Blockchain technology
Blockchain is a distributed ledger technology which makes the history of any digital asset tamper-proof and transparent through cryptographic hashing.
There are three important concepts in Blockchain – Blocks, Nodes, and Miners.
Blocks – Every chain has many blocks, and each block has three elements:- the data, a nonce, and the hash.
A nonce generated the cryptographic hash when the first block of the chain was created. The data in the block was forever tied to nonce and hash unless it is mined.
Miners – Mining is a process that creates new blocks on the chain. Every block in a blockchain has its unique nonce and hash, which also references the hash of the previous block in the chain, hence mining a block isn’t easy on the large chains.
Nodes – Blockchain technology is a decentralized technology where no organization or computer owns the chain. It is a distributed ledger where nodes are connected to the chain. Nodes are any electronic device that maintains copies of Blockchain and keeps the network working.
What is Stellar Network?
Stellar is a non-profit organization which was founded by Jed McCaleb and Joyce Kim in 2014. Stellar offers a platform that connects payment systems, connects banks and people to make money move quickly, reliably, and at minimum cost.
Stellar has a decentralized and open database which can enable thousands of transactions per second. It uses a Stellar consensus protocol to facilitate the transaction. Stellar has a native token called Lumen, which is denoted by XLM. There are 100 billion XLM, which are pre-mined.
Stellar is a decentralized system with a peer-to-peer network. The transaction details in Stellar are stored in Blockchain, which functions as a transparent and open ledger. Ledger is open to all so anyone can look at the ledger and see all the transaction details. All the decisions and verification are made via consensus. It uses the Stellar consensus protocol. One of the biggest advantages of Stellar is its multi-currency transactions.
In addition to the payment platform, Stellar is also an ideal platform for ICOs. An ICO platform should have four properties, which are liquidity, security, performance, and ease of use. Stellar has an in-built DEX (Decentralized Exchange), which enables the ICOs to list their respective tokens without any need for a third-party exchange. The stellar system is extremely easy to use, and hence the token creation for any Dapp is also extremely easy.
How does Stellar work?
Stellar is a Blockchain-based distribution ledger network, and Lumen is the native cryptocurrency. Some of the features of Stellar are:
Stellar is a decentralized and open-source network that has no central authority like a bank. There are multiple nodes that work independently to verify and input transactions in the platform’s ledger. Stellar follows a unique method to reach the consensus, which is known as a Federated Byzantine Agreement (FBA).
The transaction occurs in must faster speeds than the other blockchain technologies, including Bitcoin. Stellar transaction only takes 3-5 seconds.
One of the biggest advantages of stellar is its seamless transaction across currencies. If someone wants to exchange EUR for USD, then Stellar will find someone else who wants to exchange USD for EUR to complete the transaction.
Stellar aims to reduce the time and cost of international money transfers. Stellar also differs from most of the other platforms because it doesn’t rely on miners to create consensus. Stellar team has created a unique consensus protocol called the Federated Byzantine Agreement or FBA.