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Stellar is a crypto currency that aims to simplify international payment transactions. The coins developed for this purpose are known as lumens and have experienced an enormous increase in value over the past year. With a market capitalization of more than 13 billion dollars, Stellar is one of the first ten crypto currencies in the world in this area.
The project is run by the non-profit Stellar Development Foundation, based in the United States. The goal is to economically connect as many people as possible worldwide via the network. Low transaction costs and the integration of the poor population into the global financial system are also intended to combat poverty.
Stellar wants to solve this problem
In recent years and decades, the global economy has moved ever closer together. With just a few clicks it is now possible to order goods all over the world. One problem, however, still exists: the individual currency systems are actually not compatible.
So if I order a book in the United States, the dealer can't do much with my Euros there. Therefore, an instance is needed that organizes the exchange of values across different currencies. Of course they already exist. But anyone who has ever exchanged money in an exchange office knows that intermediaries always pay very well for their role. Stellar would like to offer an inexpensive and uncomplicated alternative.
These heads stand behind Stellar
The new Crypto currency was founded by a name very well known in the scene. Jed McCaleb once founded eDonkey, one of the world's first digital file-sharing networks. Later he founded the infamous Bitcoin trading place MtGox. When it hit the headlines with a spectacular hack, McCaleb had already sold his shares and turned his attention to a new project:
The crypto currency Ripple. At some point, however, he no longer liked the orientation there, so that he set up a competing project with Stellar. Technically there are still some similarities between Ripple and Stellar. Besides McCaleb, Stanford professor David Mazières also plays an important role at Stellar. Among other things, he produced the final white paper.
Lumens as a means of payment
The crypto currency still bears the name Stellar today. However, so-called lumens are used as the payment unit. These can - similar to the Bitcoin - also be traded on stock exchanges and thus have a certain value. They have two functions in the Stellar network:
1. they should prevent attacks by masses of transcription requests. This happens in two ways. Firstly, each account must be filled with at least twenty lumens in order to carry out transactions. This should make it more expensive to create fake accounts. On the other hand, each transaction destroys 0.0001 lumens - which has a similar purpose.
2. lumens can also be used as an intermediate station for currency transfers. In the case of an exchange of values between the United States and Germany, Euro and Dollar could be exchanged for Lumens first.
At the beginning, 100 billion coins were created. Since then, the amount has been increased by one percent each year, with token owners voting on which accounts the new units should receive.
By spring 2017, however, the lumens had hardly been traded at all. Both the price and the volume remained close to zero. Since then, however, a strong price trend has set in. One reason for this: an official cooperation with IBM. Together, the partners want to set up a cross-border payment system.
A well-known partner like IBM obviously led to a gain in trust, especially among people who are otherwise more critical of the benefits of crypto currencies. Especially since another strong name, the consulting company Deloitte, officially cooperates with Stellar. Also of interest for investors and traders: Transactions with Stellar should be completed within two to five seconds. The exchange of government currencies for crypto coins should also be much easier than with many competing projects.