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Stellar is a multi-currency backend payment network that runs on tokens known as Lumens (XLM). Stellar itself is a blockchain protocol, and Lumens are the token used to process transactions on the blockchain. It’s been gaining traction in the cryptocurrency community thanks to its excellent transaction speed and low fees. Stellar Lumens transaction fees are so low that it has tremendous potential for micropayments. Read on to learn where you can buy Stellar (Lumens).

Pros & Cons of Stellar


  • Fast transaction speeds

  • Multi-currency support

  • Extremely low transaction fees


  • Must trust stablecoin issuers (i.e. TetherUSD or AnchorUSD)

  • Minimum Lumen balance required for each asset you hold

Best Exchange for Buying Stellar

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Funding Methods Debit & Credit Bank, PayPal, ACH, Bank Transfer, e-Transfer
Cryptocurrencies 100+
Countries 100+

General Overview

The Stellar Network is a decentralized, open-source, peer-to-peer network, and run by a not-for-profit organization called the Stellar Development Foundation.

The Stellar Network allows for a global payment system with faster transaction speeds than banks and with lower fees. Anyone using the network can send and receive any currency regardless of their physical location. This is achievable through Stellar tethering a token to a traditional asset like USD, Yen, or the Euro. Transactions on the Stellar network take under five seconds and the average cost of each transaction is a fraction of a Lumen, which equates to a millionth of a cent. The low transaction cost opens use case potentials such as micropayments.

Stellar Ratings


Max Supply: 100,000,000,000 XLM

Network Speed

Rating: High
Transactions Per Second: 1,000


Rating: Medium
Reason: Recently the Stellar Foundation burned 55 billion of its tokens, significantly reducing the supply of tokens available. Aside from this, only 40% of the supply is currently in circulation, leaving lots of time for the ecosystem to evolve.

Developer Engagement

Rating: High
Reason: Stellar has a development FCAS score above 900, meaning they have one of the best, and engaged developer communities in crypto. Their tools are easy to use, and support many languages for developing applications.


Rating: High
Reason: Stellar is a top 20 coin, its liquidity lays with Bitcoin and Ethereum. It is uncommon to find many trading pairs with XLM. Stellar does have a built-in exchange, allowing for cheap, and efficient liquidity with the assets on the network.

Ledger Nano X

Best hardware wallet for storing XLM

History of Stellar

Stellar was founded in 2014 by Jed McCaleb and Joyce Kim. In 2011 McCaleb founded another well-known cryptocurrency looking to takeover backend payment processing: Ripple. A difference of visions caused him to leave the project in 2014 and he founded Stellar with Joyce Kim. At the time there was a misconception that this was a fork, however Stellar is a totally separate project from Ripple.

McCaleb and Kim started the non-profit Stellar Development Foundation in conjunction with Stripe’s CEO Patrick Collison, and Stellar officially launched in July 2014. By early 2015 there were already 3 million users. In November 2015 Stellar upgraded its network protocol to the Stellar Consensus Protocol (SCP) and still runs on it. More detailed information about Stellar Consensus Protocol can be found here.

How Does Stellar Work?

Stellar works as a forex, stock exchange, and a crypto exchange bundled into one system. Unlike most blockchains that solely store your balance, the Stellar network also has the ability to facilitate trades without putting your money on an exchange. This is known as a Decentralized Exchange. This built-in order book helps trades automatically resolve and makes the network highly liquid. Stellar is run on a network of peers, no individual or entity can stop or alter any of the transactions on the network, meaning true decentralization.

When someone wants to send their Euros to a relative and have them receive USD, they simply enter the how many Euros they wish to send, and within seconds their recipient has USD in their wallet. The cost for the transaction is a fraction of a cent. The network itself takes the order the person made and looks at the order books for the best sequence of transactions to convert the sender’s Euros into USD. This can be a direct currency conversion, or if a better price is available indirectly, like by converting to Lumens and then USD, the network will use that path instead; the network always picks the best path for you.

Where to Buy Stellar Lumens

If you want to get involved with Stellar you’re most likely going to have to purchase it on a cryptocurrency exchange. Fortunately Stellar is listed by a number of reputable exchanges including the following:

The Advantages

The advantages to using Stellar are that is has fast transaction speeds, supports multiple currencies on its network, and has extremely low transaction costs. Most transactions on the Stellar Network take under five seconds to complete and with multiple currencies and cryptocurrencies available it gives users many options. More significant than speedy transactions across a variety of assets is the costs for these transactions.

The average cost for making a transaction on the Stellar Network equates to a millionth of a USD cent, a stark difference when compared to traditional currency transfers through banks and even other crypto apps and networks. In addition, the Stellar Network is truly decentralized, run by peers on the network and not owned by anyone, just supported by its non-profit organization.

The Disadvantages

The disadvantages to using Stellar are minimal. The main disadvantage is related to trust, as Stellar uses stablecoin pairings to facilitate its traditional currency support for assets like the USD. The USD you hold in your Stellar wallet is in fact a stablecoin such as TetherUSD or AnchorUSD, meaning you must trust the issuer of the stablecoin to actually hold an equivalent reserve ratio of USD to token. If it turns out that they do not you won’t be able to redeem your stablecoins for an equivalent dollar amount.

The other disadvantage is that you must hold a minimum balance of Lumens in your account in addition to some more for each asset you hold in order to use the network or hold assets on it, though the amount is minimal. While some see this as a disadvantage, it is used as a mechanism to prevent spam on the network by stopping fake accounts from being created and meaningless transactions from clogging it up. Accounts that do not hold Lumens cannot use the network.

Stellar Frequently Asked Questions

A Stellar Lumen, also known as XLM on exchanges, is the protocol token used by the Stellar Network. Anyone that wishes to use the Stellar Network, whether to hold or send assets, must hold Lumens in their account. Lumens are also used to pay for transactions on the Stellar Network.

No, it is not possible to mine Stellar. When Stellar was released all 100 billion tokens were created, though not all were put into circulation. To account for inflation related to economic growth or lost Lumens, there is a fixed 1% annual rate of new Stellar distribution, and this distribution is voted upon by users.

No, Stellar did not come from Bitcoin. It not only did not come from Bitcoin, but it uses a completely separate blockchain and a different consensus protocol.

Yes! Stellar transactions are extremely cheap, averaging around a millionth of a USD cent, and are typically completed in 5 seconds or less. It’s one of the main selling points of the network.

Stellar is related to Ripple because they have the same founder, Jed McCaleb, who founded Ripple in 2011 and left in 2014 to form Stellar due to a difference in vision with his counterparts. The projects are completely separate despite misconceptions that Stellar was a fork of Ripple.

Yes! There is currently one verified way to get free Stellar Lumens. This is through Coinbase, you simply sign up and take their lessons about Stellar and receive $10 worth of Stellar. An additional $40 can be earned through referring 4 friends and having them complete the lessons as well ($10 per referral).

There was another way to receive free Lumens, which was directly from the Stellar Development Foundation, who were willing to airdrop 2 billion Lumens into all authenticated Keybase accounts beginning in September 2019. Simply having a verified Keybase account meant the Lumens would be deposited automatically every month. However, it should be noted that this was only available for users registered before the announcement, and the middling success of the program resulted in it only lasting 3 months (initially they expected 20 months), and a distribution of 300 million rather than 2 billion Lumens.

Stellar is faster than Bitcoin. Bitcoin only processes around 7 transactions per second, whereas Stellar can process up to 1000 per second.

Stellar has smart contracts but they are not like Ethereum smart contracts. Ethereum smart contracts can create issues when attempting transactions that Stellar smart contracts are designed for such as escrow contracts and joint entity crowdfunding. They also do not already exist on the blockchain like Ethereum smart contracts, which await users to interact with them and then execute the code they are programmed for. Stellar smart contracts are created separately from the network, then submitted to the network for approval, they do not already exist on the blockchain. Instead of interacting with code on the blockchain as you would be with an Ethereum smart contract, when interacting with Stellar smart contracts you are just agreeing on the conditions of a transaction.

Lumens are not generally good for purchasing items at this time. They hold very little value individually at around 5 cents USD, so to purchase goods with them would require a lot of Lumens which you would likely rather spend on transaction fees and holding assets on the Stellar Network.

No, IMB does not own Stellar, no entity or individual actual owns Stellar as it is an open-source, peer-to-peer network. IBM uses the Stellar Network as a backend for its IBM World Wire which connects financial institutions to Stellar to allow simultaneous clearing and settlement of cross-border payments. It is fast, safe, and cheap, and it is available everyday at anytime.


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