Stellar (payment network)

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File:Stellar (payment network) logo.svg
Original author(s) Jed McCaleb, Joyce Kim
Developer(s) Stellar Development Foundation
Initial release 2014
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Development status Active
Written in C++, Go, JavaScript, Java, Python, Ruby, Shell
Type Real-time gross settlement, currency exchange, remittance, blockchain, cryptocurrency

Stellar is an open-source protocol for value exchange founded in early 2014 by Jed McCaleb (creator of eDonkey) and Joyce Kim. Its board members and advisory board members include Keith Rabois, Patrick Collison, Matt Mullenweg, Greg Stein, Joi Ito, Sam Altman, Naval Ravikant and others.[1][2][3][4][5][6] The Stellar protocol is supported by a nonprofit, the Stellar Development Foundation.[7][8][9][10][11][12]

Design[edit | edit source]

Stellar is an open-source protocol for exchanging money.[13] Servers run a software implementation of the protocol, and use the Internet to connect to and communicate with other Stellar servers, forming a global value exchange network. Each server stores a record of all “accounts” on the network. These records are stored in a database called the “ledger”. Servers propose changes to the ledger by proposing “transactions”, which move accounts from one state to another by spending the account’s balance or changing a property of the account. All of the servers come to agreement on which set of transactions to apply to the current ledger through a process called “consensus”. The consensus process happens at a regular interval, typically every 2 to 4 seconds. This keeps each server’s copy of the ledger in sync and identical.[14][15][16] The Stellar network has been winning some ICO's over the Ethereum network due to some of the drawbacks of Ethereum[17][18]

Real-world applications[edit | edit source]

Nonprofit organizations and businesses are implementing Stellar as their financial infrastructure, particularly in the developing world. One such example is Praekelt Foundation.[19][20][21][22]

Oradian, a cloud-based banking software company, also plans to use the Stellar network to connect microfinance institutions (MFIs) in Nigeria.[23][24]

In December 2016, more partnerships were announced, including in the Philippines, India and West Africa.[25][26]

In the month of October 2017, Stellar and IBM created a partnership to increase the speed of global payments.[27]

In 2018, Stellar announced their affiliation with Keybase to eliminate the need of extended cryptographic addresses for international transactions.[28]

In March 2018, the DigitalBits Project announced that they had forked the Stellar software to support the loyalty and rewards market as their initial use case.[29]

History[edit | edit source]

At launch, Stellar was based on the Ripple protocol. After making several changes to critical consensus code, the Stellar network forked. In the aftermath, Stellar co-founder Joyce Kim claimed[30] this was a flaw in the Ripple protocol but this statement was challenged in a blog post by Ripple Labs CTO, Stefan Thomas.[31]

The Stellar Development Foundation then created an updated version of the protocol with a new consensus algorithm, based on entirely new code. The code and whitepaper for this new algorithm were released in April 2015, and the upgraded network went live in November 2015.[32][33][34][35][36][37]

In September 2017, Stellar has announced it will award partners in its new benefits program up to $2 million USD worth (in XLM tokens) each to develop “high-impact projects.”[38]

In October 2017, IBM and payments network KlickEx have announced Stellar as the backbone of its new “cross-border payments solution.”[39]

References[edit | edit source]

  1. Michael Casey; Paul Vigna (31 July 2014). "Mt. Gox, Ripple Founder Unveils Stellar, a New Digital Currency Project". Wall Street Journal. Retrieved 3 September 2014. 
  2. Cade Metz; Marcus Wohlson (6 August 2014). "New Digital Currency Aims to Unite Every Money System on Earth". Condé Nast. Retrieved 3 September 2014. 
  3. Roberto Baldwin (1 August 2014). "What you need to know about Stellar, the new open-source solution to international currency exchange". The Next Web. Retrieved 23 April 2015. 
  4. Michael del Castillo (27 February 2015). "Matt Mullenweg: bitcoin only used twice a week in 2014, offers free subscriptions if you do". Upstart Biz Journal. Retrieved 20 November 2015. 
  5. Michael del Castillo (5 August 2014). "Stripe takes on bitcoin with rival digital currency Stellar". The Irish Times. Retrieved 20 November 2015. 
  6. Mario Cotillard (5 August 2015). "Digital Currency Startup Stellar Adds Ex-Stripe CTO Greg Brockman To Board". Brave New Coin. Retrieved 20 November 2015. 
  7. Jillian D’onfro (31 July 2014). "PayPal's Cofounder Is Supporting A New Non-Profit That Will Tackle The Vision PayPal 'Never Accomplished'". Business Insider. Retrieved 23 April 2015. 
  8. Kim-Mai Cutler (31 July 2014). "Stripe Backs Non-Profit Decentralized Payment Network Stellar, From Mt. Gox's Original Creator". TechCrunch. Retrieved 23 April 2015. 
  9. JP Mangalindan (31 July 2014). "New Bitcoin challenger launches". Fortune. Retrieved 23 April 2015. 
  10. "Stellar Mandate". 31 July 2014. Retrieved 23 April 2015. 
  11. "Certificate of incorporation of Stellar Development Foundation Non-stock Corporation" (PDF). Retrieved 23 April 2015. 
  12. Jacques Coetzee (5 May 2015). "Could Stellar be the answer to enable financial inclusion around the globe?". Memeburn. Retrieved 20 November 2015. 
  13. "". Retrieved January 14, 2015. 
  14. "How it works". Retrieved January 14, 2015. 
  15. Tom Simonite (8 April 2015). "A New Competitor for Bitcoin Aims to Be Faster and Safer". MIT Technology Review. Retrieved 20 November 2015. 
  16. Giulio Prisco (17 April 2015). "The New Stellar Consensus Protocol Could Permit Faster and Cheaper Transactions". Bitcoin Magazine. Retrieved 20 November 2015. 
  17. Kai, Sedgwick. "Report Claims 34,000 Ethereum Smart Contracts Are Vulnerable to Bugs". Bitcoin News. Retrieved 24 April 2018. 
  18. "Stellar XLM Secret Weapons for 2018". Crypto Recorder. 2018-03-26. Retrieved 2018-03-27. 
  19. Biz Carson (5 February 2015). "Stellar, South African nonprofit to bring digital savings to young girls". GigaOm. Retrieved 23 April 2015. 
  20. Leo Mirani (6 February 2015). "Platforms, not products, are the way to bring financial services to the poor". Quartz. Retrieved 23 April 2015. 
  21. Tom Simonite (20 February 2015). "Bitcoin-Inspired Digital Currency to Power Mobile Savings App". MIT Technology Review. Retrieved 23 April 2015. 
  22. Hans Lombardo (2 February 2015). "Non-Profit Foundation Uses Stellar Protocol to Improve Economic Security of South African Girls". All Coins News. Retrieved 23 April 2015. 
  23. Karen Webster (2 March 2015). "Stellar and Solving the Unexpected Tragedy of the Financial System". Retrieved 23 April 2015. 
  24. Paul Vigna (28 February 2015). "Stellar Takes a Step Into the Microfinance World". Wall Street Journal. Retrieved 23 April 2015. 
  25. McCaleb, Jed. "The Philippines is Now Connected to Stellar". Retrieved 2017-01-03. 
  26. FORTUNE. "Stripe-Backed Stellar Kicks Off Worldwide Money Transfers". Fortune. Retrieved 2017-01-03. 
  27. "Blockchain for Global Payments Processing". 2017-10-16. Retrieved 2017-10-25. 
  28. "Stellar Partners with Keybase to Help Facilitate Global Crypto Transfers". CryptoSlate. 2018-03-13. Retrieved 2018-03-27. 
  29. "DigitalBits Project Puts Decentralized Blockchain Into Loyalty & Rewards". PaymentWeek. 2018-03-20. Retrieved 2018-03-20. 
  30. Joyce Kim; (December 4, 2014). "Safety, liveness and fault tolerance—the consensus choices". Stellar Development Foundation. Retrieved January 14, 2015. 
  31. Stefan Thomas (December 7, 2014). "Why the Stellar Forking Issue Does Not Affect Ripple". Ripple Labs. Retrieved March 7, 2015. 
  32. Cade Metz (8 April 2015). "An Algorithm to Make Online Currency as Trustworthy as Cash". WIRED. Condé Nast. Retrieved 23 April 2015. 
  33. Stan Higgins (14 April 2015). "Jed McCaleb Talks Stellar's New Protocol for Consensus". Coin Desk. Retrieved 23 April 2015. 
  34. "Stellar Core". Github. Retrieved 14 September 2015. 
  35. David Mazieres (14 July 2015). "Stellar Consensus Protocol White Paper" (PDF). Stellar Development Foundation. Retrieved 14 September 2015. 
  36. Stan Higgins (9 December 2014). "Stellar Network Fork Prompts Concerns Over Ripple Consensus Protocol". Coin Desk. Retrieved 23 April 2015. 
  37. Hans Lombardo (5 November 2015). "Stellar Releases Major Upgrade that Runs Faster, Uses Less Memory & Stores Data Better". All Coin News. Retrieved 20 November 2015. 
  38. "Stellar Grant Program Will Award 'Selected' Participants $2 Mln In Tokens". Cointelegraph. 8 September 2017. 
  39. "IBM Blockchain Payments To Use Stellar In Major Partnership Deal". Cointelegraph. 16 October 2017. 

Other websites[edit | edit source]