What Are Stellar Lumens And What To Do With Them
Cryptocurrencies have become an everyday subject of discussionAnd while the most popular ones like BitcoinEthereum are often under the spotlight, others are definitely worth mentioning.
One of those cryptocurrencies are the Stellar Lumens (XLM), the native cryptocurrency of the Stellar networkIn this article, we will explore the basics of the Stellar network, the XLM cryptocurrency,what to do with your Lumens once acquired.
Let’s begin.
What Is Stellar?
Stellar is a distributed payment protocol, which focuses on affordable cross-border transactions between different currenciesThe network was built to support the digital representation of any currency.
The goal of Stellar is to facilitate a more streamlined approach to international money transfers such as remittance paymentsAnd unlike Ripple, which focuses on helping large financial institutions, Stellar tries to connect individuals, banks,payment systems worldwide.
Compared to other blockchains, Stellar brings very high transaction speeds paired with negligible transaction feesThe numbers are staggering – transactions take between 2 to 5 secondsfees are fixed to a single 600,000th of a cent per transaction.
What Are Stellar Lumens?
The Stellar Lumen (XLM) is the native token of the Stellar networkwas created to fill a special role in the network.
It serves as spam prevention, as every Stellar account has to deposit some Stellar Lumens on their address for it to become active.
More importantly, Lumens are used to pay the transaction fees on the Stellar NetworkAnd since the usage of Stellar is increasing by the day, so does people’s interest in Lumens.
Can Stellar Lumens Be Mined?
Unlike BitcoinEthereum, Lumens can’t be mined like in other proof-of-work blockchains.
When the network was launched in 2014, 100 billion Lumens were created with a 1% annual inflation rate.
However, in October 2019, the community voted for the end of the inflation mechanismThe overall Lumen supply was reduced to 50 billion with no more Lumens to be created.
Todaythere are approximately 20 billion Lumens on the market, with the remaining 30 being held by the Stellar founders.
So the only way to acquire Stellar Lumens is to buy them on the market.
Where To Buy Stellar Lumens?
When you are handling Stellar Lumens, you should understand that cryptocurrencies are intangibleneed a special wallet to be storedThese cryptocurrency wallets will be your point of access to your XLM, providing a way to storespend them.
So before you purchase your first Stellar Lumens, make sure you have one of the following:
- A mobile wallet – these are smartphone apps that will enable you to access your XLM whenever you wantWe recommend Lobstr.
- A desktop wallet – these software solutions turn your PC into a cryptocurrency vaultFor XLM, we recommend Foxlet.
- A hardware wallet – these USB-like devices are the most secureconvenient solution for storing cryptoThey can hold multiple cryptocurrenciesare practically unhackableWe recommend the Ledger Nano S.
Once you have opened a Stellar wallet, it’s time to purchase some of this popular cryptocurrencyFor this, just head to Paybis.
There, create an account on the websitefollow these simple instructions to acquire your first Stellar Lumens:
- In the right drop-down menu, select XLM as your Payout method.
- Choose your payment method in the left drop-down menu.
- Enter the amount you wish to spendclick on Buy Stellar.
- Next, follow the instructions to complete your ID verificationThis is an automated process that shouldn’t take more than 5 minutes.
- Provide your XLM address and proceed with the payment.
- Once your payment is processed, you should be the happy owner of some Stellar Lumens!
Purchasing Stellar Lumens is as simple as that on Paybis,the transaction shouldn’t take longer than 10 minutes from start to finish.
Another advantage in purchasing from this exchange is that, unlike most mainstream exchanges, Paybis will send your Lumens directly in your Stellar walletThis way you keep control of your funds at all times.
What Can I Do With My Stellar Lumens?
Stellar is quite a popular cryptocurrency, hovering in the top 20 by market capitalization for the last 3 yearsHere are some of its use-cases.
Use XLM On The Stellar Network
The Stellar payment protocol is just shy from amazingIt allows people, banks, companies, virtually anyone to send value through their network, using both crypto or fiat currencies.
The near-negligible fees make it a great vessel for microtransactions, as even a million transfers would not cost you a single dollar.
Furthermore, you can issue your own assets on the network, tokens that represent some value to you or your peersIt could be precious metals, money, game points, whatever your community finds valuable.
There are multiple reasons to try out the Stellar network as a payment protocol,you will need some XLM to do it.
Trade For Profit
You can trade your XLM for other cryptocurrencies on various exchanges like Binance or Coinbase.
If you have some trading skills, use them to sell your XLM at the right time to buy other cryptomake some profitJust remember that trading is difficultyou need some basic knowledge on how exchanges work before you get started.
Hold As An Investment
The ICO craze od 2017 is now far behind usCryptocurrencies seem to have found some firm ground, making XLM an interesting asset to invest in the mid-to-long term.
A good indicator for XLM’s profitability are the past 6 monthsThe coin has gained more than 75% in value since February 2020, which is nothing to frown uponIt’s never too late to join the crypto revolution.
The fact that there’s a finite supply of Lumens will only contribute to the scarcity of the coinits increase in value over time.
Conclusion
The Stellar Network revolutionizes payment protocols by offering extremely fast transactions at close-to-zero feesOn Stellar, you can transfer any currency, just by creating a token for it.
Given the level of expertise of the Stellar team, we can expect its popularity to grow even furtherbecome a stronghold in the cryptocurrency space.
