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Stellar is an open-source payment network that allows for the creation, trade, and sending of digital representations of currency in all its forms. Unlike physical money, the Lumen isn’t issued by central banks. This means governments don’t interfere with their activities. The Stellar Lumen is one of the best-performing and older forms of cryptocurrency.
History of Stellar
Stellar was founded by Jed McCaleb and is operated by the Stellar Development Foundation, a non-profit organization he and collaborator Patrick Collison founded. The foundation debuted on July 31st, 2014.
The initial funding for the Stellar Project came from the payment startup Stripe headed by Patrick Collison which offered $3 million. Stellar launched with 100 billion stellar. 25 Billion Stellars went to donors from the initial funding such as Google, Fast Forward and Black Rock. Stripe received 2 billion stellars as a return for the initial funding.
The name of the cryptocurrency was changed from Stellar to Lumens or XLM.
In 2014, Brazil’s first bitcoin exchange, Mercado Bitcoin, announced they would be using the Stellar network. Stellar had approximately 3 million users registered by January 2015.
Stellar’s Biggest Claim to Fame
In 2014, Stellar created the Stellar Consensus Protocol (SCP) making it an open-source system. Under the SCP, transaction authentication is left to a select group of nodes on the blockchain, where it is hosted, instead of a whole set of nodes. This shortens the approval cycle and allows for faster and cheaper processing of transactions.
The Lumen is a low-cost but legitimate form of crypto. It is a reliable and affordable cryptocurrency investment and is popular for it. Stellar stopped selling Lumens which has allowed for the value of the Lumen to rise, especially considering the Lumen is not a form of cryptocurrency that can be mined. The value of the Lumen depends on the number in circulation at any given time.
Stellar has several partnerships with big companies. Stellar tries to solve the real-world problem of high transfer fees which is encouraging bigger financial institutions such as Moneygram which can afford to partner with the cryptocurrency offered by Stellar since they seem to have a solid base they can work with, even though it is not especially profitable.
Criticism of Stellar
Jed McCaleb, the co-founder of Stellar, was involved in a lawsuit when he tried to sell off his stake in Ripple after he left the company, knowing a lawsuit was coming for the company. This does not reflect well on the company, so the value of the coin will drop drastically if he gets involved in another scandal.
Jed McCaleb was involved in a company that was hacked while he was in charge. The hack cost the company $460 million. This makes people weary of investing their money in a project he is involved in.
The Stellar foundation had over 100 billion lumens originally but they removed nearly half of them from circulation in November 2019. This was controversial since this kind of market manipulation is one of the things decentralized systems like cryptocurrency are supposed to prevent.
The Stellar Team
Jed McCaleb is a co-founder and chief technology officer of Stellar. He founded and served as the CTO of Ripple until 2013. He co-founded the Stellar Development Foundation in 2014 to develop the Stellar open-source protocol which allowed cross-border monetary transactions.
Joyce Kim is a co-founder and executive director of Stellar. She started her career as a lawyer. She co-founded Simplehoney, a mobile commerce startup, in 2011. She was Vice Chairperson at Freestyle Capital before she joined McCaleb as co-founder of Stellar.
Conclusion
Stellar is more of a money transfer platform than it is a crypto platform. Crypto is a means to transfer money for the company and not the essence of the company.
This is the official HackerNoon wiki for Stellar. As part of our coin price pages, this living wiki displays on Stellar crypto price page. If you’d like to suggest edits to our official Uniswap wiki, please submit them in the comment field below, a real human editor will read and review your suggestions for accuracy and publication.