What is Stellar?
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Communication between financial institutions is slow and costly, I mean you try and send money to either one of my accounts (one you don’t have) and see how long it takes to get to me. However we don’t know each other so we’d use paypal (safest) to transfer money for X. Even the speedy paypal with buyer and seller protection is slow to have money available in your account, venmo is faster but you lose security, same with FB pay etc. Stellars [https://finance.yahoo.com/quote/XLM-USD/ ] vision is to unite the world’s financial infrastructure, so many can flow quickly and easily between banks, businesses and people.
The internet created a movement so people could share information globally, Stellar (https://finance.yahoo.com/quote/XLM-USD/) is working to do the same for currencies. Creating a seamless way to convert, transfer, and exchange globally in just a matter of seconds.
My first thoughts as I go through this is what about money laundering and how can Stellar help prevent it since a lot of time spent transferring money isn’t just different payment processing flows but that the money transfer must go through the feds, as an ACH (automated Clearing House) transfer. So how can Stellar prevent the platform from becoming a laundering haven and why the government and banking institutions should trust such an infrastructure? I will leave this question to you!
What Are Stellar Lumens (XLM)?
The Lumen is a Native Asset of the Stellar Network connecting banks businesses and persons by a globally translated currency, we all know how slow and expensive it is to wire transfer globally. The Stellar Lumen Crypto Network makes this possible however I am still questioning how this will work with anti-money laundering processes.
I am hoping these videos explain how that will work as I do see a dior need to have the money checked by a trusted 3rd party, but that just leads right back to our flawed current financial crises. Maybe we just completely stay decentralized as the powers in play are the ones that ruined the market and the gold standard as it was. It was people that ruined the dollar, it was politicians! So maybe we all kick the government to the curb, let money do what it will and just bust people for what we catch them doing? If someone is going to laundry money it’s going to happen and has proved our system doesn’t fix it anyway. Why should we pay for it? I say we burn those bridges and start fresh with our decentralized non government controlled assets and trade as we choose! Why do we as human beings have to pay to give another human being money? Just because some bad eggs did bad things and continue to do so with or without the government’s hands on it. The only difference is the Cytpo way means no more needless money given to uncle SAM, and more money in your actual pocket, whether digital or printed!
You can transfer money into the decentralized Stellar Network and the money is exchanged in the currency that is requested for the recipient automatically. IF there are no good offers to exchange directly to the requested currency.
Lumens will act as an intermediary and offset the exchange from the sending currency to the requested currency in just a few seconds, with just a $0.000001 as a fee that is looking pretty promising and I would love to see this replace our current exchange methods as I am tired of waiting to send money just from state to state, and being fee’d so heavily just to transfer our money to and from friends and associates.
It also protects the network of spam by using minimum balances kept in Lumens that are low enough that disincentive spammers but show normal to legitimate users.
What is Remittance and What Makes it Stellar?
Remittance is money being sent to support family members in another country with over $600 Billion US dollars in remittances each year. This is typically done by third party transfer services that cost so much in fees and take a few days to show up in the recipient’s account. The average fee for Remittance transfers is about 7.1% of the transaction amount.
Using the Stellar network would mean the money would be converted to XLM and then transferred to the recipients account after it is converted into the desired currency by using a built-in order book that exchanges the assets. What a vision this is the future of global currency transfers and we are looking at it being built right before our eyes, IT is pretty amazing!
How Banks, Businesses, and People use Stellar?
Let’s talk about the entities that build Stellar and who uses the platform and how it works. First let’s go over Banks.
A bank first sets up a Stellar account the bank would then need to implement their infrastructure to use Stellars Network using Stellars built in tools. I am guessing they use a series of services that connect via the banks API and the Stellar Network API.
The bank can then convert their assets into Stellar Lumen Tokens that allow customers to deposit currencies at said bank and convert or store the currency or token within the bank.
Anyone can Transfer, Store, and Trade Stellar Tokens. So the banks can take a dollar, exchange it for a token and transfer it around the world and transfer/exchange it back to a dollar again with very very little fee’s, while this all happens in a matter of seconds!
Let’s talk about how this works for businesses let’s say Jeunesse Global {HTTPS://WWW.JEUNESSEGLOBAL.COM} they already allow users globally to buy and sell products and build points globally with each other. Right now they convert and exchange using services local to the countries market currency commissions. However if they were to use Stellar they could use built-in tools to communicate with Stellars API and make global money transfers within seconds for ALL users at ALL times, using a single currency.
To do this Jeunesse Global would use Stellar to create a NEW token like JNS Tokens. This would be a new cryptocurrency running within the Jeunesse to Stellar infrastructure. This would create a new economic market for the newly created Jeunesse economy and reward it’s family and customers.
Now we have the users of Stellar, a user of stellar could be browsing Jeunesses newly updated website of products and see a sale on M1ND by Jeunesse [https://www.jeunesseglobal.com/m1nd | https://www.jeunesseglobal.com ] and the user may not have any JNS Tokens left, users just exchange and convert tokens from their Stellar account directly to JNS Tokens on the Jeunesse website and no matter where the user is in the world they have just transferred and exchanged global currencies in a matter of seconds.
You can exchange and trade for Stellar Lumen Tokens using any currencies, cryptocurrencies and even real-estate. This is the FUTURE!
How Stellar Protects Digital Assets?
Since it runs as a decentralized network, no single entity can turn off or manipulate Stellars Network, being it is made of independent computers that run stellars software.
It is different from bitcoins network as bitcoin competes with each other to validate transactions, which is termed as bitcoin mining, using rigs that are expensive and energy. When a bitcoin miners disagree, it causes a split and has happened in the past with ETC ETH and BTC and BTC cash.
Stellar relies on cooperation rather than competition in the network since all users of the stellar platform create and connect to the stellar network that it creates. It processes by it’s close network neighbors and keeps a list of transactions. This process goes on between the network on agreeing computers as WEB of agreement as the process goes through and is sent back a handshake saying we are all in agreement this transaction is complete. This process is very similar to how the web transfer protocol works, the application sends a request, it is received by the closest server that may send the data around and around and back to get a successful code 200. This pattern guarantees network safety, by cross checking each network by a very serious protocol.
This agreement system is called the Stellar Consensus Protocol (SCP)
!IMPORTANT DISCLAIMER
I am by no means a finance expert or even close to, I am an inspiring Software Developer and Innovative Person. I am just writing blogs as I research and stay up to date with News, Trends, and What my opinion is and that IS ALL! Take what you will I am by no means giving advice. Other than please don’t invest in risky stuff if you aren’t willing to lose that money.
Happy Days and have a wonderful Valentines Day, Good Luck on your Ventures!