Why IBM is investing big on Stellar (XLM) – Federated Byzantine Agreement simply explained

Stellar (XLM) has been one of the most effervescent topics in the crypto space for a few months now mainly because of IBM related news. News such as IBM providing 9 key validators for Stellar’s network spread across the globe and also a string of press releases by IBM mentioning Stellar (XLM) as one of spaces in blockchain they are exploring the most.

One of the reasons for this surge in interest for Stellar (XLM) derives from the fact that, right now, a lot of people seem to be wanting in on tokenized assets. Despite the current dip we’re experiencing the digital era is still overtaking us and the preference for digitalized assets is growing by the day. The concept of issuing stocks now seems slow compared to issuing a crypto token that represents clearly and concisely your ownership in the network/project.

There is still a lot of space to grow since the concept of digital assets is relatively new to us, and even though Stellar (XLM) and blockchain in general are already changing how we transfer value to each other, the concept of IoV (Internet of value) will be a reality, this can be seen from a mile away.

Stellar’s Core

What you might not know is that Stellar is actually a hard fork of Ripple (XRP) that was made in 2014 by Jed McCaleb, one of the core developers of Ripple that left the project. From this fork came two different ways of looking at the Byzantine Generals problem.

You might ask what this problem is and most people do, and it’s simpler thank you think. The Byzantine Generals problems is about the dilemma that was presented to an army of the Byzantine Empire where by surrounding a city had to reach consensus on whether they would attack the city or retreat.

The problem here is really about reaching consensus where it is impossible for every “soldier” to communicate amongst each other, since there were no phones back then. The approach to this problem nowadays can be answered in multiple ways and, thanks to technology, one of the first answers would be to create a central authority that would determine the consensus.

Bitcoin (BTC) decided to do things a little differently, and create a decision process where every voter is connected in a peer-to-peer network in a distributed ledger, and this brought a lot of advantages in term of security, trust and speed.

Ripple (XRP) and Stellar (XLM) decided to take things to a different level and by giving up on some features of Bitcoin, so they could focus on speed, they tried to answer to this problem in a different way. A lot of criticism has been thrown both ways by both projects as a form of a “brothers quarrel”.

How Stellar does it – Federated Byzantine Agreement

To answer to the general’s problem Stellar (XLM) developed the Federated Byzantine Agreement which is the main foundation of the Stellar Consensus Protocol (SCP).

This solution tries to solve the problem through creating smaller groups of trusted “soldiers” or nodes that select other trusted nodes and try to reach consensus between their own trusted group.

If everyone (every node) does this, and select a group of other trusted nodes you build a decentralized form of validation that leaves out the bad performers for not being included in the trust groups. The validations occur in a form of a cluster where the groups that need to verify the transactions are able to settle and validate the transactions in a faster fashion.

This is one the reasons why Stellar (XLM) is nearly impervious to a Sybill attack.

With this said, IBM knows that we as a society will no longer need in the future central authorities for reaching consensus because technology has provided us better and more reliable ways to do so.

Decentralization is Life, Decentralization is Love.