Stellar (payment network)

Stellar is an open source, decentralized protocol for digital currency to fiat money transfers which allows cross-border transactions between any pair of currencies.[1] The Stellar protocol is supported by a 501(c)3 nonprofit, the Stellar Development Foundation.[2][3][4]

Stellar.org
Original author(s)Jed McCaleb, Joyce Kim
Developer(s)Stellar Development Foundation
Initial releaseJuly 31, 2014 (2014-07-31)
Repository
Written inC++, Go, Java, JavaScript, Python, Ruby
Operating systemCross-platform
TypeBlockchain
LicenseApache License 2.0
Websitestellar.org

History

In 2014, Jed McCaleb, founder of Mt. Gox and co-founder of Ripple, launched the network system Stellar with former lawyer Joyce Kim. Before the official launch, McCaleb formed a website called "Secret Bitcoin Project" seeking alpha testers.[5] The nonprofit Stellar Development Foundation was created in collaboration with Stripe CEO Patrick Collison and the project officially launched that July. Stellar received $3 million in seed funding from Stripe.[6][7] Stellar was released as a decentralized payment network and protocol with a native currency, stellar. At its launch, the network had 100 billion stellars. 25 percent of those would be given to other non-profits working toward financial inclusion.[8][9] Stripe received 2 percent or 2 billion of the initial stellars in return for its seed investment.[10] The cryptocurrency, originally known as stellar, was later called Lumens or XLM.[11] In August 2014, Mercado Bitcoin, the first Brazilian bitcoin exchange, announced it would be using the Stellar network.[12] By January 2015, Stellar had approximately 3 million registered user accounts on its platform and its market cap was almost $15 million.[13]

The Stellar Development Foundation released an upgraded protocol with a new consensus algorithm in April 2015 which went live in November 2015.[14] The new algorithm used SCP, a cryptocurrency protocol created by Stanford professor David Mazières.[15]

Lightyear.io, a for-profit entity of Stellar, launched in May 2017 as the commercial arm of the company.[16] In September 2017, Stellar announced a benefits program, part of its Stellar Partnership Grant Program, which would award partners up to $2 million worth of Lumens for project development. In September 2018, Lightyear Corporation acquired Chain, Inc and the combined company was named Interstellar.[17]

Real-world applications

In 2015, it was announced that Stellar was releasing an integration into Vumi, the open-sourced messaging platform of the Praekelt Foundation.[18] Vumi uses cellphone talk time as currency using the Stellar protocol.[19] Stellar partnered with cloud-based banking software company Oradian in April 2015 to integrate Stellar into Oradian's banking platform to add microfinance institutions (MFIs) in Nigeria.[20][21]

Deloitte announced its integration with Stellar in 2016 to build a cross-border payments application, Deloitte Digital Bank.[22] In December 2016, it was announced that Stellar's payment network had expanded to include Coins.ph, a mobile payments startup in the Philippines, ICICI Bank in India, African mobile payments firm Flutterwave, and French remittances company Tempo Money Transfer.[23]

In October 2017, Stellar partnered with IBM and KlickEx to facilitate cross-border transactions in the South Pacific region. The cross-border payment system developed by IBM includes partnerships with banks in the area.[24][25]

In December 2017, TechCrunch announced Stellar's partnership with SureRemit, a Nigerian-based non-cash remittances platform.[26]

Overview

Stellar is an open-source protocol for exchanging money or tokens using the Stellar Consensus Protocol. The platform's source code is hosted on GitHub.

Servers run a software implementation of the protocol, and use the Internet to connect to and communicate with other Stellar servers. Each server stores a ledger of all the accounts in the network. 3 nodes are operated by the Stellar Development Foundation, in conjunction with 21 other organizations, providing for a total of 66 validator nodes[27]. Transactions among accounts occur not through mining but rather through a consensus process among accounts in quorum slice.[28] The current network fee is 100 stroops, equivalent to 0.00001 XLM or 1/10,000th of a cent[29].

References
  1. Ben Dickson (January 30, 2018). "Can blockchain democratize education? This startup seems to think so". The Next Web. Retrieved August 26, 2018.
  2. 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.
  3. 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.
  4. JP Mangalindan (31 July 2014). "New Bitcoin challenger launches". Fortune. Retrieved 23 April 2015.
  5. "Mt. Gox, Ripple Founder Unveils Stellar, a New Digital Currency Project".
  6. "New Bitcoin challenger launches".
  7. Michael del Castillo (5 August 2014). "Stripe takes on bitcoin with rival digital currency Stellar". The Irish Times. Retrieved 20 November 2015.
  8. "Payment processor Stripe helps launch a new currency, the Stellar".
  9. "PayPal's Cofounder Is Supporting A New Non-Profit That Will Tackle The Vision PayPal 'Never Accomplished'".
  10. "Stripe Backs Non-Profit Decentralized Payment Network Stellar, From Mt. Gox's Original Creator".
  11. "2 Game-Changing New Cryptocurrencies With Serious Backing".
  12. "New Digital Currency Aims to Unite Every Money System on Earth".
  13. "Stellar rewrote the rules of cryptocurrencies. Now, users in Asia are leading its growth".
  14. Cade Metz (8 April 2015). "An Algorithm to Make Online Currency as Trustworthy as Cash". WIRED. Condé Nast. Retrieved 23 April 2015.
  15. Tom Simonite (April 15, 2015). "A New Competitor for Bitcoin Aims to Be Faster and Safer".
  16. Jeff John Roberts (May 11, 2017). "Stripe-Backed Stellar Places a New Bet on Blockchain in the Developing World". Fortune. Retrieved August 26, 2018.
  17. "Blockchain Startup Chain Merges With Stellar to Accelerate Use". Bloomberg.com.
  18. Biz Carson (5 February 2015). "Stellar, South African nonprofit to bring digital savings to young girls". GigaOm. Retrieved 23 April 2015.
  19. Tom Simonite (20 February 2015). "Bitcoin-Inspired Digital Currency to Power Mobile Savings App". MIT Technology Review. Retrieved 23 April 2015.
  20. Karen Webster (2 March 2015). "Stellar and Solving the Unexpected Tragedy of the Financial System". PYMENTS.com. Retrieved 23 April 2015.
  21. Paul Vigna (28 February 2015). "Stellar Takes a Step Into the Microfinance World". Wall Street Journal. Retrieved 23 April 2015.
  22. Diana Asatryan (May 3, 2016). "Deloitte Taps Blockchain Startups to Build New Core Banking System". Bank Innovation. Retrieved August 26, 2018.
  23. FORTUNE. "Stripe-Backed Stellar Kicks Off Worldwide Money Transfers". Fortune. Retrieved 2017-01-03.
  24. "Stellar jumps 20% after Stripe says it may add support for the digital coin".
  25. "IBM and Stellar Are Launching Blockchain Banking Across Multiple Countries".
  26. Jake, Bright. "Africa's SureRemit joins the tokenized race to win the global remittance market". TechCrunch. Archived from the original on December 12, 2017. Retrieved August 28, 2018.
  27. "Stellarbeat.io - Stellar network visibility". stellarbeat.io. Retrieved 2020-05-23.
  28. Tom Simonite (8 April 2015). "A New Competitor for Bitcoin Aims to Be Faster and Safer". MIT Technology Review. Retrieved 20 November 2015.
  29. contributors, Stellar org and. "Transaction Fees, Minimum Balances, and Surge Pricing | Stellar Developers". www.stellar.org. Retrieved 2020-05-23.
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