A Guide to Stellar: Open-Source Blockchain for Currencies and Payments
Everyone wants to use blockchain technology in their industries because it offers the potential to drastically reduce costs and improve efficiency. In this guide, we’ll discuss how Stellar, an open-source blockchain platform, makes it easy to build great products with built-in payment methods and global reach right out of the box. First, we’ll discuss what you need to know about Stellar and its differences from other major blockchains. Next, we’ll explain how Stellar works as well as its main benefits. Then, we’ll walk through your different options when integrating Stellar into your product or service.
What is Stellar?
Stellar is a decentralized protocol that enables you to send money to anyone in the world, instantly, for free. Stellar is an open-source project with the goal of providing financial access to everyone. The network is powered by a global community of volunteers who validate transactions and keep the network secure. You can hold any currency on Stellar, including fiat currencies, cryptocurrencies, and even commodities. The protocol also allows you to trade currencies and assets on a decentralized exchange.
How Does it Work?
Blockchain is a digital ledger of all cryptocurrency transactions. It is constantly growing as completed blocks are added to it with a new set of recordings. Each block contains a cryptographic hash of the previous block, a timestamp, and transaction data. Bitcoin nodes use the block chain to differentiate legitimate Bitcoin transactions from attempts to re-spend coins that have already been spent elsewhere.
A transaction must contain all of these elements in order to be considered valid. The blocks are added, or mined, in chronological order by miners. They use a proof of work mechanism (PoW). This requires an extensive amount of computational time, energy and resources. As each block is added it creates an irreversible chain (blockchain) of events that can be used as evidence if there are any disputes on a ledger entry. If anyone tried to alter historical transactions they would have to recalculate each subsequent block in addition to all previous blocks in order for their altered ledger history record not to show conflicting entries.
Who Uses It?
Small businesses can use Stellar to send invoices and payments quickly and easily. Online sellers can use it to send invoices and payments. Merchants can use it to accept payments in multiple currencies. Developers can use it to create applications that make it easy for people to pay each other. And nonprofits can use it to move money around the world quickly and cheaply.
These different users all have something in common. They know that financial infrastructure isn’t built from a single platform. It’s built from a series of technologies, people, and business relationships working together over time. These people understand that if you want to send money around the world, you should be able to use whatever payment technology makes sense—whether it’s cash, credit cards, crypto tokens, air miles, or loyalty points. The technology should make moving money between businesses as easy as sending an email or text message today. And it should let them accept these different kinds of payment in whatever currency they choose without having to worry about exchange rates or other hidden fees.