Stellar is an open platform for building financial products that connect banks, people, and payment networks everywhere. Founded by an accomplished crypto entrepreneur and backed by an impressive group of advisors, is Stellar capable of changing the way we make international payments?
In this beginner’s guide to Stellar, we’ll cover:
Stellar is a distributed payment network which aims to make sending money internationally as cheap and easy as sending an email. While Stellar does offer a native cryptoasset called Lumens (XLM), the currency serves only a complementary role in the network’s design. Stellar’s primary use cases revolve around remittances and banking the unbanked, and the network prioritizes accessibility, security, and low transaction fees above all else. The ultimate goal is to create a financial network that is inclusive to everyone, including the poor, who are currently being underserved by expensive and outdated financial institutions.
Stellar was founded in early 2014 by Jed McCaleb — the same Jed McCaleb responsible for founding P2P file sharing network eDonkey, Bitcoin exchange Mt. Gox (which he sold to French developer Mark Karpelès before the infamous security breach), and Ripple. Notable members of Stellar’s advisory board include Keith Rabois, Matt Mullenweg, Sam Altman, and Naval Ravikant.
The Stellar name is given to two entities:
- The Stellar network refers to the distributed payment network responsible for processing financial transactions. Lumens (XLM) are the tokens native to the Stellar network; primarily serving as a bridge currency.
- Stellar Development Foundation (SDF), also referred to as Stellar.org, is a nonprofit responsible for maintaining the Stellar network. Operational costs are covered by the 5% cut of total Lumens supply retained at launch, in addition to tax-deductible donations from the public.
Stellar began as a fork of the Ripple protocol after Jed McCaleb left the project citing philosophical differences. McCaleb’s breakup from Ripple was a messy affair, ending with him attempting to sell the entirety of his 9 billion ripples, a move that would have had significant impact on the XRP market. McCaleb later settled with Ripple in a court deal that would limit the amount of XRP he could sell at one time.
Though originally based on code borrowed from Ripple, Stellar underwent a complete network upgrade in November 2015 after claiming there were flaws in the underlying Ripple consensus mechanism. Ripple’s chief technology officer Stefan Thomas responded with a blog post titled, “Why the Stellar Forking Issue Does Not Affect Ripple”, concluding “there is no threat to the continued operation of the Ripple network.” Stellar is no longer considered a fork of Ripple as it uses completely different code since the 2015 revamp.
Stellar, like Ripple, is a payment network first and a cryptocurrency second. Stellar uses its native cryptoasset, XLM, as a means to better transfer fiat currencies rather than attempt to replace them.
Stellar: PayPal on the Blockchain
On the surface, the Stellar payment network functions similarly to PayPal. First, users deposit money onto Stellar through a trusted intermediary like a bank. Stellar then credits their account with the appropriate amount, and users are then free to send those funds to anyone on the network.
Stellar’s payment network differentiates itself from PayPal by its use of blockchain technology. Blockchains provide numerous benefits to traditional servers, including decentralization, transparency, and security. Perhaps the most enticing reason to choose Stellar over PayPal is Stellar’s extremely low transaction fees. Transaction fees exist within Stellar for the sole purpose of preventing network spam, and are therefore very cheap. Base fees are currently set to .00001 XLM — a fraction of a penny.
Stellar can maintain these low fees because all transacting parties reside on the same network. This is in contrast to transactions through traditional financial systems, which are often subject to a long series of detours, racking up multiple conversion and processing fees along the way to their destination. Stellar is cheap, even compared to other cryptocurrencies, because there are no miners to pay. Transaction fees collected on Stellar are later redistributed back onto the network via inflation — more on that later.
Stellar makes international payments easy with their multi-currency transactions. For example, say you want to send me euros using your USD balance. This transaction can be completed a few different ways:
- Currency conversion. The Stellar ledger features a native orderbook for each currency/issuer pairing to deal with foreign exchanges. In this case, Stellar would look for someone wanting to sell EUR for USD and automatically complete the trade.
- Use Lumens. Lumens (XLM) are the native cryptoasset of the Stellar network. XLM can act as a bridge currency in situations where there isn’t an active market between two currencies. If nobody wants to sell EUR for USD, Stellar will instead look for a USD -> XLM offer, as it simultaneously seeks a XLM -> EUR offer. The network then makes those exchanges and completes your USD -> EUR conversion.
- Finally, if the previous options have been exhausted, Stellar seeks out offers available on the network that eventually lead to the desired conversion. Here’s an example path of what this process can look like: EUR to AUD, AUD to BTC, BTC to XLM, XLM to USD.
Stellar Consensus Protocol: How Transactions Get Validated
Stellar may not reward its validators for maintaining the blockchain, but they still have a job to do. Stellar nodes use a modified ‘federated byzantine agreement’ form of consensus, called the Stellar Consensus Protocol, to determine if transactions are valid or not. In this system, every node maintains a list of other nodes it wants to listen to, resulting in a chain of nodes essentially saying, “I trust this transaction so long as X amount of my friends also trust it”.
The Stellar Consensus Protocol is considered an open membership system: anyone is free to become a validation node, and nodes can choose which other nodes they wish to follow instead of being fed a list from a central authority. This makes Stellar’s network design more decentralized than similar networks using delegated byzantine fault tolerance (dBFT) such as Ripple or NEO.
That being said, at this point in time Stellar only has 20-30 nodes powering its network. This lack of participation is a common side effect of systems choosing to forego economically incentivized consensus mechanisms. Validators exist on Stellar solely because they are willing to dedicate their resources for the sake of the network.
Inflation On the Stellar Network
New lumens are added to the Stellar network at a rate of 1% each year. The inflation mechanism runs on a weekly basis, distributing the inflation pool to any account on the Stellar network receiving over .05% of total votes. The size of the inflation pool is determined by the following formula: (number of lumens in existence)*(weekly inflation rate) + fee pool. Votes are weighted based on the amount of lumens you hold; 1 lumen is equal to 1 vote.
Every account has the option of participating in this voting process, but the lucky winners will need to earn a minimum of .05% of total votes — that’s 9,233,901 votes based on today’s circulating supply. Winners are paid out their share of the inflation pool; earn 5% of total votes and you’ll get 5% of the total pool. Some XLM holders have formed groups in which they combine their voting power to a designated account and split the earnings among all participants.
Stellar’s XLM is available on a variety of different cryptocurrency exchanges, including Binance and Bittrex. These two exchanges handle a combined daily volume of over $16 million in XLM alone; putting them behind only Korean cryptocurrency exchange Upbit.
There are a healthy selection of wallets capable of holding your XLM securely. Stellar.org lists a total of 11 compatible wallets, including 4 desktop wallets, 4 mobile wallets, and 8 web wallets. The safest place to store your XLM is in a hardware wallet. The Ledger Nano S is a good option that is compatible with XLM.
It’s worth pointing out the disclaimer on Stellar’s wallet page: “Stellar.org does not own, maintain or operate any of these wallets.”
Stellar wants to become the standard method of sending money around the world. The team is taking a bottom up approach, focusing on money transfer and remittance companies instead of large, risk-averse banks. Stellar believes banks need to see the protocol succeeding elsewhere before they actually begin using the network. IBM has declared they are a believer, which is a pretty good start.
It’s Stellar’s opinion that the fees associated with moving money, especially across borders, have a disproportionate impact on the poor. Working families, for example, spend $44 billion every year on Western Union or similar middleman fees. Stellar sees this massive number as an unnecessary expense being taken from people by an outdated financial architecture.
Stellar finds itself standing alone in a middleground: not quite in the cryptocurrency crowd, and not quite in the legacy payment network crowd. Stellar is significantly more decentralized than PayPal, but with no incentive mechanism for validation nodes, it is unclear just how decentralized Stellar will remain. Stellar’s ultimate success will depend on its adoption by legacy financial institutions, and how the network will be able to scale. Assuming it succeeds, however, Stellar has the potential to revolutionize the way people transfer money.
Robinhood Testing New Cryptocurrency Wallet as Demand Rises
The millennial-focused trading portal is edging closer to launching a long-awaited app that will enable its growing user-base to send and receive cryptocurrencies.
A beta version of Robinhood’s iPhone app showed the company’s latest upgrades on the new digital asset features, according to Bloomberg.
There is a hidden image showing a waiting list for users eager to get their hands on the app and code referring to crypto transfers, it added.
Delving Deeper into Crypto
Robinhood users can already buy and sell cryptocurrencies on the platform but they need to convert them to and from USD. With a native app, users will be able to send crypto assets to each other directly and set up two-factor authentication for additional security.
Robinhood Chief Executive Officer Vlad Tenev stated that adding crypto wallets is a priority for the company’s developers and they are actively working on such.
“The ability to deposit and withdraw cryptocurrencies is tricky to do with scale, and we want to make sure it’s done correctly and properly.”
He did not specify a launch date, but the beta app leak suggests it is not too far away. Users of the new functions will need to activate crypto sending and receiving and the registration page will require an identity check, the report added.
On Sept. 11, CryptoPotato reported that Robinhood had launched incentives to promote longer-term cryptocurrency investing. The zero-fee recurring purchase feature enables users to schedule digital asset purchases for regular intervals with buys as low as a dollar.
This will encourage customers to build their cryptocurrency portfolios over time and “become a whole coiner,” stated Robinhood.
Robinhood Users Hungry For Crypto
Cryptocurrency trading has been one of the biggest drivers of revenue for Robinhood this year. Dogecoin has been the crown jewel, according to the company. It reported that 62% of its $233 million in second-quarter crypto income came from DOGE trading.
It added that more than half of all transaction-based revenue on the platform came from digital asset trading. The firm did warn that Q3 would not be as prosperous due to “seasonal headwinds and lower trading activity across the industry.”
Robinhood share prices have already fallen 43% since their all-time high of a little over $70 in early August. They are currently trading down 1.68% since Monday’s open at $40.70 according to Yahoo! Finance.
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Snoop Dogg Reveals His Connection With Twitter Account on NFTs
Rate this post American rapper Snoop Dogg tweeted on Monday that he’s the owner of a Twitter account that talks about nonfungible tokens (NFTs). The account, named @CozomoMedici, shares “insights and tales from the wild world of NFTs” and has 27.7K followers at the moment. Snoop Dog Claims to Be Popular NFT Advocate on Twitter Snoop Dogg left the crypto community stunned this week after he revealed himself as the owner of a Twitter account dedicated to NFTs. The account Cozomo de’ Medici, named after an Italian banker, is only a month old. However, it has already garnered attention from industry watchers and even a mention from crypto-focused news outlet The Block. According to The Verge, the person behind the Medici account had been creating hype around their real identity for “at least a few days” and even conducted a poll for their followers to take a guess. The poll featured Democratic congresswoman Alexandria Ocasio-Cortez and Matt Bellamy, the lead singer of the rock band Muse. Snoop, however, was not mentioned in the poll. On September 20, @CozomoMedici tweeted that they were about to reveal their identity from their account. Shortly after, Snoop Dogg tweeted “I am @CozomoMedici.” Interestingly, after making this revelation, the Medici account bought two weed-themed collectibles from an artist named NyanDogg, The Verge reported. Additionally, Snoop’s alleged OpenSea account has been sent “a cloud of blunt and Snoop-themed NFTs” following the reveal. Is Medici Account an Elaborate Prank? The Medici account could likely turn out to be an elaborate prank, one that Snoop might have engineered himself or just participated in. Many reactions to Medici’s reveal have also expressed skepticism about Snoop’s involvement. “I have a hard time accepting that this account is Snoop Dogg. Like seriously Snoop Dogg muted his live stream for a week (?) by accident. And he is that deep into NFTs out here owning crypto punks… Owning Eth using OpenSea. Would love that to be true but I can’t believe it,” Twitter user @Brandolf485 wrote in the comments. Nonetheless, the crypto community will have to continue looking for concrete proof till Snoop’s involvement with the account is confirmed.
The post Snoop Dogg Reveals His Connection With Twitter Account on NFTs appeared first on Cryptoknowmics-Crypto News and Media Platform.
American rapper Snoop Dogg tweeted on Monday that he’s the owner of a Twitter account that talks about nonfungible tokens (NFTs). The account, named @CozomoMedici, shares “insights and tales from the wild world of NFTs” and has 27.7K followers at the moment.
Snoop Dog Claims to Be Popular NFT Advocate on Twitter
Snoop Dogg left the crypto community stunned this week after he revealed himself as the owner of a Twitter account dedicated to NFTs.
The account Cozomo de’ Medici, named after an Italian banker, is only a month old. However, it has already garnered attention from industry watchers and even a mention from crypto-focused news outlet The Block.
According to The Verge, the person behind the Medici account had been creating hype around their real identity for “at least a few days” and even conducted a poll for their followers to take a guess. The poll featured Democratic congresswoman Alexandria Ocasio-Cortez and Matt Bellamy, the lead singer of the rock band Muse. Snoop, however, was not mentioned in the poll.
On September 20, @CozomoMedici tweeted that they were about to reveal their identity from their account. Shortly after, Snoop Dogg tweeted “I am @CozomoMedici.”
Interestingly, after making this revelation, the Medici account bought two weed-themed collectibles from an artist named NyanDogg, The Verge reported. Additionally, Snoop’s alleged OpenSea account has been sent “a cloud of blunt and Snoop-themed NFTs” following the reveal.
Is Medici Account an Elaborate Prank?
The Medici account could likely turn out to be an elaborate prank, one that Snoop might have engineered himself or just participated in. Many reactions to Medici’s reveal have also expressed skepticism about Snoop’s involvement.
“I have a hard time accepting that this account is Snoop Dogg. Like seriously Snoop Dogg muted his live stream for a week (?) by accident. And he is that deep into NFTs out here owning crypto punks… Owning Eth using OpenSea. Would love that to be true but I can’t believe it,” Twitter user @Brandolf485 wrote in the comments.
Nonetheless, the crypto community will have to continue looking for concrete proof till Snoop’s involvement with the account is confirmed.
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TA: Ethereum Breaking This Confluence Resistance Could Spark a Recovery
Ethereum started a major decline below the $3,200 support zone against the US Dollar. ETH price traded as low as $2,807 and it is now attempting a recovery wave.
- Ethereum started a fresh decline below the $3,300 and $3,200 support levels.
- The price is now trading below $3,200 and the 100 hourly simple moving average.
- There is a key bearish trend line forming with resistance near $3,020 on the hourly chart of ETH/USD (data feed via Kraken).
- The pair could a steady recovery wave if there is a close above $3,050 in the near term.
Ethereum Price Corrects Losses
The bears gained strength below the $3,200 support zone. Finally, ether spiked below $3,000 and extended its decline. A low is formed near $2,807 and the price is now correcting losses. There was a break above the $2,920 and $2,950 resistance levels.
The price recovered above the 23.6% Fib retracement level of the recent decline from the $3,455 swing high to $2,807 low. An immediate resistance on the upside is near the $3,020 level. There is also a key bearish trend line forming with resistance near $3,020 on the hourly chart of ETH/USD.
Source: ETHUSD on TradingView.com
A close above the $3,020 and $3,050 levels could start a decent recovery. The next major resistance might be near the $3,130 level. It is near the 50% Fib retracement level of the recent decline from the $3,455 swing high to $2,807 low. A clear break and close above the $3,130 level could start a steady increase. The next major resistance sits near $3,300.
More Losses in ETH?
If ethereum fails to correct higher above the $3,020 and $3,050 resistance levels, it could start another decline. An initial support on the downside is near the $2,960 level.
The next major support seems to be forming near the $2,900 level. A downside break below the $2,900 support zone could lead the price towards the $2,800 zone. The next major support is near the $2,750 level, below which ether price might decline towards the $2,640 support zone.
Hourly MACD – The MACD for ETH/USD is slowly losing pace in the bearish zone.
Hourly RSI – The RSI for ETH/USD is still well below the 50 level.
Major Support Level – $2,960
Major Resistance Level – $3,050
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