Simply Explained: Stellar Consensus Protocol
Nope, it’s not Proof-Of-Work nor Proof-Of-Stake
Author’s Note ✍️
This article requires the reader to have some previous knowledge of distributed ledgers.
Additionally, SCP is a complicated concept to grasp and this article is meant to be an introductory step into understanding the protocol fully. Simplifications were made to limit the complexity of the text and hence may not be technically correct in its entirety. Mathematical proofs and theorems were not displayed for the same reason.
Introduction & Key Concepts
Before we dive deep into the technicalities of the SCP, there are a few terms we should cover:
Stellar Network
Stellar is a platform released in 2014 with the aim of utilizing blockchain to provide more accessible financial services to people worldwide. It has IBM, Deloitte and Stripe as partners, and its token, called Lumens (XLM), has the sixth largest market cap of all cryptocurrencies (as of this writing). The Stellar Network boasts very fast transactions with extremely low fees, and while its focus is on providing a platform for cross-border payments, it also permits the creation of smart contracts.
