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Stellar — Everything You Ought To Know!

For today’s post, I did a comprehensive review of Stellar.

Stellar is an open-source, distributed, and public-owned blockchain network that enables asset transfers at a low cost.

This network enables everyday people to send money anywhere affordably and quickly.

Its goal is to harness the power of the modern digital economy and foster an unhindered flow of value around the globe.

As you are reading this post, a legion of developers, enterprises, and users already share this vision.

Who knows? By the time you are done reading, you may be compelled to join in.

There is only one way to find out.

Let’s get to business!

Stellar Review Summary

This post is divided into sections with the following subheadings:

  1. Stellar Overview
  2. How The Stellar Network Functions
  3. Lumens (XLM) — The Stellar Network Token
  4. Exchanges Where You Can Buy/Sell Stellar Lumens
  5. Wallets Where You Can Store Your Stellar Lumens
  6. Comparison of Stellar & Ripple
  7. Stellar Partnerships
  8. FAQs
  9. Conclusion

And as you’d guess, a click on any of the subheadings leads you to its details.

Enjoy your read!

1. Stellar Overview

About Stellar

Stellar is a publicly owned network where all the world’s financial systems can work together at once.

It was founded by Jed McCaleb and Joyce Kim in 2014.

The network allows users to create, send, and trade digital currencies/assets.

This means that anybody anywhere in the world can make payments, or transfer assets via the Stellar network.

And it doesn’t matter the distance between the individuals involved or their different currencies. Sounds cool, right?

Like Bitcoin and Ethereum, Stellar uses blockchain to run its network in sync. But it is faster and more energy-efficient.

Stellar’s Purpose

The main purpose of Stellar is to ease the movement of funds and access to new markets.

In trying to achieve this, Stellar does not replace existing financial systems, rather it enhances them. Little wonder why it allows users to trade any kind of money (in a transparent and efficient way).

Stellar cannot achieve its purpose without an indigenous currency. It needs a token that can be used to represent other currencies. That is the only way transfers/payments can be made possible and fast.

Gladly, Stellar does have a token like that. It is called Lumens (XLM). Every account on the Stellar network must own at least 1 Lumen (more on that later).

Following what Stella wishes to achieve, it does not attach any privilege to any currency. It rather makes the traditional form of each currency so that they become more useful and accessible.

This is what I mean:

Say you have the Nigerian naira and you want to do some transactions on the Stellar Network. Stellar helps you create a digital representation of your money. You can call it ‘Naira token’. With that you can now announce to the world that whoever deposits a Nigerian naira with you, will receive one of your new tokens.

And when your buyer returns the “naira token” to you for another transaction, you will be able to redeem it for the regular naira in that deposit account. That way, you have set up a 1:1 relationship between your digital token and a traditional naira.

It then follows that every one of your tokens out in the world is backed by an equivalent deposit. Such that people in possession of the tokens can treat them as traditional money, knowing that they’re exchangeable for traditional money in the end.

The implication?

No matter how a token moves through the economy, the underlying fiat never leaves the bank account where it was deposited. So, someone in Morocco can buy a car using the tokens he loaned from someone in Nigeria.

Also, the bank does not need to settle the purchase or approve the loan. This is how borderless the Stellar network can make money.

Secondly, it also implies that people all over the world can own, buy, and sell the value of a fiat without themselves having a bank account.

Below are a few examples:

1. Someone in Nigeria can hold some of his family’s net worth in naira.

2. An expat in Ghana can send cedis back home, and the recipient can hold them, safely and digitally, until he or she is ready to exchange.

3. A Venezuelan company can pay a Mexican vendor in dollars, who will in turn pay its suppliers within 5s (and not 5days, LOL).

All these are possible because the fiat represented by the digital token never actually move as the value changes hands. Thereby circumventing the friction and expense of the current banking system.

Note: The development of the Stellar technology is guided and supported by the Stellar Development Foundation, a non-profit company based in the U.S.

2. How the Stellar Network Functions

Basically, the Stellar network tracks ownership of assets using a ledger. It has a network of independent computers that checks and rechecks the work of the others.

And though there is no central authority, this network of computers (called nodes) verify and update the ledger every 5 seconds.

This is possible because of the network’s unique algorithm, called the Stellar Consensus Protocol (SCP), which keeps everything in sync.

SCP does for the Stellar Network what proof-of-work does for the Bitcoin blockchain. But then SCP is faster and more energy efficient.

That is why transactions on the Stellar Network are approved in an instant. Unlike what happens in Bitcoin, where a transaction can be delayed for close to 45 minutes before it is approved.

Back to the Stellar ledger/blockchain,

The ledger records two important information for each user:

  • What they own e.g. “100 naira tokens” or “5000 Lumens”
  • What they want to do with what they own e.g. “sell 10 naira tokens for 50 Lumens” or “send 100 dollar tokens to so-so account”

Impressively, these information are broadcast to the entire network and resolved every 5 seconds.

So, when Michael (a Stellar network user) sends someone a euro token on a Stellar-built app, the nodes check that the correct balances were debited and credited.

Also, each node ensures every other node confirms the transaction.

(Note: anyone can install the Stellar software and join the consensus process)

Next, we shall look at the token of the Stellar network.

3. Lumens (XLM) — The Stellar Network Token

Lumens is the native asset of the Stellar network. It uses the ticker symbol XLM.

At the time of the network’s launch, there were 100 billion Lumens available.

Unlike what you would see in other blockchains, Lumens are not mined or awarded by the protocol over time.

Initially, this token inflates annually at a rate of 1%. As of September 2019, there were about 105 billion XLM in existence.

However, this inflation mechanism was ended by a community vote in October 2019.

Then in November 2019, the owners of Stellar decided to burn 55 billion XLM. They felt the need to reduce the number of Lumens they had in store.

Presently, there are 50 billion Lumens in existence. And there are no plans for the creation of more Lumens.

Out of these 50 billion Lumens, 20 billion are in circulation while the Stellar Development Foundation (SDF) maintains ownership of the remaining 30 billion Lumens.

That’s not all. SDF uses these Lumens to expand and promote the Stellar Network.

It achieves this by distributing the Lumens in different buckets.

Have a look:

As far as the Stellar network is concerned, Lumens serve two purposes:

i. Prevention of network spamming

It achieves this by paying for transaction fees.

Also, it ensures that users of the network maintain a minimum balance.

The essence of the minimum balance requirement is to protect the network from being flooded with fake transactions.

Every stellar account must have a minimum balance of 1XLM.

The minimum per-transaction fee is 0.00001XLM.

ii. Sponsorship of multi-currency transactions

Lumens serve as a bridge between various currencies.

It allows trades to occur even in a situation where the direct market is not large enough to sponsor trades.

Moving on, let’s take a look at the exchanges where you can buy XLM.

Keep reading!

4. Exchanges Where You Can Buy/Sell Stellar Lumens

The Stellar network has a built-in exchange where you can buy/sell Lumens. It is called Interstellar.

It features multi-wallet options that are very secure.

Transactions are made very fast and effortless in this exchange.

To enjoy the versatility of this exchange, take these 3 steps:

  1. Create an account.
  2. Upload funds to an anchor on the Stellar network.
  3. Then maximize the near-instant transfers available on the network.

In other words, start making transactions.

Other exchanges where you can buy and sell XLM include:

  • Binance
  • Changelly
  • Coinbase
  • CEX.IO
  • Paybis
  • Kraken
  • HitBTC


Binance is a Cryptocurrency Exchange, founded in 2017 by Changpeng Zhao in China.

The exchange’s headquarters was later moved to Malta, a more crypto-friendly Nation due to the Chinese government regulations on cryptocurrencies.

It provides a platform for users to buy and sell XLM easily and swiftly.

There are different convenient payment methods that you can use to buy XLM.

The exchange also supports other cryptos like BTC, ETH, BNB, XRP, USDT, NGN, etc.

You can read our review on Binance to learn more.

Visit Site


Changelly is a non-custodial exchange that was launched in 2015 by Minergate (a crypto mining pool).

Users of this exchange do not keep their funds in it.

They are rather connected to another exchange offering the best rate in the market through an automated trading bot.

This exchange provides an easy-to-use interface where you can buy XLM and 99 other cryptos.

Find out more about the Changelly exchange here.

Visit Site


Coinbase is a cryptocurrency wallet and platform where merchants and consumers can transact with cryptocurrencies.

Brian Armstrong and Fred Ehrsam founded Coinbase in 2012 as part of the Ycombinator. It is fully licensed and regulated.

Customers can buy, sell, convert, send, receive, or store XLM at and in the Coinbase Android and iOS apps.

Read our Coinbase review to learn more.

Visit Site


CEX.IO was founded by Oleksandr Lutskevych, Dmytro Kalynovskyi, Victoria Polyakova, and Peter Ivanov in London.

The platform used to be strictly a Bitcoin exchange but now offers support for multiple currencies including XLM.

It is a broker and trading platform type of exchange.

CEX.IO provides an easy-to-use platform for customers to buy and sell Stellar Lumens.

At the time of this writing, the daily change for the pricing of XLM on the platform is $0.00108.

Get more info by reading our CEX.IO review.

Visit Site


Paybis is digital and cryptocurrency exchange that was launched in 2014 in Latvia.

It has its offices across Europe and in the USA and has served over 200,000 customers.

In addition to XLM, the exchange also supports BTC, ETH, LTC, XRP, BCH, NEO.

The services offered in this exchange include Payblis Credit/Debit Card Exchange, Bitcoin Exchange, E-currency Exchange, and Bank Transfer.

Learn more about Paybis here.

Visit Site


Kraken is one of the largest cryptocurrency exchanges in the world both in total volume and liquidity.

It was founded in 2011 by Jesse Powell.

The platform is very user-friendly. It is one of the best exchanges to trade XLM.

Here, you can make deposits via bank wire, SEPA, ACH and SWIFT.

Kraken also supports other cryptos like BTC, XRP, BCH, LTC, etc.

Visit Site


Hit Solutions LTD founded HitBTC in Hong Kong in late 2013.

Then, angel investors raised $6M to set up the exchange.

It offers a variety of services including OTC Trading, Token listing, Margin trading, and API.

The platform allows users to buy XLM using other cryptocurrencies.

No fiat currency is supported on this platform for now.

Visit Site

Still here? Good!

In the next section, you will find where you can store your Lumens.

Read on!

5. Wallets Where You Can Store Your Stellar Lumens

Ledger Nano S

This is the most secure wallet to store your Lumens. It is a hardware wallet that supports the storage of Lumens.

The Ledger Nano S also supports a wide range of crypto currencies.

Additionally, this wallet makes backup and recovery very simple. And it has a strong development team and customer support.

You can read our review on Ledger Nano S for more info.

Trezor T

This is another hardware wallet where you can store your Lumens. It also enables you to that store your private keys offline.

It has a unique colored touchscreen and has no buttons. The wallet supports over 1000 cryptocurrencies including Ripple and Monero.

Read our review on Trezor T to learn more.

Ledger Nano X

Yet another hardware wallet where you can store your Lumens.

It was introduced by Ledger as a major improvement to the existing Nano S.

Unlike its predecessor, it has a Bluetooth connection that allows pairing with its smartphones App (Ledger Live Mobile).

Also, it supports over 1000 cryptocurrencies and has an inbuilt rechargeable battery.

Get more info on this wallet here.


Foxlet is a desktop wallet that supports only the storage of lumens.

You get to encrypt your XLM secret key yourself and store it on your personal computer.

Here, you do not need to register and you can sign transactions offline.

This wallet is very simple to use.

Atomic Wallet

This is another desktop wallet where you can store your Lumens. Unlike the Foxlet wallet, it can store 300 different types of tokens.

Also, this wallet enables atomic swaps and exchanges using Changelly and Shapeshift. Hence, the user can make an exchange at a relatively low cost.

Atomic XLM Desktop Wallet is easy to use, and you are always in control of your keys.


This is a Stellar wallet that has a decentralized exchange. As such, users can exchange different coins without the need for a centralized entity.

It also means that you can swap two different crypto pairs even if there is no existing market for it.

Gladly, Interstellar wallet exists across all operating systems (Mac, Linux, Android, iOS, web).

This wallet enjoys strong support from the Stellar community.

It is updated every 3 months. This means that it uses the latest security features.


Stargazer is both a desktop and a mobile wallet with great user interface..

You can get the desktop version from the Stargazer GitHub in Windows, Mac OS X, and Linux.

For the mobile wallet, it is only compatible with Android and you can download it from the Google Play Store.

On Stargazer, you can send/receive XLM, set up multiple accounts and assets, and apply multi-sig security.


We have here a mobile XLM wallet that is available for both Android and iOS devices. It is attractive and easy to use.

It also features a built-in XLM price converter, 2-factor authenticator, fingerprint support, and secure PIN protection.

Also, you cannot store other tokens apart from Lumens in this wallet.

However, it is not very secure as you lose your Lumens when you lose your mobile device.

You can download Lobstr Wallet from iStore and the Google Play Store.

6. Comparison of Stellar and Ripple

Most people tend to assume that Stellar is a fork of the Ripple blockchain because they have a lot of similarities but they are wrong.

In this section, you will find out the key differences between Stellar and Ripple. But first, a brief overview of Ripple:

Ripple (XRP) is the digital currency of the RippleNet network. It was created by RippleLabs in 2012.

Different banks around the world connect with Ripple (XRP) for fast international/cross-border transactions.

The goal is to remove middlemen that increase the cost of transactions and duration.

Now, their differences…

You see…. They are both very different!

7. Stellar Partnerships

Here, I provided a list of companies that are in partnership with Stellar:

  1. IBM
  2. SatoshiPay
  3. Saldo
  4. Zagg
  5. Elliptic
  6. Tangem
  7. Curv
  9. Nodle
  10. Blockcard by Ternio
  11. VEZT
  12. Firefly
  13. Cowrie
  14. Ripple Fox
  15. Papaya
  16. Tempo
  17. SIMBA
  18. Anchorage
  19. Wirex
  20. The White Company, and many others

8. FAQs

Is Stellar a good investment?

Stellar is one of the few tokens with the potential to yield profits.
XLM ranks number 14 with a market cap of >$2 billion (Details as seen CMC as of July 2020).
I will say it is a good investment as the project has a convincing development and business strategy.
And as we saw earlier in the post, Stellar has already formed some firm partnerships and is making progress with its applications.

How does Stellar make money?

Since the transaction fees on the network are minimal, it is not wrong to wonder how the network makes a profit for itself.
Well, the operations on the network are funded by the 30 billion Lumens in the custody of the SDF.
There is also the free contributions from external companies or individuals.

Why would banks and businesses use Stellar?

The reason for this is quite obvious.
Stella makes the cross-border transfer of funds very easy and quick for banks and businesses.
And this is possible because Stellar has a decentralized exchange built into an effective protocol.
Also, Lumens do not only serve as a universal currency translator but also protects the network from spam.

Is Stellar Lumens mined?

Stellar Lumens are not mined.
Stellar relies on re-established nodes that confirm transactions via a voting system.

9. Conclusion

And now we have come to the end of our discussion on Stellar.

Would you invest in Stellar Lumens?

Perhaps, you are already a user of the Stellar network, what has been your experience?

Do you see more exchanges supporting XLM?

How about the Stellar blockchain? Do you think it is doing better than other crypto blockchains?

Let’s hear your thoughts in the comments section right now.

Also, feel free to ask any questions you may have.

Before you leave, please share this review with your friends by hitting the social media buttons below.

Thank you!



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