What is Stellar?
Stellar is an open-source, decentralised payment protocol that enables fast, cross-border transactions between any pair of currencies. Its native cryptocurrency, is called Lumens (XLM). .
How does Stellar’s blockchain work?
Transactions that take place on the Stellar network are added to a shared, distributed, public ledger, a database accessible by anyone worldwide. To reach consensus on transactions in an accurate and timely manner, Stellar uses its own unique consensus method that diverges from the “proof of work” consensus mechanism behind Bitcoin.
How does Stellar’s consensus method work?
Stellar’s consensus method allows for fast and cheap transactions, with everyone on the network reaching agreement about transaction validity within a few seconds. Every participant who runs a node (computers that create and maintain the Stellar Network online) helps to add Stellar transactions to the global ledger and chooses its own mini-network of other trusted participants that it agrees with. As long as these mini-networks (called quorum slices) overlap, the overall Stellar network can reach an agreement on which transactions are valid and can be added to the ledger quickly. You can read more about Stellar’s consensus mechanism in this article.
Where is the value of Stellar derived from?
Stellar is valuable because it is a global exchange network, capable of hosting thousands of exchanges between currencies and tokens per second. Exchanging between cryptocurrencies and/or fiat currencies can be a lengthy and expensive process; Stellar makes exchanging swift and cheap. XLM, the asset that will be supported within the Blockchain Wallet, is used to pay transaction fees and maintain accounts on the Stellar network.