Stellar Lumens in a Nutshell

what’s up everyone my name is Michael and welcome to box mining today I want to talk about stellar and stellar lumens we’ll start off of what the stellar project is and how they’re trying to be different from everything else then I’m going to talk about their Vantage’s and disadvantages of system and if I’m gonna talk about stellar lumens our token that they’re using so let’s start off with what is stellar and what is trying to achieve it’s trying to use cryptocurrencies to do very fast payments with low fees so if you look at the key advantages of stellar it has a three to five second conformation time it also supports thousands of transactions per second so that’s a little bit different from Bitcoin which has a approximately ten minute conformation time and Bitcoin doesn’t support as many transactions as stellar does so if you look at this stellar uses something else so it can’t use the same mechanism that Bitcoin uses which is called proof of work so bitcoin is my nipple but stellar uses something else is called the SCP the stellar consensus protocol and if this all sounds a little bit familiar of this kind of fast confirmation time and fast many contraction per second and you’re thinking about something called ripple then you’re right because stellar is actually based on repose code it’s actually fork off ripple and happened around 2014 so it kind of originated from ripple and kind of deviated from that and changed so there is a little bit of controversy surrounding this and I do want to cover that in a little bit later but I just want to talk about the key advantages of stellar first so it doesn’t use mining it’s not mine above all stellar lumens are created from the start and if you look at your white paper what they’re trying to claim is that they’re trying to claim that this kind of protocol mechanism is better than Bitcoin mostly because it still keeps its decentralization but it has low latency flexible trust and better security of course not everyone believes their so this is kind of one-sided part of their white paper the thing with proof of work is that it is truly decentralized and miners are incentivized by rewards to mine and be honest the thing is with the seller consensus protocol it is something new and different and it uses a different trust mechanism so kind of the network chooses to trust itself or not but it doesn’t have mining it doesn’t have a reward or a lack of reward rather if you choose to be dishonest so this is something that is a little bit different and a little bit different way of kind of doing things there is a little bit of a sacrifice in my opinion so my personal opinion is that sacrifices a little bit of the decentralization for speed and efficiency so there’s always trade-offs in crypto currencies I just want to make that very clear that every mechanism has its you know advantages and disadvantages and the SCP the ripple master and the SP the seller mechanism does have some advantages because it’s fast but of course there are people that can definitely argue that because it’s not mine Apple because there’s no mining mechanism here and or incentive to be a miner or part of a node then it’s not as secure as Bitcoin so we talked about how stellar has fast confirmations and supports many transaction for a second so what are the applications of stellar well the applications are for micro payments and cross-border transfer are like for example remittances and also something like mobile money so it’s trying to do this kind of transfer of value thing very similar to what Ripa was trying to do but it’s trying to target more for retailers merchants so kind that’s the kind of the key difference between ripple and stellar stellar is more open source it’s more trying to engage the community it was rip was more close source and target systems like banks so here we have recently stellar and IBM announced a partnership to solve cross-border payments so this is a huge issue if you guys remember systems that are currently in place for example Swift or using traditional institutions require a lot of time and high fees and then something that stellar lumens try to solve because you can transfer these tokens really quickly between countries and it’s kind of nation less and transfer anywhere across the world takes the same amount of time so that’s a key advantage of using this them so IBM and seller are trying to develop the system and trying to improve it so that there’s like 12 currency corridors you can transfer currencies between for example New Zealand and a United Kingdom and they’re trying to get different parties on board of course they need a lot of liquidity providers to do this and they’re still in the process of working this out and of course when Kathy is that they don’t have to use the stellar lumen token so I’ll talk about this token in a later a second as well so the protocol itself is all about fast transactions and about many transactions so second basically this kind of instantaneous and real-time transactions that’s what they call you because five seconds to six seconds delay isn’t that long so now let’s talk a little bit about the lumens as well so the lumens is the native kind of currency and atthe native acid of the stellar Network so we talked about how stellar is the protocol of all the lumens are the tokens that you’re sending the tokens are like Bitcoin and there’s a lot of these tokens around a hundred billion of these tokens are created and they’re not mine so they’re just created it’s called um you know community will call this pre mined in a sense that this was created by the company and then were issued out during various air drops so people that were you know taking part of the air drops could claim stellar lumens for free and that was a way to distribute these stellar lumens to to Bitcoin holders currently at this point six point nine nine billion tokens have been distributed so far but that’s a little bit quite a little bit shy of the 100 billion that were created so Allah are still not distributed and held by the stellar foundation in terms of how transactions work it’s very similar to the ripple Network there’s a very small amount of fee associated to with sending seller lumens and the fee is mostly to prevent the network from spam attack so there’s a minor fee associated with everything and account holders must hold a minimal balance of 20 lumens so it’s not really a lot of lumens that they have to hold to use this network so if you’re using this as remittance I think it suffers the kind of the same advantages and disadvantages of ripple I’ve been talking about ripple a lot but a lot of people think that this will be held by a lot of people using this as we met but if the transactions are really fast and you just want to transfer currency from point to point and use I’m stellar or repo as a medium then it’s only an intermediary state and you don’t need that much to have lots of liquidity so I really think that this is one of the things that you must remember if you think about you know buying lumens or buying ripple in general it it’s meant to be an intermediary currency unless people really want to hold on for it for a long term there’s really this design around it it’s really to just facilitate a transfer and once transfer is done then it’ll be released back into the network so you don’t really need that much to have a very kind of liquid network so lastly I want to talk about ripple versus stellar lumen because this has been a huge debate since 2014 seller has been for from ripple and it was developed by someone that was part of the original ripple team however there has been criticism on both sides about each other’s network so they were just you know stellar has been talking about how after they forked off ripple they made various improvements that change you know consensus code how the ripple network gains consensus and there’s claiming that these changes are because of a core bug core issues in ripple system but ripple has since then reply to that and says that you know the forking issue doesn’t affect ripple and that ripple is not really bugged out so it seems like there is a mini war between ripple and stellar to claim which one is better and bug free the cool thing is that you can judge this for yourself so if you used to get huh both ripple and stellar have their sources code on github I don’t love to hear your opinion on this debate as well whether you think stellar is a better mechanism then ripple or if ripple is better so I’d love to hear your opinions and kind of discuss this guys thank you so much for watching this quick summary of stellar lumens if you want additional things to be added I would love to hear them below as well and maybe can make additional more advanced video covering stellar lumens thank you guys so much remember to subscribe this channel for more discussions and more videos like this remember to click that notification bell on a side to be notified of new videos as well thank you guys so much for watching see you next time

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