A decentralised protocol based on open-source code-named Stellar is used to convert digital currency to fiat money both domestically and across borders. Lumen is a blockchain-based cryptocurrency that trades under the symbol XLM. Stellar's goal is to connect cross-border and all other financial institutions, assisting in payment transfers by drastically reducing costs and time. Both payment networks utilise the same protocol at first.
Stellar's core operation, like most decentralised payment technologies, is to maintain a network of decentralised servers with a distributed ledger that is updated every 2 to 5 seconds across all nodes.
The consensus protocol is the most noticeable difference between Stellar and bitcoin.
Even though Stellar's consensus protocol does not entirely rely on the miner network to approve transactions. Instead, it employs the Federated Byzantine Agreement (FBA) method, which speeds up transaction processing by utilising quorum slices (or a subset of the network) to check and approve transactions.
Each node in the Stellar network selects a new group of "trustworthy" nodes. A transaction is considered validated when it is approved by all nodes in this set. Stellar's network is reported to handle as many as 1,000 network activities per second thanks to this simple method.