In four words or less: Digital IOUs

Stellar (XLM) is an open-source protocol for exchanging money instantly. Stellar is positioning itself as the future of banking. Stellar connects people, payment systems, and banks with a focus on the developing world. It was founded in 2014 by Jed MCaleb (the original founder of Ripple) and Joyce Kim. The whitepaper and code were released in April 2015, and the upgraded network went live in November. Stellar's coins are called lumens, or XLM.

What problem does Stellar solve:

Like Ripple, Stellar wants to make global payments seamless, instant and at near zero cost. Ripple focuses more on payments between institutions, while Stellar is geared towards payments between individuals. Stellar is focused on helping connect the developing world to low-cost financial services to fight poverty and develop individual potential.

Properties of Stellar:

  • Transactions on the Stellar network resolve in 2-5 seconds with minimal fees
  • You can send any currency via Stella and have it converted at the other end to any other currency
  • org operates as a nonprofit organisation. Their mission is to connect people to low-cost financial services to fight poverty and maximize individual potential
  • Stellar is based on a consensus algorithm rather than mining
  • Stellar claim to be able to process 1000 transactions per second 

Adoption and penetration:

Stellar’s existence as a non-profit has encouraged a number of non-profit organisations and businesses to implement Stellar in their financial infrastructure, especially in the developing world. In October 2017, Stellar and IBM entered into a partnership to research ways to increase the speed of global payments. Stellar is the 8thlargest coin by market cap.

Management and governance:

The Stellar Development Foundation is a not-for-profit organisation. The SDF aims to provide better financial access to the world’s unbanked population.

Risks and limitations:

Critics argue that the Stellar network is not truly decentralised, and therefore doesn’t represent the spirit of distributed ledger technology. 

Competition: Ripple (XRP)