Introduction To the Stellar Payment Network

The Stellar payment network is an open source protocol that allows users to store and transfer money, including fiat currencies and crypto currencies. Stellar was created to enable people using the many disparate financial systems throughout the world to exchange monetary value using the same efficient payment network.

The Stellar Development Foundation

The Stellar Development Foundation (or SDF) is the non-profit organization behind the Stellar Payment Network. The foundation is headquartered in San Francisco, California, and was founded in 2014 to support the development and growth of the Stellar payment network and of the Stellar Lumens (or XLM), which is the native currency built in to the Stellar network.

SDF received its initial funding from Stripe, the payment processing company with whom it collaborated to create the Stellar open network. Stripe gave SDF $3 million in exchange for 2 billion lumens.

The Stellar Development Foundation established and continues to maintain the Stellar network codebase, which is kept in a GitHub repository. After the total supply of lumens was adjusted to its current volume of 50 billion in 2010, the Stellar foundation kept nearly 30 billion lumens of the total supply to use for continued development and growth of the network.

SDF employs a staff of about 130 personnel, including developers and other technical employees as well as product managers, account managers, marketers, and other roles that support the mission of the growing the use of Stellar worldwide.

Stellar Lumens (XLM)

Stellar lumens are built-in tokens of the Stellar payment network. Stellar lumens are abbreviated as XLM on the exchanges (such as Binance, Coinbase, Kraken) where they are traded.

Stellar created the lumens currency as a way to create a cost barrier to users of the Stellar payment network, with the intent to reduce or eliminate spam and other misuses of the Stellar node system. Accounts that access the Stellar network must have a minimum of 1 lumen, and they pay a transaction (for buying or selling lumens) of 0.0001 lumen.

The existence of Stellar lumens as a native currency on the Stellar payment network is convenient, as lumens serve as an exchange medium and facilitates the movement of money, even from currencies that would be otherwise difficult to exchange, between a wide range of payment representations, including fiat an crypto.

When the Stellar Development Foundation first introduced their lumens currency in 2014, the original supply was 100 billion. For the first five years of the network’s existence, there was an inflation mechanism that created nearly 5.5 billion new lumens until in October 2019, when the decision was made to reduce the total supply of XLM to just over 50 billion.

Stellar Network Programming Languages

Stellar Consensus Protocol

The Stellar Consensus Protocol (or SCP) implements a newer, more efficient model for blockchain consensus called federated Byzantine agreement (or FBA). The technical implementation of this Stellar Consensus Protocol by the Stellar network is what sets it apart as a more efficient, less energy intensive, cheaper form of exchanging money on the payment network.

The Stellar Consensus Protocol is essentially a highly scalable messaging platform that matches up offers to sell with offers to purchase at a rate of thousands per second.

For the technically-minded, you can read the 30-some pages that comprise the Stellar Consensus Protocol on the official Stellar website.

Stellar Payment Network technical implementation
Stellar’s payment network makes use of anchored assets, a decentralized exchange, and an efficient, scalable consensus model to make it easy, fast, and cheap to exchange money.

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