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Stellar FAQ
What is Stellar (XLM), and what makes it unique in the crypto space?
Stellar is a decentralized public blockchain platform. It provides cheap cross-border payments, connecting financial institutions and focusing on financial inclusion and interoperability.
How does Stellar's consensus mechanism work, and why is it different from Bitcoin's?
Stellar employs Stellar Consensus Protocol (SCP), which is actually a construction of the Federated Byzantine Agreement (FBA). It differs from other famous mechanisms (PoS and PoW) in a way that it relies on the agreement of trusted nodes. It's much faster and more energy-efficient than Bitcoin's.
Can I use XLM for everyday transactions and purchases like Bitcoin?
XML offers low fees and quick confirmation times, so it's pretty much suitable for everyday use, even for purchasing Bitcoin.
What's the significance of Stellar's "anchors" in its network?
Stellar's anchors accept deposits in fiat and send the equivalent amount but in digital assets to users.
How does Stellar enable cross-border payments, and what advantages does it offer over traditional methods?
Stellar enables cross-border payments via the blockchain technology. The main advantage is that transactions happen within a few seconds. Moreover, Stellar also provides low fees.
Is XLM's supply capped, and how does it affect its value?
XLM has a fixed supply. In October 2019, the community voted to eliminate the annual increase, so the total XLM's supply stands at about 50 billion coins. If the demand is high, the token's value increases. If the demand is low, the price is likely to drop.
Can I stake XLM to earn rewards or participate in network governance?
No, you cannot stake XLM as it employs Stellar Consensus Protocol (SCP), which makes Stellar an open-source system.
What's the role of the Stellar Development Foundation (SDF) in the ecosystem?
SDF is responsible for the development and promotion of the Stellar network. It supports the blockchain's growth and adoption, shapes the strategic direction, and manages funding.