Stellar came onto the cryptocurrency scene back in mid-2014. Emerging from a rift within executives of the cross-border coin, Ripple, this new blockchain network and cryptocurrency seized a foothold in developing economies where remittance played a heavy role. Since then, it's expanded its reach, building partnerships around the globe, but what exactly is it?What Is Stellar?
People often use Stellar to refer to multiple things. To be clear, there is Stellar, Lumens, and XLM. Stellar is a blockchain-based distribution ledger network, Lumens is the cryptocurrency made specifically for that network, and XLM is the coin's symbol. The three terms are often used interchangeably, but we'll try using them literally here for the sake of clarity.
The founder of Stellar was Jed McCaleb, a well-recognized name among the cryptocurrency community. The Arkansas native first made a splash in 2010, founding the bitcoin exchange Mt. Gox. The service quickly became one of the premier exchanges for bitcoin and by 2011, McCaleb sold it off to new owners. Those new owners saw the exchange through its most popular days but also through multiple hacks that led to the service's discontinuation in 2014 and a shaken faith among the bitcoin enthusiasts.
After selling Mt. Gox, McCaleb moved onto a new project, Ripple. Ripple was another blockchain-based network designed for cross-border payments. It focused on remittance payments, (when one party from a certain country sends money to another party in a different country--typically one with an underdeveloped economy) seeking to fix the two central problems surrounding them: high costs and long processing times.
Ripple sought to simplify the process by reducing the burden on financial institutions, who often have to interact with multiple separate institutions for cross-border transactions. Using Ripple's network, it became possible for one bank to transfer to another without the involvement of any third ...