Understanding Stellar: A Decentralized Payments Network
Stellar is a decentralized payments network established in 2014 to facilitate fast and cost-effective cross-border transactions. It aims to connect individuals, banks, and payment systems, enabling the reliable transfer of various forms of money, including fiat currencies and cryptocurrencies. The network is maintained by the Stellar Development Foundation (SDF), which supports technical and business communities and engages with regulators. Stellar uses its native token, Lumen (XLM), to maintain network efficiency and prevent spam. The platform emphasizes low transaction fees and fast processing times, seeking to empower unbanked individuals through affordable financial services. Stellar is recognized for its partnerships, including collaboration with MoneyGram for near-instant settlements and EURC availability. Its proof-of-agreement consensus mechanism ensures energy efficiency while enabling quick consensus on transactions. As it seeks to achieve mass adoption, Stellar must navigate competition and concerns regarding centralization due to the SDF's significant token holdings.
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