Case study class homework
Stellar was founded in 2014 by Jed McCaleb and lawyer Joyce Kim, Jed was also the Co-Founder of Ripple (XRP). The idea behind Stellar is being able to create a CryptoCurrency that can reduce transaction costs and serve as a bridge between all types of currencies. Stellar uses the lumens from direct developer funds to advocate and fund stellar.They also did not raise capital from the public to launch but instead took $3 million from stripe to launch the blockchain.
The goal for Stellar is to allow anyone in the world to be able to make cross-border transactions among ANY currency. These transactions are to be cheap, effecient, and reliable. Those 3 factors are what sets Stellar apart from most other crytpos and blockchains. Stellar now uses the Stellar Consensus Protocol (SCP), allows high transaction throughput by removing need for nodes to “mine” like Bitcoin does. It uses “quorums”, a set of commonly trusted nodes, arranged hierarchically based on the number of nodes that include them in their quorum slice to reach consensus and validate blocks. The ecosystem of SDF-friendly financial institutions and wallet companies that are deemed more “trustworthy” due to the large number of quorum slices they inhabit.
Stellar is in the Blockchain domain, it is ranked among the top with other CryptoCurrencies such as Bitcoin, Ethererum, and Cardano. Its software is an open sourced decentralized platform, meaning not a sinlge person owns it but is instead owned by the public.Despite the millions of transactions per day, it is still energy-efficient more than other blockchain systems. It is capable of running around 1000-5000 transactions per second which is 50x-500x times faster than BTC and ETH.
Stellar is known to partnership with multiple companies such as IBM, Stripe, SureRemit,AirTM, and Deloitte. The relationship with IBM was to implement blockchain banking worldwide. Partnerships with multiple companies could be a strategy to make Stellar more utilized globally, these partnerships may be able to make larger financial firms and banks more open and familiar to the world of block chain. Companies in Crypto and blockchain have different end user goals but ideally for the population as a whole is to migrate to the digital side of finances. Stellar has only 7 developers that control the majority of the work which has decreased over the years which has caused questioning about future development and stability. Stellar is still ranked high with its competitors , but there are some risks that linger around for the time being which brings it down on the list. There is also no financial incentive to become a node like there is with mining bitcoin, which could possibly lead to a major lack of nodes.
I would personally recommend stellar to offer pay incentives such as mining with BitCoin or staking ada coins with cardano and getting weekly rewards. This would influence more developers and programs to offer their products and ideas to stellar which could stabilize the platform to perfection. Something that comes to mind is a staking pool, stellar should rewards in shared lumens since they do hold 60% of the supply. I’m not sure if that would be possible or if it’s already being worked on but there are quite a few project groups working on new features right now.