Stellar

= "Stellar is a decentralized protocol for sending and receiving money in any pair of currencies. This means users can, for example, send a transaction from their Yen balance and have it arrive in Euros, Yen, or even bitcoin". [1]

URL = https://www.stellar.org/

Description

1.

By Michael J. Casey and Paul Vigna:

"Mr. McCaleb’s new project is a network system called Stellar that promises a bridge between the virtual and traditional currency worlds . It will use a decentralized network of computers run by so-called “gateway” institutions – banks and other financial firms — to cheaply and efficiently manage and authenticate a public record of transactions. Those gateways provide the exchange services that allow outside customers to send money to others anywhere in the world.

...

Like bitcoin and Ripple, the Stellar network will operate with an open-source protocol, meaning anybody can work to improve the software. Also as with bitcoin and Ripple, it will have its own internal digital currency, called stellar.

But Stellar is consciously different in some key areas.

One key difference is that 95% of the currency is being given away for free at the outset, the bulk of it from an initial issuance of 100 billion coins created by the not-for-profit foundation that will run the project. New coins will be later added at no cost to the circulation at a rate of 1% per year.

The decision to give away nearly all the coins was colored by Mr. McCaleb’s experience with Ripple, whose benefits as a groundbreaking technology were sometimes overwhelmed by the suspicions of digital-currency investors, some of whom derided it as a “pre-mined” scam. Whereas new bitcoins are constantly being brought into existence by “miners” who receive them as rewards for confirm transactions across network, Ripple Labs created the entire issuance of 100 billion of its own coins, known as XRP, in one fell swoop, retaining a large portion for the company and its founders. That was done so that a separate foundation, called OpenCoin, could coordinate release of XRP over time to designated gateways. But it inevitably created suspicions among some cryptocurrency enthusiasts.

...

Of the 95 billion coins to be distributed, half of those will be available free to applicants who place orders via Facebook. The other half will be reserved for charities working in the fields of economic development and poverty alleviation and non-profits that are early adopters of digital money.

As with Ripple, a key selling point for Stellar will be that it allows people to make payments with traditional currencies while using the efficiency of a cryptocurrency network to lower costs and speed up processing.

“This is probably the best way to bring the best of both worlds together,” said Ms. Kim.

The Stellar Development Foundation’s board is comprised of Mr. McCaleb, Keith Rabois, the former COO at smartphone credit card swipe provider Square, and Patrick Collison, the CEO of Stripe, a maker of software for payment processing.. The development team is led by Mr. McCaleb and David Mazieres, a Stanford professor who heads up the school’s Secure Computer Systems group. Advisors include Dan Kaminsky, Joi Ito, Greg Stein, Jackson Palmer, and Naval Ravikant.

Ms. Kim said the hope is that developers in different nations will tailor products and services around Stellar that will best serve their local communities.

The biggest goal of Stellar, she said, is to spur adoption of cryptocurrencies, with the team focused on overcoming three specific hurdles: education, access, and volatility." (http://stream.wsj.com/story/markets/SS-2-5/SS-2-594057/)

2. Joyce Kim:

"Stellar is a decentralized protocol for sending and receiving money in any pair of currencies. This means users can, for example, send a transaction from their Yen balance and have it arrive in Euros, Yen, or even bitcoin. We’re expecting to support the usual categories of transactions: payments to a merchant, remittances back home, or rent splits with a roommate.

You can hold a balance with a gateway, which is any network participant you trust to accept a deposit in exchange for credit on the network. Stellar also comes with a built-in digital currency, referred to as the stellar, which we’re giving away for free. The currency will have value (as determined by the market); however, its primary function is providing a conversion path between other currencies.

We hope that people will build applications on top of Stellar to help bridge the gap between digital and traditional currencies." (https://www.stellar.org/blog/introducing-stellar/)

Funding

By the Stripe company's Greg Brockman:

"Stellar's goal is to build a great transport layer for transmitting monetary value. Figuring out how to efficiently move money is something we support very strongly: Stripe spends a lot of effort integrating different banking and finance protocols in various countries (17 at last count). We've always considered it unlikely that these systems would be just as fragmented in twenty years. Bitcoin has already changed the world by drawing attention to the value of open, distributed protocols that enable the transmission and storage of money. Stellar aims to advance this success by providing a way to transact in one's currency of choice, whether that currency is fiat or digital.

We're very bullish on the cryptocurrency space in general, and expect that multiple systems will prosper. When the opportunity arose to help Stellar, we enthusiastically agreed. A couple of months ago, Stripe contributed $3M to help get the project going. In return, we received 2% of the stellars. However, the project is not run by Stripe. We just believe that a system with properties like Stellar's should exist in the world, and we heartily encourage anyone interested to participate in its development. We're going to auction a majority of our stellars to other interested companies, with any net profits being returned to the Stellar Foundation—please get in touch if your company might be interested." (https://stripe.com/blog/stellar)