Stellar acts as a decentralized exchange where users can send and receive money in any currency of the choice whether it’s digital currency or real-world currency founded in 2014 by Jed McCaleb. For real-world currency, it effectively cut out the middlemen namely banks or money exchangers. It generally takes a few minutes for processing, greatly reducing the time for international money transfer. A collection of Stellar transactions is what makes up a smart contract. Lumens also are known as XLM is the native currency of Stellar. It has a public and private key in an account in which the public key is like a bank account, everyone can see it but the private key is also known as the secret key is like PIN, other than account owner no one should know it.
Stellar contribution in society is enormous because of stellar the conversion of not only cryptocurrencies but real-world money as well has become so easy and time-effective. It works with Delegated Proof of Stake and the main security for the market are Digital assets that are protected in Stellar. The nodes cooperate to confirm legitimate transactions and prevent malicious ones by using Byzantine Generals Example, which states that every node must have some fault tolerance level, the network should still be up and running despite the presence of few faulty or malicious nodes.
But in market some will say how to trust the other that they will return the money in exchange of lumens or vice-versa, so here comes the role of trustline, by creating the trustline between the issuer and distributor account the bond is created that the exchange will take place, if distributor or issuer decline’s at last moment then the issuer gets the return by Stellar and in return Stellar cut’s minimal percentage of lumens from account for exchange or return at last moment which is very minimal compared to middlemen percentage.
Market also rely on Stellar because it’s more trustworthy and either full transaction will take place or no transaction will take place, there is nothing as half the transaction happened and then due to some interruption half of it got delayed or never happened, this is one of the advantages of stellar.
Stellar could contribute to society by developing a Smartland. Smartland is an idea, for the land which people want to sell or buy. This land could be in any country as sellar nature is to deal in multiple currencies so there is no issue of currency exchange as whatever currency exchange rates are suitable to people, they can directly see the rates and can buy or sell the land in exchange of whatever currency they would like to have. These exchange will be based on trusted buyers and issuers as trust in stellar have different models. And if a person is an asset issuer then trust can be checked by many models, one of the famous models is using ‘KYC check’. Through this people can have landed in foreign countries in exchange for currencies of sellers demand also.
Here are some advantages of using Stellar:
1. Stellar is scalable:
Stellar boasts the best combination of transaction costs, transactions per second, and average settlement time of any major blockchain in stellar. The average cost of a Stellar transaction is approx. 1/100,000 of a penny. Stellar has now till achieved 10,000 transactions per second and with an average settlement time of 5 seconds. This is incredible for on-chain settlement and international transactions.
Payment and state channels were the only way to achieve the necessary speed and scalability which is why roadmap defined a path to implementing such technologies for the Data ecosystem. After utilizing an early form to support nearly 100,000 users, it became clear that the technology will take time to be perfect. Additionally, there are very valid concerns about the long-term decentralization of payment channels networks. Rather than waiting to see how things play out, $DALA users and transactions on-chain could be bought in, further decentralizing transactions, while still achieving the fast, low-cost requirements.
2. Stellar brings liquidity:
Once an asset is issued on Stellar it can be traded using the Stellar native currency. This will enable users to not only exchange $DALA with $XLM but also it could provide pairs with ETH, BTC, BCH, EOS, and more. Moreover, Stellar supports fiat currency assets. That means that Stellar can facilitate liquidity between $DALA and ZAR, UGX, USD, or other currencies where users live.
Additionally, even currencies that $DALA is not paired with can have exchange liquidity. It has built-in multi-hop payment routing that will support up to 6 hops and Once $DALA begins scaling in any geography, it will have the liquidity infrastructure to support its growth as long as there are local participants in this network.
3. Stellar enables smart contracting:
Stellar enables smart contracts to be developed as well as executed. Though, nowhere near the Turing complete capability of Ethereum, Stellar’s smart contracting environment will enable the development of a new Dala Network protocols. The first Dala protocol to be built on Stellar will be Soko, it’s a decentralized marketplace for digital goods and services.
4. Stellar support ecosystem expansion:
The Dala Network will become more robust and more valuable with each additional user and geographically served. No one entity can be relied upon to drive this growth, so new and existing companies must be attracted to this Network. One of the greatest elements of Stellar is that it has the tools in place to support the engagement of existing financial institutions, these can act as anchors and issue particular assets for which they have liquidity.