Earlier in the day, Jed McCaleb took to Reddit to explain Starlight, a demo implementation of payment channels, on the stellar network. His explanation majored on three main reasons namely the need for privacy, scalability, and interoperability. While the three reasons that Jed provided are all great, introducing privacy is probably the biggest deal of them all. According to Jed, privacy is something that financial institutions will need when using public blockchains. To quote him,
“We imagine most of the use of Stellar will be between financial institutions. Almost all will have privacy concerns if every transaction is broadcast to the public network. Starlight gives them away to still transact in a trustless manner but keep the transactions off the public chain.”
Essentially this means that the stellar network now stands at an even better position, when it comes to adoption by financial institutions. That’s because no bank or any other financial institution will want to expose its activities on a public ledger. In essence, now that stellar is working on privacy channels, and it already has a presence in the financial markets, adoption could grow more exponentially.
This growth will be catalyzed by the fact that, it’s not just institutions that demand privacy features, individuals do too, and will demand it more in the future. Therefore, as more people begin to understand what blockchain technology is all about, privacy will emerge as one of the most important feature for any cryptocurrency, and stellar is planning early.
That’s not to say that the other two reasons why stellar is working on payment channels are not important as well. They are all equally important and will play a huge role in pushing up the adoption of the stellar blockchain. For instance, by working on off-chain scalability, stellar will be better positioned to handle the needs of the finance industry.
The finance industry handles thousands of transactions per second and it is a major challenge for blockchain platforms seeking adoption in this industry. This makes channels like starlight a viable solution that will push for the adoption of stellar in the trillion dollar finance industry.
Interoperability is another aspect to Starlight that gives stellar huge potential for adoption across industries. That’s because, there is no blockchain that will solve all problems on its own. In the future, the most successful blockchains will be those that are interoperable with other blockchains. This will make stellar more attractive in different industries for its versatility, and applicability in industries where multiple blockchain solutions are a requirement.
In essence, Starlight places Stellar (XLM) in a good position to grow going into 2019. It now stands an even bigger chance of dominating the cross-border payments market. For investors, this is an even bigger reason to be bullish on stellar. Stellar ((XLM) has shown signs of strength in the last few months. In spite of the sluggish price movements in crypto this year, stellar (XLM) has held strong above $0.20, and at one point hit a high of $0.33. Anyone invested in stellar for the last 4 months or so is still in the money, in spite of the crypto market being heavily bearish. With its latest developments, Stellar’s intrinsic value is now higher than ever before, and could rally big time in the next Bull Run.