Stellar Cryptocurrency, Know Its Popularity
Like Bitcoin cryptocurrency, Stellar might offer some interesting opportunities for online traders. In 2017, the price of cryptocurrencies was shooting up to approximately 41000, the cryptocurrencies were among the star performers. Stellar is an open source payment technology, it was created by Jed McCaleb.It drastically reduces the time and cost required for cross-border transfer. It is a technology that aims to connect several financial institutions.
How does it work?
Stellar is basically similar to all the decentralized payment methods like Qprofit system. This system of network runs with a distributed ledger that updates every 2 to 10 seconds. The most prominent factor that distinguishes Stellar from Bitcoin is its consensus protocol. Now here Stellar’s consensus system does not rely on the miner network to approve all transactions, it uses FBA Federated Byzantine Agreement Algorithm, this system enables the faster processing of all the transaction, the reason it makes it faster is that it uses quorum slices to validate and approve a transaction.
The Current process that is used in the stellar cross-border transfers is very complicated one to understand. This system requires domestic banks that maintain foreign jurisdiction in the local currencies, here the correspondent bank should operate the same account in the original country. The nodes of the network use each node and set trustworthy nodes, this will make the transaction approved. This short process of stellar has made to operate around 1000 network per second.
It has another process called Nostro Vostro, as the name indicates it is a very lengthy process of a transaction involving conversion and reconciliation accounts. Stellar’s blockchain can also shorten or eliminate the delays that are involved in the process.
An institution that’s Uses Stellar Blockchains
As mentioned early, Stellar came into existence in 2017, its partnership has set up multiple currencies among the nations of South Pacific.
They have stated that they have a plan of processing 60 % of projects on all cross-border payments that includes countries like Fiji, Australia. This project will help the non-profit, small business owners and also local banks to expedite the commercial transactions. For example, a farmer in India can connect and conduct a transaction with a buyer in Bangladesh.
The consulting firm Deliotte, in 2016 announced a partnership with Stellar to develop payment app. A conference that was held in 2017, McCleb confirmed that around 30 banks have signed up to use Stellar blockchain for transfers.
For liquidification and streamline process, Stellar’s cryptocurrency can be used. According to a report stated by David Mazières, a Stanford University professor, the protocol of Stellar has a modest financial and computing requirements, this is one of the merits, which enables the low budget IT, nonprofit organizations to use the stellar network.