If you are involved in the world of cryptocurrency, the chances are high that you have heard of Stellar.
This open-source blockchain payment system was invented in July of 2014 by a man named Jed McCaleb. It operates using a currency known as Lumen (XLM).
Rather than the traditional mining method, Stellar uses a federated byzantine agreement algorithm to validate its transactions.
In a world full of cryptocurrencies, it can be hard to distinguish Stellar from the rest of the bunch. Keep on reading to learn more about Stellar XLM, what it does, and how you can make the most out of it.
It’s a fast and cheap option in the online space, great for anyone who moves fast and wants something that will shift with them.
How Does Stellar Work?
You know about the history of Stellar, but it is also vital to understand how the Stellar blockchain works. It can be confusing to look at from the perspective of an outsider. We’ll go over how this space works so that you are familiar enough to use it yourself if the time comes to do so.
Stellar works by:
- Using Stellar blockchain to keep everything on the network in sync
- Using a decentralized system to trade any kind of money in an efficient manner
- Utilizing a digital currency to reduce the need for banks on the platform
- Trading tokens for real currency
Stellar operates by putting everybody on the same playing field. Digital dollar tokens permit users to have access to U.S. funds without having a bank account themselves.
Using Stellar means that you have access to a wide variety of people. It’s not just limited to crypto. Rather, Stellar works with cryptocurrency to allow a unique trading platform most have never experienced before.
What is XLM?
As we mentioned above, XLM is the native currency for Stellar. It is also known as Lumen.
Whether you see XLM or Lumen, you can be sure that you are dealing with Stellar. These items are used to trade on the site, and they come in a limited quantity.
There is a maximum supply of 50 billion, with about 22.5 billion currently in circulation.
Lumens are excellent because:
- They stand-in for cash during trades
- They negate the need for a bank when moving currency around online
- They allow quick and easy transactions
XLM is required to use the Stellar platform, so you need to obtain them to make use of this unique space.
Lumens are currently worth less than a dollar each. That is not to say that their value won’t go up over time. Only time can tell when dealing with anything that resides in the world of online payments.
XLM will likely continue to thrive as more and more people see the benefits that come with investing in this product.
Uses for Stellar Lumens (XLM)
Now that you know a little more about Stellar Lumens, you might wonder what they can be used for. There are many things that you can do with these virtual coins. Though it may not be apparent, there is more value in Lumens than one might think.
You can use Stellar Lumens to:
- Make transactions with the U.S. dollar without owning a U.S. bank account
- Trade and sell with various users on the platform
- Barter between countries without worrying about what form of payment is going to be used
All of these, and more, are things that you can do with Stellar Lumens. It is an exciting and unique platform.
Those eager to make quick transactions with the world will feel very comfortable using Stellar Lumens in this online space.
There are many other uses for Stellar Lumens. As one grows more accustomed to the platform, these uses will reveal themselves to the user. From there, they can expand their horizons in the cryptocurrency-adjacent world.
The Future of Stellar
As with all online currencies, there is a chance that something unfortunate could happen to Stellar. However, on the flip side, it appears as if the future is wide open for this digital token space.
After all, it is on the way up. A single Lumen still costs you less than one dollar to purchase for yourself.
According to Nasdaq.com, the Stellar Lumen has dropped as low as 6 cents and been as high as 77 cents. This might not seem encouraging, but it proves that there is a big potential for reward when dealing with Stellar.
The future is wide open. Now is a great time to hop on the train before the price begins to rise more than it has already.
How to Buy Stellar XLM
Buying currency online is always a little bit intimidating. At this point, you might be wondering how you can buy Stellar and start your journey with this unique form of payment. Buying is easy. You need to understand where to go.
You can buy Steller online by:
- Opening a brokerage account that can help you manage the buying and selling of your coins
- Purchasing a wallet, preferably one of the ones that we are going to recommend
- Buying Stellar on a crypto broker website
Once you have completed these three steps, you should have some Stellar Lumens that you can work with.
The best crypto brokers to buy from including Coinbase, eToro, and iTrustCapital. All of these will provide you with a simple and easy experience when investing in Stellar.
They all have different benefits, so you should look into each one to see which site will best suit your needs. There is an option out there for everybody.
Stellar vs Ethereum
Ethereum is a popular cryptocurrency that many might compare to Stellar. It’s easy to mix these two up if you know nothing about what makes one different from the other. We’ll go over some of the major ones so that you can tell these two major players apart.
Some of the biggest differences between Stellar and Ethereum are that:
- Stellar is much more straightforward than Ethereum, using simple programs rather than complex ones
- Stellar is much faster
- Both have varying exchange and trading systems that appeal to varying types of people
These are just a few of the main differences between Stellar XLM and Ethereum.
Neither of them is truly better than the other, but they are very different experiences. You might want to test each out to see which works best for you. Users may find varying benefits within each platform that they cannot find anywhere else.
Best Crypto Wallets for Stellar
Wallets are great locations to store currency that is located online. You can often find ones that are dedicated to cryptocurrencies, so it makes sense that there are also Stellar XLM wallets.
You can choose one of these to store your currency within. If you do this, you should choose one of the best to keep everything as safe as possible.
Some of the best crypto wallets for Stellar include:
- Ledger Nano S, which can connect with web and desktop apps and uses a private key that is not connected to the internet
- Trezor, which also uses a private key and is a great alternative for Ledger Nano S
- Lobstr, which can operate on the mobile and the web with multi-signature support
- Coinbase, a popular wallet for many types of cryptocurrencies
All of these are great options for storing your Lumens online. They are sure to keep your finances secure and ready for whenever you may need them.
If none of these will work for you, there are plenty of other wallets out there. All you need to do is do a little research so that you can find one that is perfect for your purposes. However, we generally recommend these four for the best possible outcome.
Is Stellar a Good Investment?
With all this talk about Stellar, you might wonder if it’s a good investment. As of right now, Stellar appears to be a good investment. It has the potential to bring you large returns in the future judging by how it has done so far in the real world.
According to trading-education.com, Stellar has returned 424.4% year-to-date. This is incredible, even if you know nothing about this site.
Some other reasons that Stellar is a great investment is:
- They have major upgrades which are improving the flexibility of the system
- You can invest at a low price and watch it rise as time goes on
- It is very likely that it will inflate in the market as time goes on
All of these, and more, are great reasons why Stellar is a good investment. There are many others that we did not mention.
As with all investments in digital currencies and assets, do your research and only invest the funds you can afford to lose.
This article is really great and helpful for beginners. It ensures level playing fields for all traders. I Would like to thank the author for representing this point of view that can be used for beginners.