Stellar - A Decentralized Platform to Set New Global Financial Infrastructure

At present, the financial system across the world is oppressed with high transaction fees, slow speed, and tedious processes that leave millions of users marginalized. In 2014, the Stellar network was launched to moderate the friction that exists in the current system, promoting financial inclusion and helping many businesses to set a new global payment standard. With the Stellar Blockchain solutions, making transactions throughout the world becomes as simple as sending an email.

Why should businesses prefer the Stellar network over other platforms?

The speed and scalability that Stellar Blockchain offers simplify Business-to-Business (B2B) cross-border payments. Moreover, it allows customers to trade among fiat and digital currencies through “Anchors’. Anchors is a primary Stellar component that enables regulated financial operations, money service transactions, fiat-supported stablecoins, and afford on/off ramps into native payment systems.

Let’s look at the other three components of Stellar Blockchain:

• Inherent decentralised exchange - Stellar has a built-in exchange component to manage digital assets at the protocol level. This component offers all the functionality it needs for developers to build an efficient financial application like buying and selling orders, maintaining the bookkeeping process, and trade history among companies. It makes it easier for new business users to integrate Stellar Blockchain into their services.
• Public ledger - All exchanges on the Stellar network are recorded inside a decentralized public ledger. This ledger helps authorized users to look at the transaction records and can extract some valid details. This component stimulates transparency in the system.
• Cross-currency transactions - This is the most significant component of the Stellar network, which offers the capability to perform transactions among two currencies.

These components help create a world where the present financial system is accessible and more compatible with Stellar. This enables businesses to send and receive assets fast and evidently while eliminating the fees and latency usually associated with cross-currency and cross-border transactions.

Compelling features of Stellar Blockchain

Stellar works on the mechanism called Stellar Consensus Protocol (SCP). The Stellar Blockchain solutions rely on SCP, which introduces a system of the federated agreement to perform consensus. Fast, apparent, and trustworthy transactions on Stellar are possible due to SCP protocol as it allows network users to achieve consensus via voting, instead of mining.

SCP creates a situation where it’s easy for industries and experts to develop on the network and acquire its most beneficial features, like:

• Digital Asset Representation - The effectiveness of cryptocurrencies like ETH, BTC are confined to working inside their platforms. These currencies are not interchangeable. But all these cryptocurrencies and even fiat currency can be signified as a valid asset on Stellar.
• Speed - A Stellar transaction usually takes around 2 to 5 seconds, which is highly faster than the fiat exchanges that may require hours. Stellar with its consensus approach makes it way more responsive than the further Blockchain like BTC, which may take about 60 min for a transaction to make unalterable and secure.
• Security - All the dealings on the Stellar network, like other Blockchain networks are recorded in a public, decentralized ledger. It ensures the data on the Stellar network is highly protected and almost impossible to disturb with Ransomware attacks and hacking tools.
• Compliant - In terms of compliance, Stellar is a leader with many built-in attributes that allow businesses to implement a smart Know-Your-Customer (KYC) process, asset regulation at the protocol level, Anti-Money-Laundering (AML) method, and issuer-administer finality.
• Stellar’s Native currency - Stellar holds a native platform currency known as lumens, or XLM, as a balanced solution to eliminate spam activities. Understanding XLM coin conditions from a Stellar Blockchain development company is helpful to keep your Stellar account accessible, and also deters malicious participants from engaging with the Stellar network at a large scale.
• Low Transaction Fees - Each stage/operation inside the Stellar network can cost a base fee that varies. Based on the intricacy of a transaction, the cost of the operation will vary and it will be usually higher for complex transactions. However, compared to other networks, the base fee per action is very feasible in Stellar. It’s around 0.00001 XLM per action.
• Minimum investment - In Blockchains like ETH, BTC, it doesn’t charge any fee to build an account. Consequently, any malicious participant can spam the system by creating many duplicate accounts. To avoid this, Stellar Development Foundation mandates each participant on the Stellar network must invest a minimum balance to keep their account active and perform reliable operations. Therefore, the minimum balance that a new entry participant must maintain is 2 XLM. This value varies when users execute additional operations like dispensing trust lines, placing buy, and sell entities, etc.

Final words

Stellar Blockchain solutions can consolidate financial infrastructure irrespective of your location so that any forms and systems of currency can be made interoperable across borders. With that comes enhanced accessibility and inclusion, where enterprises can have a world of balanced operation across many regions with the power of Stellar.