Stellar is a decentralized, open-source blockchain protocol designed for fast, low-cost cross-border payments. Its native token, Lumens (XLM), facilitates multi-currency transactions, making it a standout in the cryptocurrency space. This guide covers Stellar’s technology, pros and cons, purchasing methods, and FAQs.
How Stellar Works: A Multi-Currency Payment Network
Stellar operates as a global payment system with these key features:
– Decentralized Exchange (DEX): Built-in order books enable seamless asset swaps without intermediaries.
– Stellar Consensus Protocol (SCP): Ensures fast (under 5 seconds) and secure transactions.
– Low Fees: Transactions cost a fraction of a cent (0.00001 XLM), ideal for micropayments.
– Multi-Currency Support: Users can send/receive assets like USD, EUR, or cryptocurrencies via anchored tokens.
👉 Discover how to buy XLM securely
Pros and Cons of Stellar Lumens (XLM)
Pros
- Speed: Processes 1,000 transactions per second.
- Low Cost: Near-zero fees compared to traditional banking.
- Decentralization: Managed by the non-profit Stellar Development Foundation.
- Smart Contracts: Supports simplified escrow and crowdfunding.
Cons
- Trust Requirements: Relies on third-party stablecoin issuers (e.g., Tether).
- Minimum Balance: Users must hold 1 XLM per wallet and 0.5 XLM per additional asset.
Where to Buy Stellar (XLM) in 2025
Top exchanges for purchasing XLM:
| Exchange | Funding Methods | Supported Cryptos |
|---|---|---|
| Coinbase | Debit/Card, PayPal, ACH | 100+ |
| Binance | Bank Transfer, Credit Card | 350+ |
| Kraken | Wire Transfer, Cryptocurrency | 200+ |
👉 Compare exchange rates for XLM
Stellar’s Technology and History
Key Metrics
- Max Supply: 100 billion XLM (55 billion burned in 2019).
- Circulating Supply: 40% (as of 2025).
- Developer Engagement: FCAS score >900 (top-tier ecosystem).
Founding Story
Co-founded in 2014 by Jed McCaleb (ex-Ripple) and Joyce Kim, Stellar prioritized financial inclusion. Unlike Ripple, it’s fully decentralized and focuses on individual users.
Frequently Asked Questions (FAQs)
1. What is a Stellar Lumen (XLM)?
- XLM is Stellar’s native token used for transaction fees and maintaining wallet balances.
2. Can I mine XLM?
- No. All XLM was pre-mined, with a 1% annual inflation rate distributed via community voting.
3. Is Stellar faster than Bitcoin?
- Yes. Stellar handles 1,000 TPS vs. Bitcoin’s 7 TPS.
4. How does Stellar differ from Ripple?
- Stellar is decentralized and targets individuals; Ripple serves banks.
5. Are there free XLM rewards?
- Some platforms (e.g., Coinbase) offer XLM for completing educational quizzes.
6. Does IBM own Stellar?
- No. IBM uses Stellar’s network for its World Wire payment system but doesn’t control the protocol.
Final Thoughts
Stellar’s speed, affordability, and decentralization make it a compelling choice for cross-border payments. Whether you’re a developer or investor, XLM offers unique advantages in the crypto ecosystem.