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What is Stellar? | The Ultimate Beginner’s Guide

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What is Stellar

Stellar is an open platform for building financial products that connect banks, people, and payment networks everywhere. Founded by an accomplished crypto entrepreneur and backed by an impressive group of advisors, is Stellar capable of changing the way we make international payments?

In this beginner’s guide to Stellar, we’ll cover:

Stellar is a distributed payment network which aims to make sending money internationally as cheap and easy as sending an email. While Stellar does offer a native cryptoasset called Lumens (XLM), the currency serves only a complementary role in the network’s design. Stellar’s primary use cases revolve around remittances and banking the unbanked, and the network prioritizes accessibility, security, and low transaction fees above all else. The ultimate goal is to create a financial network that is inclusive to everyone, including the poor, who are currently being underserved by expensive and outdated financial institutions.

Stellar was founded in early 2014 by Jed McCaleb — the same Jed McCaleb responsible for founding P2P file sharing network eDonkey, Bitcoin exchange Mt. Gox (which he sold to French developer Mark Karpelès before the infamous security breach), and Ripple. Notable members of Stellar’s advisory board include Keith Rabois, Matt Mullenweg, Sam Altman, and Naval Ravikant.

The Stellar name is given to two entities:

  • The Stellar network refers to the distributed payment network responsible for processing financial transactions. Lumens (XLM) are the tokens native to the Stellar network; primarily serving as a bridge currency.
  • Stellar Development Foundation (SDF), also referred to as Stellar.org, is a nonprofit responsible for maintaining the Stellar network. Operational costs are covered by the 5% cut of total Lumens supply retained at launch, in addition to tax-deductible donations from the public.

Stellar began as a fork of the Ripple protocol after Jed McCaleb left the project citing philosophical differences. McCaleb’s breakup from Ripple was a messy affair, ending with him attempting to sell the entirety of his 9 billion ripples, a move that would have had significant impact on the XRP market. McCaleb later settled with Ripple in a court deal that would limit the amount of XRP he could sell at one time.

Though originally based on code borrowed from Ripple, Stellar underwent a complete network upgrade in November 2015 after claiming there were flaws in the underlying Ripple consensus mechanism. Ripple’s chief technology officer Stefan Thomas responded with a blog post titled, “Why the Stellar Forking Issue Does Not Affect Ripple”, concluding “there is no threat to the continued operation of the Ripple network.” Stellar is no longer considered a fork of Ripple as it uses completely different code since the 2015 revamp.

Stellar, like Ripple, is a payment network first and a cryptocurrency second. Stellar uses its native cryptoasset, XLM, as a means to better transfer fiat currencies rather than attempt to replace them.

Stellar: PayPal on the Blockchain

On the surface, the Stellar payment network functions similarly to PayPal. First, users deposit money onto Stellar through a trusted intermediary like a bank. Stellar then credits their account with the appropriate amount, and users are then free to send those funds to anyone on the network.  

Stellar’s payment network differentiates itself from PayPal by its use of blockchain technology. Blockchains provide numerous benefits to traditional servers, including decentralization, transparency, and security. Perhaps the most enticing reason to choose Stellar over PayPal is Stellar’s extremely low transaction fees. Transaction fees exist within Stellar for the sole purpose of preventing network spam, and are therefore very cheap. Base fees are currently set to .00001 XLM — a fraction of a penny.

Stellar can maintain these low fees because all transacting parties reside on the same network. This is in contrast to transactions through traditional financial systems, which are often subject to a long series of detours, racking up multiple conversion and processing fees along the way to their destination. Stellar is cheap, even compared to other cryptocurrencies, because there are no miners to pay. Transaction fees collected on Stellar are later redistributed back onto the network via inflation — more on that later.

Multi-Currency Transactions

Stellar makes international payments easy with their multi-currency transactions. For example, say you want to send me euros using your USD balance. This transaction can be completed a few different ways:

  1. Currency conversion. The Stellar ledger features a native orderbook for each currency/issuer pairing to deal with foreign exchanges. In this case, Stellar would look for someone wanting to sell EUR for USD and automatically complete the trade.
  2. Use Lumens. Lumens (XLM) are the native cryptoasset of the Stellar network. XLM can act as a bridge currency in situations where there isn’t an active market between two currencies. If nobody wants to sell EUR for USD, Stellar will instead look for a USD -> XLM offer, as it simultaneously seeks a XLM -> EUR offer. The network then makes those exchanges and completes your USD -> EUR conversion.
  3. Finally, if the previous options have been exhausted, Stellar seeks out offers available on the network that eventually lead to the desired conversion. Here’s an example path of what this process can look like: EUR to AUD, AUD to BTC, BTC to XLM, XLM to USD.

Stellar Consensus Protocol: How Transactions Get Validated

Stellar may not reward its validators for maintaining the blockchain, but they still have a job to do. Stellar nodes use a modified ‘federated byzantine agreement’ form of consensus, called the Stellar Consensus Protocol, to determine if transactions are valid or not. In this system, every node maintains a list of other nodes it wants to listen to, resulting in a chain of nodes essentially saying, “I trust this transaction so long as X amount of my friends also trust it”.  

The Stellar Consensus Protocol is considered an open membership system: anyone is free to become a validation node, and nodes can choose which other nodes they wish to follow instead of being fed a list from a central authority. This makes Stellar’s network design more decentralized than similar networks using delegated byzantine fault tolerance (dBFT) such as Ripple or NEO.

That being said, at this point in time Stellar only has 20-30 nodes powering its network. This lack of participation is a common side effect of systems choosing to forego economically incentivized consensus mechanisms. Validators exist on Stellar solely because they are willing to dedicate their resources for the sake of the network.

Inflation On the Stellar Network

New lumens are added to the Stellar network at a rate of 1% each year. The inflation mechanism runs on a weekly basis, distributing the inflation pool to any account on the Stellar network receiving over .05% of total votes. The size of the inflation pool is determined by the following formula: (number of lumens in existence)*(weekly inflation rate) + fee pool. Votes are weighted based on the amount of lumens you hold; 1 lumen is equal to 1 vote.

Every account has the option of participating in this voting process, but the lucky winners will need to earn a minimum of .05% of total votes — that’s 9,233,901 votes based on today’s circulating supply. Winners are paid out their share of the inflation pool; earn 5% of total votes and you’ll get 5% of the total pool. Some XLM holders have formed groups in which they combine their voting power to a designated account and split the earnings among all participants.

Stellar’s XLM is available on a variety of different cryptocurrency exchanges, including Binance and Bittrex. These two exchanges handle a combined daily volume of over $16 million in XLM alone; putting them behind only Korean cryptocurrency exchange Upbit.

There are a healthy selection of wallets capable of holding your XLM securely. Stellar.org lists a total of 11 compatible wallets, including 4 desktop wallets, 4 mobile wallets, and 8 web wallets. The safest place to store your XLM is in a hardware wallet. The Ledger Nano S is a good option that is compatible with XLM.

It’s worth pointing out the disclaimer on Stellar’s wallet page: “Stellar.org does not own, maintain or operate any of these wallets.

Stellar wants to become the standard method of sending money around the world. The team is taking a bottom up approach, focusing on money transfer and remittance companies instead of large, risk-averse banks. Stellar believes banks need to see the protocol succeeding elsewhere before they actually begin using the network. IBM has declared they are a believer, which is a pretty good start.

It’s Stellar’s opinion that the fees associated with moving money, especially across borders, have a disproportionate impact on the poor. Working families, for example, spend $44 billion every year on Western Union or similar middleman fees. Stellar sees this massive number as an unnecessary expense being taken from people by an outdated financial architecture.

Stellar finds itself standing alone in a middleground: not quite in the cryptocurrency crowd, and not quite in the legacy payment network crowd. Stellar is significantly more decentralized than PayPal, but with no incentive mechanism for validation nodes, it is unclear just how decentralized Stellar will remain. Stellar’s ultimate success will depend on its adoption by legacy financial institutions, and how the network will be able to scale. Assuming it succeeds, however, Stellar has the potential to revolutionize the way people transfer money.

The post What is Stellar? | The Ultimate Beginner’s Guide appeared first on UNHASHED.

Source: https://unhashed.com/cryptocurrency-coin-guides/what-is-stellar-xlm/

Blockchain

Binance Coin price falls to $26, what’s next?

Binance Coin price falls to $26 losing support at $27. Binance showing volatility period along with other cryptocurrency. Bitcoin price fluctuating associated with market The Binance Coin price line observed a move towards the downside on the 20th of September as the altcoin market saw a bearish momentum. The cryptocurrency fell towards the $26 level, […]

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  • Binance Coin price falls to $26 losing support at $27.
  • Binance showing volatility period along with other cryptocurrency.
  • Bitcoin price fluctuating associated with market

The Binance Coin price line observed a move towards the downside on the 20th of September as the altcoin market saw a bearish momentum. The cryptocurrency fell towards the $26 level, while it traded above the $27 mark for most of the 24-hour trade.

1-Day Binance Coin price analysis

Binance Coin is currently ranked 7 amongst the cryptocurrency as per its market capitalization. Per coinmarketcap.com, the cryptocurrency has a market capitalization of $3,770,154,431 US Dollars. The max BNB supply currently lies at 176,406,561. The cryptocurrency secured an all-time high of $39.57 US Dollars, while it’s all-time low was at $0.096109 US Dollars.

Binance launched the Binance Smart Chain on the 1st of September. The Chief Executive Officer (CEO) of Binance, Zhao, has discussed the decision of the company to add newer DeFi projects to the platform.

At the beginning of the day’s trade, the cryptocurrency traded at $27.08 US Dollars. The price stayed above the $26.8 level until noon on the 20th of September. The BNB price line fell to a day’s low of $25.58 in the evening of the 20th of September.

During the time, the Relative Strength Index (RSI) had dropped to lower values, thus depicting an oversold cryptocurrency. At the time of writing, the cryptocurrency was priced at $26.06 US Dollars on Binance.

Binance Coin technical indicators

The Bollinger Bands showed lower price volatility until 06:00 GMT on the 20th of September. The cryptocurrency traded above the $26.8 price level during that time. Near 03:00 GMT, the cryptocurrency can be observed showing increased price volatility on the smaller time frames. In the afternoon, the cryptocurrency fell bearish towards the $26 mark. At the same time, the Bollinger Bands showed increased expansion, as the price observed more fluctuations during that time.

Near the time of writing, the cryptocurrency held above the midline, while the Moving Average Convergence Divergence (MACD) line was about to slide below the signal line. Here, the histogram size appears to be increasing in the positive region. The technical indicator’s lines moved towards the negative region near noon and returned towards the positive region by 13:30 GMT. This repeated twice in the evening. During this time, the cryptocurrency exhibited a bearish bias. At the time of writing, the MACD stood at 0.010, while the Signal line was observed at 0.00025. The histogram was marked at 0.010.

UNI is a new governance token minted by Uniswap. The governance token was recently made live on Binance and Coinbase along with their iOS and Android apps. This allows customers to buy, sell, trade, or even store the token. UNI’s price has gone from $1.76 to $5.85. This marks over a 300% increase in its price after Binance and Coinbase’s listings. The market capitalization has gone up to $995 million US Dollars.

Disclaimer: The information provided is not a trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Ethereum network blockage soars with increased user activity

Ethereum network traffic reaches new levels ETH supply shifting towards smart contracts Ethereum network blockage drives gas price Ethereum users have been exerting immense pressure to the ethereum blockchain in recent days causing ethereum network blockage. The network has seen increased demand as users interact with smart contracts, AMMs, DEXs and many other activities leading […]

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  • Ethereum network traffic reaches new levels
  • ETH supply shifting towards smart contracts
  • Ethereum network blockage drives gas price

Ethereum users have been exerting immense pressure to the ethereum blockchain in recent days causing ethereum network blockage. The network has seen increased demand as users interact with smart contracts, AMMs, DEXs and many other activities leading immense transactional volume to the blockchain.

As a result of the massive congestion, ethereum transaction fees have gone through the roof. Moreover, the sky-high fees have directed investor funds to alternative layer ones, with arguments emerging on which ‘ethereum killer’ might tap a substantial proportion of the market.  

More ethereum held in smart contracts compared to exchanges

Furthermore, the Defi hype has established another fascinating trend for ETH besides the elevated transaction fees. Ethereum traders have been massively moving their holdings from crypto exchange platforms and transferring them to smart contracts. At the moment data suggests there is a greater number of Ethereum tokens retained in smart contracts than in smart contracts.

This actual trend might be affirmative for ETH’s price, as the tokens become harder to access for trading, which can result in a positive price action movement.  

Ethereum network blockage goes through the ceiling

DeFi is almost solely developed on ethereum and boosts the network’s demand through several features. The users keen to obtain tokens take advantage of AMMs or DEXs to acquire them. However, every single changeover needs authorization and a real swap. This procedure alone has coerced the ethereum network.

Notably, the yield farming trend has blended the procedures, with traders locking their crypto assets under smart contracts and cash reserves to make profits on their investment. According to blockchain analytics firm Santiment, the current ethereum network blockage is the highest it has ever experienced.

Moreover, users might have to fork out more than $60 in transaction fees to have their transaction handled without delay during pinnacle activity moments. Furthermore, Glassnodes data shows that ETH supply is shifting towards smart contracts, suggesting that the elevated gas price may not fade out anytime soon.  

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Blockchain

Bitcoin price sees a drop below $10800

Bitcoin price sees a drop below $10,800. Bitcoin likely to get back to a new price high. The Bitcoin price line was observed under a downtrend on the 20th of September. The cryptocurrency made its way towards the $10800 mark. The price line varied between the $10760 and $11160 levels over the 24-hour trade. 1-Day […]

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  • Bitcoin price sees a drop below $10,800.
  • Bitcoin likely to get back to a new price high.

The Bitcoin price line was observed under a downtrend on the 20th of September. The cryptocurrency made its way towards the $10800 mark. The price line varied between the $10760 and $11160 levels over the 24-hour trade.

1-Day Bitcoin price analysis

The cryptocurrency’s price fell to at day’s low of $10775.14. The king of cryptocurrency was priced at $10873.64 US Dollars on Bistamp at the time of writing. The 24-hour price low was observed at $10873.64.

What’s next for the BTC price?

The Trading View analyst X Force Global is of the opinion that the BTC price line will either rise past the $11200 mark to continue the bullish ascension, or the cryptocurrency will fall below the rising trendline which is currently the support level for the cryptocurrency king.

The cryptocurrency is facing a strong resistance near the support-turned-resistance between $11200 and $11300. The Relative Strength Index (RSI) has also depicted a bearish divergence on the 4-hour scale. The technical indicator lies near 60.00. Bitcoin trades above a rising wedge support level since the 9th of September. The price line has recently observed the bearish divergence and it dropped towards the support mark.

Per the analysis, if the cryptocurrency breaks below the rising support then the price will see a turn of the trend, which will allow BTC to return towards the support mark once the price stops falling.

Can Bitcoin rise to $12000?

The Trading View analyst Rocket Bomb is of the opinion that the BTC price will rise towards the $12000 level after observing a few sideways movements.

The cryptocurrency has observed a buy signal on the Moving Average Convergence Divergence (MACD) technical indicator. The blue line has crossed above the orange line. The analyst believes that the cryptocurrency will rise towards the $11600 level at first, which will be followed by a pullback towards the $11000 mark. In the long-term trade, Bitcoin is expected to rise towards the $12000 resistance level with a target price of $12069.17.

What to expect from Bitcoin?

The Trading View analyst Alan Masters believes that Bitcoin is currently facing resistance from the 200-Day Moving Average (200MA) near $11100. The crypto analyst is of the opinion that the price will either fall towards the $10300 soon, or the $9800 level later.

Per the analysis, the 200MA is depicting rejection on the 4-hour chart. The MACD line has also shown a bearish cross on its scale, while a bearish divergence has also been recorded between the trading pair and the MACD. The cryptocurrency’s price appears to be breaking below the 10-Day Exponential Moving Average (10EMA). All of this suggests that the cryptocurrency is about to fall bearish.

Bitcoin to see a price fall ahead?

The Trading View analyst GoldFxcc is of the opinion that the BTCUSD trading pair is currently inside a descending parallel channel. The analyst believes that the BTC price will fall towards the $9000 mark soon.

The cryptocurrency fell below an important support line on the 3rd of September. Per the chart above, the BTC price has tested the support-turned-resistance near $11300 after touching the bottom of the descending parallel channel.

The analyst believes that the cryptocurrency has run out of the bullish momentum, and the cryptocurrency will now fall towards the $10600 support, followed by the $10200 support, and eventually the bottom of the descending channel. The BTCUSD trading pair will have to break below the descending channel and fall towards the $9000 mark.

Disclaimer: The information provided is not a trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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