What is Stellar?

The use of crypto for cross-border payments

In the world of constant news about the impact of the latest, most lucrative cryptocurrency entering the market it can be easy to overlook noteworthy ventures that offer something different. Stellar is one of them. Founded in 2014 as a protocol supported by a non-profit, Stellar’s social mission is to “provide financial services to the unbanked”. International money transfers done the traditional way are slow, complicated and costly for both parties. Broadly speaking, the aim is to reduce costs of micropayments and remittance.

You may ask yourself what makes Stellar so unique, as Bitcoin, Ethereum, or any other cryptocurrency for that matter can be sent transnationally via a decentralized process and hereafter transferred into fiat money. While this is true, one of Stellar’s building stones is to learn from, and fix issues such as speed and scalability that hold Bitcoin back. Firstly, Stellar operates differently to blockchain, on a basis of a different consensus mechanism to validate transactions, the Stellar Consensus Protocol, made of nodes that add to agreement by validating a variety of transactions forming a network that has mutual trust and leads to a consensus every 2–5 seconds.