New cryptocurrency to take on Bitcoin and FIAT

2 Payment and Bitcoin executives have come together to offer a new decentralized payment system with its own cryptocurrency included called Stellar.

Jed McCaleb co-founder of Ripple and now defunct BTC exchange MtGox has partnered with Stripe CEO Patrick Collison to form the “Stellar Development Foundation”. Stellar acts as its competition, Bitcoin, by offering P2P transfers on a decentralized payment network. A major difference is the network allows for transfers of digital and traditional currencies and will be converted to Stellar and vice versa in real-time. Supported currencies include USD, euros, pesos, and even Bitcoins.

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This means at points the cryptocurrency acts as vehicle for traditional funds. Also, with the convenience of transferring back and forth from Stellar to FIAT offers a more easy-to-access native experience.

Stellar received $3 million in funding from Collison’s firm Stripe. The open source based protocol currency will be based on gateway institutions to run a decentralized network of computers to effectively manage and validate a public record of transactions.

Unlike other virtual currencies like Bitcoin and Litecoin, Stellar will not cater to miners. Distribution will begin with 100 billion Stellar being made available and having 95% being rolled out to users, for nothing in return.

Stellar distribution will be done as follows:

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-50% distributed to people who sign up for an account

-25% distributed by other non-profits

-20% given to current Bitcoin and Ripple holders

*The remaining 5% will be given to early adopters in the charity and non-profit sector.

According to Executive Director of the Stellar Development Foundation Ms. Joyce Kim, the main idea behind Stellar is to offer a digital currency free of charge to help boost adoption. By free distribution, Stellar has overcome the 2 primary obstacles for Bitcoin adopters to overcome, high exchange rate due to currency volatility and the expense of mining which offers little ROI.

Do you think Stellar has a chance against long stays in the field like Bitcoin, or is it a little too little to late? Let us know in the comment section below.