What are anchors and how do they work in relation to stellar ?
Anchors are entities that people trust to hold their deposits and issue credits into the Stellar network.
They act as a bridge between different currencies and the Stellar network. Anchors can be banks, money service businesses, currency exchanges, or other financial institutions. When a user wants to send money on the Stellar network, they must first convert their funds into a credit issued by an anchor.
This credit is then sent to the recipient’s wallet on the Stellar network. The recipient can then redeem this credit for funds from the same anchor or another anchor that supports the same currency. Anchors also provide liquidity to the Stellar network by allowing users to exchange different currencies with each other without having to go through a third-party exchange.
This helps keep transaction costs low and allows users to quickly and easily transfer funds across borders without having to worry about exchange rates or fees. In addition, anchors help secure the Stellar network by providing an additional layer of trust between users and the network itself. By requiring users to deposit funds with an anchor before sending them on the network, anchors help ensure that all transactions are legitimate and secure.
