Can Lumens Be Mined?

Many of the beginners ask can Lumens be mined? Well, since Stellar Lumens is proof of concept-based, it cannot be mined. When we discuss ledger there has to be an agreement that the information registered is based on facts. In a case of the traditional centralized ledger, these agreements are simple: the centralized power which is the only one with access to the ledger, will claim the information true and that has to be accepted by users of the ledger who then trusts the centralized agent.

Regarding the distributed networks, this process is a little bit more complicated. In public blockchains, anyone can add information to the ledger and can just as easily verify if that information is true or not. The network has to reach a consensus and a general agreement has to be reached so the data is correct. This is not an easy task because the users and validators are unknown and cannot be trusted.

To reach a consensus among the untrusted parties and to confirm the validity of the data within the ledger, there has to be a protocol in place and will define how information is added to the registry. Here is how the consensus protocols come in. Bitcoin uses the proof of work to guarantee the validity of transactions and requires the use of resources meant for computational effort and to provide extra security for the network as well since the attackers will have to spend money in order to harm the network. Those who will work in favor of the network are encouraged to continue with the financial incentives.

Proof-of-work, however, has many disadvantages which have led to the creation of alternatives that pose a better option. Proof of Stake is one of the most used and known alternatives for PoW which is a category that contains the Stellar consensus protocol. The Stellar consensus protocol is the first implementation of the type of consensus protocol called Federated Byzantine Agreement which was idealized in 2015 by Professor David Mazieres of Stanford. It utilizes a way for the nodes in a network to reach an agreement and can be used for the blockchain. The main features of the FBA are:

–          Decentralized control

–          Low latency

–          Flexible trust

–          Asymptotic security

The Stellar Network uses the SCP in order to reach consensus in its platform but unlike other common consensus protocols, SCP doesn’t define a system with incentives for nods and it also doesn’t provide a system for coin emission which is useful in some cases of cryptocurrencies and public blockchains. Stellar’s Network emission of Lumens is independent of the consensus protocol.

So yes, the short answer to the question can lumens be mined, would be a solid no.