Stellar XLM cryptocurrency

Stellar (XLM) is a completely decentralized consensus platform.
It is designed to support any type of currency.
It has a built in decentralized exchange that can be used to trade any type of currency or asset.

Stellar Specifications

  • 3-5 second confirmation time
  • Supports thousands of transactions per second
  • Can be used to send or trade any currency, asset, or token.
  • Open-source
  • Uses SCP rather than Proof of Work. Whitepaper
  • Simple, clean API
  • Multisig and smart contracts
  • Decentralized distributed database
  • 100B XLM created initially
  • 1% fixed annual inflation

Stellar Coin Distribution

Since the Stellar network doesn’t use mining, all the coins exist when the network starts.
The majority of these are held by the non-profit is distributing the coins in the following way:

  • 50B XLM: to be given in small increments to as many people as possible.
  • 25B XLM: to be given to other businesses and non-profits to reach people that wouldn’t otherwise be able to reach through the Direct Signup program.
  • 20B XLM: to be given to bitcoin and XRP holders (announcement about the details of this coming soon)
  • 5B XLM: retained by for operations.

How it works

Decentralized network

A decentralized network consists of peers that can run independently of each other.

This means that the Stellar network does not depend on any single entity. The idea is to have as many independent servers participate in the Stellar network as possible, so that the network will still run successfully even if some servers fail.


Like a traditional ledger, the Stellar ledger records a list of all the balances and transactions belonging to every single account on the network. A complete copy of the global Stellar ledger is hosted on each server that runs the Stellar software. Any entity can run a Stellar server.

These servers form a decentralized Stellar network, allowing the ledger to be distributed as widely as possible. The servers sync and validate the ledger by a mechanism known as consensus.
This entire process of coming to consensus on the Stellar network occurs approximately every 2-5 seconds.
Prof. David Mazieres describes the technical process of consensus in his white paper, The Stellar Consensus Protocol (SCP). You can also explore other resources explaining SCP.

Anchors, trust, and credit

Anchors are simply entities that people trust to hold their deposits and issue credits into the Stellar network for those deposits. They act as a bridge between different currencies and the Stellar network. All money transactions in the Stellar network (except the native digital currency of lumens) occur in the form of credit issued by anchors.

Anchors do two simple things:

  1. They take your deposit and issue the corresponding credit to your account address on the Stellar ledger.
  2. You can make a withdrawal by bringing them credit they issued.

You have to trust the anchor to honor your deposits and withdrawals of credit it has issued.
Anchors exist in the pre-stellar world now. For example, to use Venmo, you deposit money in from your bank account. Venmo then gives you credit in your Venmo account. You can now send that Venmo credit to anyone that trusts Venmo (anyone with a Venmo account). Someone that received your Venmo credit can convert it to real money by withdrawing it to their bank.

Anchors perform the same function in Stellar. The difference is, all the “Venmos” and other anchors are operating on the same network so they can all transact with each other now – this makes the system way more powerful. People can now easily send and exchange all these different anchor credits with each other.

Distributed Exchange

The Stellar ledger is able to store offers that people have made to buy or sell currencies. Offers are public commitments to exchange one type of credit for another at a predetermined rate. The ledger becomes a global marketplace for assets.

All these offers form what is called an orderbook. There is an orderbook for each currency/issuer pair. So if you are wanting to exchange Virgin Bank/EUR for bitstamp/BTC you look at that particular order book in the ledger to see what people are buying and selling it for.

This allows people to not only buy and sell currencies in a foreign exchange like manner but also to convert currencies seamlessly during transactions.

Multi-currency transactions

Stellar allows you to send any currency you hold to anyone else in a different currency through the built-in distributed exchange. People can receive any currency through an anchor they added.

For example, Amy wants to send Bob euros, using her BTC balance. Stellar will automatically convert her BTC to EUR. The network will find the best exchange rate for the transaction.

Stellar Development Foundation (Stellar Development Foundation) is a nonprofit organization that contributes to the Stellar network’s development and ensures it remains open and accessible to everyone.

Our mission is to connect people to low-cost financial services to fight poverty. We envision a prosperous world where everyone can improve their own lives through access to affordable payments, credit, and savings accounts.

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