How To Buy Stellar (XLM)?
A common question you often see on social media from crypto beginners is “Where can I buy Stellar?” Well, you’ll be happy to hear it is actually quite a simple and straightforward process. Thanks to its massive popularity, you can now buy Stellar on most cryptocurrency exchanges, including Coinbase and Binance in 3 simple steps.
Step 1: Create an account on an exchange that supports Stellar (XLM)
First, you will need to open an account on a cryptocurrency exchange that supports Stellar (XLM).
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In order to sign up, you will need to enter some basic information, such as your email address, password, full name and, in some cases, you might also be asked for a phone number or address.
Note: On specific exchanges, you might need to complete a Know Your Customer (KYC) procedure in order to be able to purchase cryptocurrency. This is most commonly the case with licensed and regulated exchanges.
Step 2: Deposit funds into your account
Many cryptocurrency exchanges will allow you to purchase Stellar (XLM) with fiat currencies, such as EUR, USD, AUD and others. Furthermore, they will also provide you with multiple deposit methods through which you can fund your fiat account, such as credit and debit cards, ewallets or direct bank transfers.
Note: Some payment methods will have higher fees than others, such as credit card payments. Before funding your fiat account on your chosen exchange, make sure to do your due diligence to find out the fees involved with each payment method to avoid unnecessary costs.
Step 3: Buy Stellar (XLM)
This process is similar across almost every cryptocurrency exchange. All you have to do is find a navigation bar or a search bar, and search for Stellar (XLM) or Stellar (XLM) trading pairs. Look for the section that will allow you to buy Stellar (XLM), and enter the amount of the cryptocurrency that you want to spend for Stellar (XLM) or the amount of fiat currency that you want to spend towards buying Stellar (XLM). The exchange will then calculate the equivalent amount of Stellar (XLM) based on the current market rate.
Note: Make sure to always double-check your transaction details, such as the amount of Stellar (XLM) you will be buying as well as the total cost of the purchase before you end up confirming the transaction. Furthermore, many cryptocurrency exchanges will offer you their own proprietary software wallet where you will be storing your cryptocurrencies; however, you can create your own individual software wallet, or purchase a hardware wallet for the highest level of protection.
For more in-depth instructions, our ‘Absolute Beginner’s Guide To Cryptocurrency Investing‘ will take you through the process step-by step. In addition to providing instructions for sending and receiving your cryptocurrency.
And if you’re completely new to crypto our beginner, intermediate and advanced level articles will get you up to speed with everything you need to know about the cryptocurrency space starting out.
What is Stellar (XLM)?
Stellar is an open-source network for currencies and payments. Stellar makes it possible to create, send and trade digital representations of all forms of money—dollars, pesos, bitcoin, pretty much anything. It’s designed so all the world’s financial systems can work together on a single network.
Stellar has no owner; if anything it’s owned by the public. The software runs across a decentralized, open network and handles millions of transactions each day. Like Bitcoin and Ethereum, Stellar relies on blockchain to keep the network in sync, but the end-user experience is more like cash—Stellar is much faster, cheaper, and more energy-efficient than typical blockchain-based systems.
The Stellar network launched in 2014. Since then it’s processed more than 450 million operations made by over 4 million individual accounts. Large enterprise companies and companies as small as single-dev startups have chosen Stellar to move money and access new markets.
From the beginning, Stellar has been cryptocurrency-adjacent, but the software has always been intended to enhance rather than undermine or replace the existing financial system. Whereas, say, the Bitcoin network was made for trading only bitcoins, Stellar is a decentralized system that’s great for trading any kind of money in a transparent and efficient way.
The Stellar network has a native digital currency, the lumen, that’s required in small amounts for initializing accounts and making transactions (you can read more about that here) but, beyond those requirements, Stellar doesn’t privilege any particular currency. It’s specifically designed to make traditional forms of money—the money people have been spending and saving for centuries—more useful and accessible.
For example, here’s what you can do with Stellar. You can create a digital representation of a U.S. dollar—on Stellar you’d call this a “dollar token”—and you can tell the world that whenever someone deposits a traditional dollar with you, you’ll issue them one of your new tokens. When someone brings that “dollar token” back to you, you promise to redeem it in turn for one of the regular dollars in that deposit account. Essentially, you set up a 1:1 relationship between your digital token and a traditional dollar. Every one of your tokens out in the world is backed by an equivalent deposit. So while people hold the tokens, they can treat them just like traditional money, because they know that they’re exchangeable for traditional money in the end.
This might seem unexceptional—issuing electronic credits for dollars is basically what any local American bank does thousands of times a day. But in a global system this 1:1 promise of a token for a currency has important implications. For instance, no matter how a token moves through the economy, the underlying dollars never leave that bank account in the United States. So suppose someone loans their tokens to someone else, who then uses them to buy a car. No bank has to settle the purchase or approve the loan. And furthermore, it doesn’t matter if the seller of the car lives in Mexico or Singapore or anywhere, they can still own the tokens and can trade them however they please. The Stellar network makes money borderless.
Digital dollar tokens also mean people all over the world can own, buy, and sell the value of a dollar without themselves having a U.S. bank account. A Venezuelan can hold some of his family’s net worth in dollars. A Filipino expat can send dollars back home, and the recipient can hold them, safely and digitally, until she’s ready to exchange. An American company can pay a Mexican vendor in dollars, and the vendor can pay its suppliers in turn, with a five-second, rather than a five-day, wait to settle. Because the dollars represented by the digital token never actually move as the value changes hands, these transactions sidestep the friction and expense of the current banking system.
This exact dollar token example is in fact live on Stellar right now, implemented by a company called AnchorUSD—thousands of dollars of value moves quickly and cheaply through their USDx token each day. Of course, Stellar works for any currency, not just dollars. And when you add peso tokens, naira tokens, yuan tokens, pound tokens, bitcoin tokens, euro tokens and everything else, you have a truly unified monetary system that keeps the best parts of what exists today.
Who builds on Stellar?
For end-users, Stellar is a fast, efficient network for trading, saving, and spending digital money. For builders, it’s open financial infrastructure. Anyone can access it; there’s no permission or application needed. That basket of currency tokens we just mentioned, those are on the network, ready to use. We have euros, bitcoins, dollars, Mexican pesos, Argentinian pesos, Brazilian reais, and Nigerian naira. Their respective issuers handle deposit, redemption, and compliance, so builders can focus on end-user experience. This same openness also applies to the token layer: a financial institution can issue new digital tokens to fill a market need, say, for the Swiss Franc, without joining a proprietary “association” or dealing with a gatekeeper. The total power of Stellar grows with each new company and developer. See their SDKs and documentation to get started with your own wallet, app, or token.
The ongoing development of the basic Stellar technology is guided and supported by the Stellar Development Foundation, a non-profit company based in the U.S. The Foundation helps maintain Stellar’s codebase, supports the engineering and business communities around Stellar, and is a speaking partner to regulators and institutions. The Foundation has no shareholders, so it can be purely dedicated to the success of Stellar as a neutral, equitable, and public network.
Transparency is a tenet of the network. Stellar’s code is open-source and available to anyone’s audit or contribution. Many of SDF’s current employees were first inspired to get involved with the technology in their free time or for their own projects.
How does Stellar work?
At the lowest level, Stellar is a system for tracking ownership. Like accountants have for centuries, it uses a ledger to do so, but Stellar’s innovation is that there is no actual accountant. Instead there’s a network of independent computers each checking and rechecking the work of the others. Stellar is a system without a central authority—meaning no one can stop the network or secretly adjust the numbers to his liking—yet even without a central authority the ledgers are verified and updated, every five seconds.
A unique algorithm, called the Stellar Consensus Protocol (SCP), keeps everything in sync. There are many ways to get agreement across a decentralized system—Bitcoin’s visionary proof-of-work method was the first and is still the most famous. But, like many first drafts, proof-of-work left room for improvement. SCP strives to be better by being configurable, fast, and highly energy efficient. If you’re interested in the deep details, you can read the peer-reviewed paper, published by SOSP, the oldest and most prestigious systems conference, for complete technical details.
For every account holder, Stellar’s ledger stores two important things: what they own (account balances, like “100 pesos tokens” or “5000 lumens”) and what they want to do with what they own (operations, like “sell 10 dollar tokens for 50 lumens” or “send 100 peso tokens to such-and-such account”.) Every five seconds, all the balances and all the operations are broadcast to the entire network and resolved.
The computers that run the core Stellar software and therefore publish and check the ledger are called nodes. So, when you send someone a euro token on a Stellar-built app, the nodes check that the correct balances were debited and credited, and each node makes sure every other node sees and agrees to the transaction. The current Stellar network is verified by hundreds of nodes across the globe; the nodes and how they communicate is public information, and anyone can install the Stellar software and join the consensus process. This is different than how accounting works at, say, a bank, where a single corporation unilaterally decides what happens, more or less in secret.
Right above this core layer sits a powerful API so that to build on Stellar you don’t have to understand the particulars of distributed consensus. Simple, well-documented functions allow you to move new digital money using models that you’re used to. It’s very easy to trade tokens between accounts, make markets, and issue assets.
What are Lumens?
A lumen is a digital currency unit, such as bitcoin for the Bitcoin network. The Lumens are the Stellar network’s primary and native asset. They are linked to the network. Logically, Lumens cannot be held in one’s hand because they are a digital asset, but they are critical to the Stellar network’s operation because they contribute to the ability to send money around the world quickly and securely.
When Stellar first launched, their tokens were not called Lumen. They were given the same name as the network. After a year, in 2015, the network was improved and the name was changed to Lumen to distinguish itself from the network and avoid confusion with the foundation’s name.
Why does the Stellar network need Lumens?
Lumens are used as an anti-spam tool. Specifically, Lumens are required to make a transaction and avoid accounts with empty balances. The network is thus protected, preventing malicious actors from flooding it with DoS attacks. All accounts, on the other hand, require a minimum balance of 0.5 Lumens. Users are pushed in this way to keep the blockchain clean by removing abandoned accounts. As a result, all of the accounts in this network profit economically.
What makes Stellar (XLM) unique?
Plenty of digital currencies offer cheap, lightning-fast transactions. However, Stellar has the advantage of working with any type of money. Stellar can be used to send a digital representation of the US dollar, the euro, Bitcoin (BTC), or any other currency on the planet.
Although many cryptocurrencies are designed to replace existing financial systems, Stellar is not one of them. It is intended to improve the world’s financial systems by providing a single network on which they can all collaborate.
Individuals can use Stellar in a variety of ways. Stellar apps and third-party services acting as network anchors make it simple for users to transfer funds to others, regardless of where they live. You can also use it to buy digital versions of various currencies, which is a useful option for people who live in countries without a strong national currency and want to save in another currency.
As an open-source network, the Stellar infrastructure is available for use and development by anyone. It can be used by businesses to create their own blockchain wallet, app, or crypto token. They can also use Stellar’s network to make payments and convert digital currencies to cash, as well as vice versa. Furthermore, the Stellar Development Foundation has recently supported the use of Stellar for a broader range of applications, such as NFT minting and smart contracts.
Stellar (XLM) Partnerships
The Stellar ecosystem includes a large number of projects and partnerships. IBM and MoneyGram International are two of the most recognizable partnerships.
In 2019, IBM chose the Stellar network to power its World Wire global payments system. World Wire improves the cross-border payment process by utilizing digital currencies. It enables transactions to be processed at a fraction of the cost and time required by traditional banking.
MoneyGram announced a partnership with the Stellar Development Foundation in 2021. The collaboration combined MoneyGram’s network with Stellar, allowing customers to convert USD Coin to cash and vice versa. USD Coin is a stablecoin that is pegged to the US dollar.
Stellar also has several grant programs through which it funds projects. The Stellar Community Fund (SCF) allows the Stellar community to vote on which projects should be funded. Any project that wishes to apply is welcome to do so. Here are some SCF award winners:
- Blocknify is a document-signing service notarized by the Stellar network.
- Free Voting Platform is a voting service that uses the Stellar network to verify elections.
- Litemint is a gaming platform and NFT marketplace.
- SendIt is a wallet that people can use to send and receive payments by email.
Stellar Development Updates in 2023
Stellar, known for its focus on facilitating cross-border payments, has introduced several significant developments in 2023:
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Soroban Smart Contracts: One of the most notable advancements is the introduction of Soroban, Stellar’s native smart-contract platform. This development is a strategic move to compete with established smart-contract blockchains like Ethereum. Soroban is designed to offer cost-efficient smart contracts with a transparent and fair fee model. The Stellar Development Foundation (SDF) has allocated a $100 million fund to support developers building tools and products for the Soroban ecosystem.
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Enhanced Network Performance: The SDF released its Q1 2023 report, highlighting significant growth in the network’s performance. A key indicator of this growth is the increase in total operations processed on the network. Stellar has also initiated its most substantial protocol upgrade to date, focusing on improving network performance and stability.
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Strategic Focus on Network Utility: Stellar’s 2023 roadmap emphasizes utility as the growth exponent. The roadmap is structured around three building blocks: making innovation easy and scalable, winning over builders, and focusing on utility to build trust. The aim is to attract more builders to the network, which in turn would lead to exponential growth.
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Teased Major Stellar Innovation: There’s an anticipation of a significant innovation or partnership that could considerably impact Stellar’s network. While specific details are yet to be disclosed, this suggests Stellar’s commitment to continuous development and improvement.
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Stellar Development Foundation’s Continued Commitment: Throughout 2023, the Stellar Development Foundation has made significant strides in its strategic roadmap, focusing on furthering its strategy and utility. This includes investments in projects like MoneyGram International and joining the Bytecode Alliance to advance WebAssembly (Wasm) technologies.
These developments collectively mark an important phase in Stellar’s evolution, aiming to enhance its scalability, utility, and competitiveness in the blockchain and cryptocurrency landscape.
Official website: https://www.stellar.org/
Best cryptocurrency wallet for Stellar (XLM)
There are plenty of different crypto wallets available. The best one for you depends on your general trading habits and which provides the most security in your situation. There are two main types of wallets: hot storage wallets (digital) and cold storage or hardware wallets (physical). Both have their pros and cons, and there is not necessarily a right or wrong answer when it comes to figuring out which crypto wallet is best for you.
HOW DO I DECIDE WHICH cryptocurrency WALLET TO USE for Stellar (XLM)?
Deciding which type of wallet to use depends on a variety of factors, including:
- How often you trade. In general, hot wallets are better for more active cryptocurrency traders. Quick login ability means you are only a few clicks and taps away from buying and selling crypto. Cold wallets are better suited for those looking to make less frequent trades.
- What you want to trade. As mentioned earlier, not all wallets support all types of cryptocurrencies. However, some of the best crypto wallets have the power to trade hundreds of different currencies, providing more of a one-size-fits-all experience.
- Your peace of mind. For those worried about hacking, having a physical cold wallet stored in a safe deposit box at the bank or somewhere at home, provides the safest, most secure option. Others might be confident in their ability to keep their hot wallets secure.
- How much it costs. It is important to investigate the costs associated with each wallet. Many hot wallets will be free to set up. Meanwhile, cold wallets, like any piece of hardware, will cost money to purchase.
- What it can do. While the basics of each cryptocurrency wallet are the same, additional features can help set them apart. This is especially true of hot wallets, many of which come with advanced reporting features, insights into the crypto market, the ability to convert cryptocurrencies and more. Security features can also be a good differentiator.
For a more in-depth overview of cryptocurrency wallets visit our “Cryptocurrency Wallets Explained” guide.
If you’re going to be dealing in larger volumes of crypto, investing in cold storage might prove advantageous.
Most widespead examples of this being the Ledger Nano and the Trezor.
Ledger manufactures cold storage wallets designed for users who want increased security. Their wallets are a physical device that connects to your computer. Only when the device is connected can you send your cryptocurrency from it. Ledger offers a variety of products, such as the Ledger Nano S and the Ledger Nano X (a bluetooth connected hardware wallet).
Trezor is a pioneering hardware wallet company. The combination of world-class security with an intuitive interface and compatibility with other desktop wallets, makes it ideal for beginners and experts alike. The company has gained a lot of the Bitcoin community’s respect over the years. Trezor offers two main models – The Trezor One and Trezor Model T (which has a built in touch screen).
Stellar (XLM) Price & Charts
- Market Capitalization And Daily Trading Volume
- Current Market Price Of Every Cryptocurrency Relative To USD (And Some Local Currencies)
- Circulating And Total Supply
- Historical Charts With Prices Relative To USD, Bitcoin (BTC), And Ethereum (ETH).
