could tokenize the money into stablecoins representing the cash value and transfer them to the recipient on the other side of the world. The transaction would be validated quickly and securely at a very low cost.
The Stellar Development Foundation
The Stellar Development Foundation is a non-profit organisation established to support the development and adoption of the Stellar network. Its mission is to achieve equitable access to the global financial system through blockchain technology. The Foundation’s belief is that today’s financial system isn’t inclusive enough, and that an open, decentralised network like Stellar can change it for the better.
The foundation is responsible for maintaining and enhancing the Stellar protocol, supporting developers building on the Stellar network, fostering partnerships and advocating for regulatory clarity and innovation in the financial industry.
Useful tools
Stellar website
Stellar blog
Stellar on X
*Investing in cryptocurrency may result in the loss of capital as the value can fluctuate.