How the Stellar Network Operates

How do you send EUR to your friend using USD on the Stellar network?
Let’s start by explaining what exactly is the Stellar network and how it works.

The Internet is made up of a network servers containing our data,
websites, and applications.

Like the Internet, Stellar is a network of decentralized servers
in many locations that power a distributed ledger.

This ledger records every transaction in the system for people and companies alike.
A complete copy of the global ledger exists on each Stellar server.

Any entity can run a server. The network becomes more robust with more servers.

The servers communicate with each other to verify transactions and sync the ledger every 2-5 seconds. This mechanism is known as consensus.

The ledger records your money as credit, which is issued by anchors. Anchors act as bridges between a given currency and the Stellar network.
Banks and payment processors are good examples of real-world anchors.

Credit is issued to your online account—which acts like a virtual wallet—in exchange for your deposit. Anchors have to be trusted to hold your money and honor your withdrawals.

Issued credit can be sent and received between people on the network. Stellar has a distributed exchange, so you can send EUR credits to your friend using your USD credit balance. The network will automatically convert it at the lowest rate for you.

Your friend will receive EUR credit,
which she can withdraw using an anchor supporting EUR.