What it offers
Stellar is a multifaceted blockchain network that offers payment, token launch, smart contract, and DEX solutions. The Stellar network was launched in mid-2014 and the native currency is called Lumens (XLM).
Funding
Stellar received $3 million in seed funding from Stripe, and there was no ICO to launch the token. 100 billion Lumens were initially created (but only 5 billion were initially released), and the inflation rate is held constant at 1% per year, based on the total XLM supply.
Company Message
(stellar.org) "Stellar is a distributed, hybrid blockchain that is fully open-source. It is infrastructure that exists to facilitate cross-asset transfers of value, including payments. With just one integration into the Stellar Network, you will join an open, global financial network where all actors – be they people, payment networks, or banks – have equal access & economic participation."
Anchors are simply entities that people trust to hold their deposits and issue credits into the Stellar network for those deposits. They act as a bridge between different currencies and the Stellar network. All money transactions in the Stellar network (except the native digital currency of lumens) occur in the form of credit issued by anchors.
Anchors do two simple things:
You have to trust the anchor to honor your deposits and withdrawals of credit it has issued.
Anchors exist in the pre-stellar world now. For example, to use Paypal, you deposit money in from your bank account. Paypal then gives you credit in your Paypal account. You can now send that Paypal credit to anyone that trusts Paypal (anyone with a Paypal account). Someone that received your Paypal credit can convert it to real money using Paypal by withdrawing it to the bank.
Anchors perform the same function in Stellar. The difference is, all the “Paypals” and other anchors are operating on the same network so they can all transact with each other now – this makes the system way more powerful. People can now easily send and exchange all these different anchor credits with each other.
The Stellar ledger is able to store offers that people have made to buy or sell currencies. Offers are public commitments to exchange one type of credit for another at a pre-determined rate. The ledger becomes a global marketplace for offers.
All these offers form what is called an orderbook. There is an orderbook for each currency/issuer pair. So if you are wanting to exchange Virgin Bank/EUR for bitstamp/BTC you look at that particular order book in the ledger to see what people are buying and selling it for.
This allows people to not only buy and sell currencies in a foreign exchange like manner but also to convert currencies seamlessly during transactions.
Like a traditional ledger, the Stellar ledger records a list of all the balances and transactions belonging to every single account on the network. A complete copy of the global Stellar ledger is hosted on each server that runs the Stellar software. Any entity can run a Stellar server.
These servers form a decentralized Stellar network, allowing the ledger to be distributed as widely as possible. The servers sync and validate the ledger by a mechanism known as consensus.
Stellar was initially released as a fork of the Ripple protocol, which uses a consensus mechanism based off Practical Byzantine Fault Tolerance (PBFT). Then, within a year of Stellar’s release, the Stellar Consensus Protocol (SCP) whitepaper was released by Chief Scientist David Mazieres, utilizing a concept called Federated Byzantine Agreement instead of PBFT.
The implementation of SCP changed the network’s entire code base, meaning there was no longer a significant association with the Ripple protocol. There are a few notable differences between PBFT and SCP. The main one is that PBFT is a closed system of nodes, where network validators are pre-determined by a company or group (e.g. Ripple Labs). The Stellar team realized the shortcomings of operating a closed system and designed the SCP as an open network where anyone can operate a node and become a validator. Nodes in the SCP are free to choose which other nodes they trust, and a sub-group of nodes trusting each other is called a quorum slice. The quorum slices are then linked through mutual nodes and eventually form a quorum, or network consensus.
A decentralized network consists of peers that can run independently of each other. The power to transmit information is distributed among a network of servers, instead of being driven from one primary source.
This means that the Stellar network does not depend on any single entity. The idea is to have as many independent servers participate in the Stellar network as possible, so that the network will still run successfully even if some servers fail.
Ledger
As for XLM hardware wallet support, we have the Ledger Nano S. The first step after purchasing it is unboxing your device and checking if you have received all the accessories that come with it. Once you have unboxed your device, you need to configure it and initialize it before being able to use it. Despite the fact that some new users mind find it confusing, process is quite simple and will hardly take about 20-30 minutes post which you will be set to use your Ledger Nano S device.This video does a pretty good job of explaining how the setup works.
Always make sure you’re purchasing your device from an authorized vendor, otherwise you can end up with a replica or outright get scammed.
BlockEQ
If you don’t like StellarTerm, you can try BlockEQ. With this BlockEQ you can send, receive, store and even trade XLM on Stellar’s decentralized exchange which is an excellent option to have.You can also store Stellar tokens in BlockEQ wallet and control your private keys with a 12-24 word recovery phrase that you get at the start.For enhanced security, you get features such as QR code address display and PIN code.
We have some great options for online Stellar wallets
Stronghold
Stronghold is a distributed exchange built on the Stellar Network. Their platform offers the ability to trade cryptocurrency. Stronghold currently supports Bitcoin, Ethereum and Lumens. The fees are quite low and the wallet has an intuitive interface. The wallet is developer friendly and offers best in class security.
StellarTerm
Another great choice would be StellarTerm, which is a specialized XLM wallet. StellarTerm is a web based trading client. With full ability to interact with the Stellar distributed exchange. It aims to make it easy and safe for users of any skill level to trade on the Stellar network. One big feature is that it has a up-to-date list of all the anchors so that users will have a simpler and safer experience. StellerTarm also has its very own desktop client, doubling as a desktop wallet.
CEX.io
Currently, the only reputable broker we can vouch for in order for you to purchase XLM with credit card is CEX.io.
However only buy with fiat if you absolutely must, as CEX charges quite big fees for credit card transfers. For example, CEX.io can take up to an 7% fee from the amount of fiat currency you pay for a service. For example. if you buy $1000 worth of XLM you'll get only $920 worth. This means that the high exchange rate you see on CEX.io already includes the service fee within it, but no other fees will apply.
The service itself is reputable and has been around for quite sometime, so don't worry about being scammed.
If you aren't willign to risk it, you can always go with the alternative route of buying BTC on Coinbase and then swapping it for XLM on either Binance or Bittrex
