Jed McCaleb and Joyce Kim created Stellar with a purpose. That purpose was to provide financial services to who they named “the unbanked.” This term was created to reference people who had no options for banking. These individuals had no way to safely save money, conduct international transactions, and write checks.
This idea came from the information Jed McCaleb had about cryptocurrency and his thoughts on how unfair the financial systems were. People who from the underdeveloped, less-privileged parts of the world had to resort to hiding their money in their homes simply because banks and similar institutions didn’t exist where they lived. Stellar has already made great progress in eliminating this problem by having their system implemented in these countries.
Stellar has created a method to use cryptocurrency and blockchain technology in order to exchange currencies and conduct transactions. This system can operate much cheaper than current transaction methods. It also operates much faster than normal methods. This is due to its blockchain coding, which utilizes a decentralized method of record keeping. Instead of relying on a bank to keep track of transactions and funds, Stellar’s records are kept on dozens of machines, storing identical ledgers on each machine. This is the system which makes all cryptocurrencies possible.
Stellar is quite different from other digital currencies though. Unlike bitcoin, Stellar doesn’t use data mining to create new coins. Stellar simply issues the coins, 100 billion coins at the creation of the organization, and new coins will be issued on a 1% inflation rate.
Ultimately what makes Stellar different from more wide-spread methods of banking is the elimination of expensive fees. Stellar doesn’t require paperwork, credit scores, deposit fees, transaction fees, or any hidden fees.
Stellar can’t operate alone. It needs organizations all over the world to implement the Stellar system. Recently, Stellar teamed up with Oradian to create a transaction system in Nigeria. According to The Gates Foundation, nearly one-quarter of the entire Nigerian population had no access to banking options; Stellar has done its part in helping Nigeria. 300,000 individuals in Nigeria now how access free financial transaction services.