Stellar Lumens is a cryptocurrency that gives you the opportunities to perform instant transactions with a low commission. Stellar is a decentralized system, meaning no one can stop the network or secretly set up to their liking, but even without a central authority, the ledgers are checked and updated every five seconds.
At the primary level Stellar is a possession tracking system. Stellar is essentially a decentralized network of blockchain-based servers that operate independently. This means that it is distributed among all interconnected nodes of the Stellar network without control from a centralized source. The network is synchronized and reaches consensus, which allows you to distribute the registry evenly. The key element is that anyone can simply set up a verification node (server) with Stellar Core, where the verification process is carried out using the Stellar Consensus Protocol. Lumens (XLM) is the native cryptocurrency of Stellar. It performs some network functions, mainly it is used to pay users for transaction fees and acts as an intermediary, allowing users to trade between multiple currencies quickly, easily and at the lowest possible cost. For Lumens to work as it should, users must maintain a minimum XLS balance on their accounts. Cryptocurrency in a decentralized platform designed for the exchange of funds, acts only as a unit of exchange. In fact, XLM is an opportunity to exchange some assets for others. The Ripple consensus mechanism, which was originally a fork of the SL cryptocurrency, uses “Byzantine Fault Tolerance” (BFT). Its purpose is to keep the network operational, even if some of its nodes are disabled or captured by hackers. In Ripple, this problem is solved by full control of the validators by the main node, which goes against the idea of decentralizing blockchain networks. The POW consensus algorithm is not supported in Stellar. Mining of the Lumens cryptocurrency on computing equipment is not possible, the nodes are engaged in the creation of blocks.
A unique algorithm called the Stellar Consensus Protocol keeps everything in sync under control. The software used to power the star network is called Stellar Core, and it can be run in a variety of ways depending on the user's needs. In particular, nodes can be configured as “Observers”, “Archivers”,“Base Validators”, or “Full Validators”. This information is from site cryptodefix. Observers can only send transactions. Full validators, in contrast, participate in the Star Consensus protocol, voting on which transactions should be considered valid, and storing an archive of this history for other nodes.
After a user of the Stellar crypto network has independently launched a node (a transaction verification node), he must select trusted nodes with which he is ready to cooperate. Together, they form a “faction” that, after gaining a certain number of members, can become a “parliamentary majority” that controls the security of the system. The program code includes a complete freeze of the Stellar blockchain in case of inappropriate node behavior. The process of executing transactions and generating new blocks of SL cryptocurrency looks like this:
- The sender forms a transaction and it is immediately taken into operation by one of the active nodes.
- The node checks the balance of the sender's wallet, in order to avoid double spending, and passes the transaction to the next node.
- The last node participating in the verification writes the data to the blockchain, which is synchronized with other copies.
The operation is considered completed if 80 % of the validators came to an agreement in 5 seconds. The commission fee is distributed among all nodes that participated in the processing of the transaction.
The main advantages of Stellar:
- High transaction processing speed — unlike the first Bitcoin cryptocurrency, in the Stellar system, the transfer is sent directly to the validator. The money is credited to the recipient's account 5 seconds after the payment is created.
- Low power consumption-no mining, thanks to the implementation of the Stellar Consensus Protocol, the transaction verification process in the Stellar network is more energy efficient than with the Proof-of-Work (PoW) consensus algorithm).
- Easy access-XLM can be used for blockchain transactions in states where virtual assets are little known or are banned by the authorities.
- Equal rights of users and equal opportunities for all system participants.
- Support for all existing cryptocurrencies and synchronization with various financial systems.
- Security based on offline nodes and cryptographic encryption.