Stellar blockchain is a distributed ledger network designed for fast, low-cost cross-border payments and transactions. Created in 2014 by Jed McCaleb, who previously co-founded Ripple and Mt. Gox, Stellar aims to connect financial institutions and facilitate efficient global money transfers.

The network operates through its native cryptocurrency, Stellar Lumens (XLM), and uses the Federated Byzantine Agreement (FBA) consensus protocol, which enables faster transaction processing than traditional blockchain networks.

Key Features:

• Transaction speed: 2-5 seconds per validation
• Minimal computing requirements
• Energy-efficient consensus mechanism
• Focus on developing markets and cross-border payments
• Partnership with major firms like Deloitte

How Stellar Works:

1. Uses decentralized servers with distributed ledger technology
2. Employs quorum slices for transaction approval
3. Each node selects trusted nodes for validation
4. Can process thousands of operations per second
5. Requires minimum 1 XLM balance per wallet

Primary Applications:

• Cross-border payment processing
• Banking institution connections
• Money remittances
• Bank loan distribution
• Nonprofit organization transactions

Advantages over Traditional Systems:

• Eliminates complex Nostro-Vostro processes
• Reduces transaction times
• Lowers operational costs
• Enables simultaneous validation
• Supports multiple currencies

Concerns:

1. Centralization issues with Stellar Development Foundation
2. Large token ownership by developers
3. Limited number of network nodes
4. Previous network outages
5. Price volatility

Comparison with Ripple:

• Both target cross-border payments
• Stellar is open-source; Ripple is closed
• Stellar focuses on developing markets
• Ripple targets established banks
• Similar technical foundations

The Stellar blockchain continues to evolve as a viable option for global payments, particularly in developing markets. While facing some centralization concerns, its efficient consensus mechanism and practical applications make it a notable player in the blockchain space.

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