Stellar (XLM) is a blockchain-based platform designed to facilitate fast, low-cost cross-border payments and currency exchanges. Co-founded by Jed McCaleb and Joyce Kim in 2014, Stellar aims to provide inclusive financial access, particularly to underbanked regions, using a decentralized, open-source protocol.
Understanding Stellar and Its Purpose
Stellar operates on a decentralized ledger that allows users to send money across borders quickly and affordably. At the heart of this ecosystem is Stellar Lumens (XLM)—the native digital asset used to facilitate transactions, maintain liquidity, and prevent spam on the network.
Unlike traditional financial systems that rely on intermediaries, Stellar enables direct peer-to-peer transfers via anchors—trusted entities that hold users’ funds and issue credits on the network. These anchors act like digital bridges, converting fiat currencies into tokens and back, streamlining the exchange process.
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How Stellar Works: Decentralization and Smart Conversion
Stellar’s decentralized network runs on a consensus algorithm rather than mining, offering transaction speeds of 3–5 seconds. Users can send any currency and have it converted automatically on the Stellar network into the recipient’s preferred currency at optimal exchange rates. This process can involve:
- Direct matching via Stellar’s decentralized order book.
- Conversion through XLM as an intermediary currency.
- Chain conversions if direct currency pairs are unavailable.
This flexibility allows seamless multi-currency transactions without the bottlenecks of conventional banking systems.
Key Features of the Stellar Blockchain
Stellar brings together several features that make it an efficient solution for international finance:
- Decentralized and Transparent: Operates on open-source code and distributed servers.
- Fast and Scalable: Supports thousands of transactions per second.
- Built-in Decentralized Exchange: Allows users to trade fiat and crypto assets directly on the ledger.
- Low Fees: Costs just fractions of a cent per transaction.
- Fixed Inflation Rate: A 1% annual inflation mechanism helps maintain network health.
Buying and Storing Stellar Lumens (XLM)
To buy XLM, users can register on major exchanges like Binance, Coinbase, or Bittrex, complete KYC verification, and fund their account via fiat or crypto. Once funded, users can exchange for XLM and store it securely.
Storing XLM can be done in Stellar-native wallets like Stronghold and StellarTerm, or via third-party options such as Exodus, Stargazer, and Ledger Nano X for offline security.
Stellar’s Mission to Democratize Finance
Stellar is not just another blockchain project—it’s a mission-driven protocol focused on making financial services universally accessible. By eliminating middlemen and slashing fees, Stellar empowers individuals and institutions to transact globally with ease.