What is Stellar Lumens (XLM)? A complete Beginners Guide

Author : Edith Reads
Last updated : 17/11/2023
Stellar Lumens

Are you curious about Stellar Lumens (XLM), the digital currency that has been gaining attention globally? Since its launch in 2014, XLM has disrupted the traditional financial landscape, offering users unprecedented levels of speed, security, and scalability. This article will provide an in-depth look into Stellar Lumens and its various features.

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If you’ve heard about cryptocurrencies, you may have heard of Stellar (XLM) or Stellar Lumens. This open-source blockchain platform has been gaining traction in the cryptocurrency space. Backed by a non-profit organization dedicated to promoting financial inclusion around the world, Stellar has seen widespread adoption from individuals, businesses, and government entities alike. Let’s take a deeper look into what Stellar is and how it works.

What Is Stellar (XLM)

Stellar is a decentralized payment protocol that employs distributed ledger technology to facilitate financial transactions. Like other blockchain-based cryptocurrencies, it allows robust funds transfers across borders. In other words, Stellar being an open-source platform, makes transactions fast and secure involving minimal cost. Lumens (XLM) is the utility token of the Stellar blockchain.

How Does Stellar (XLM) Work?

The stellar network intends to enhance the efficiency of the existing financial system making it more accessible and transparent. Stellar validates and processes transactions using Federated Byzantine Agreement (FBA) based consensus mechanism, also known as Stellar Consensus Protocol.XLM-coin

Since miners on the network reach an agreement concerning a transaction’s validity within a few seconds, the SCP expedites transactions at cheap rates. Not to mention, instead of needing approval from the entire network, Stellar uses quorum slices to validate and approve a transaction. While each network node selects another set of trustworthy nodes, a transaction gets approved after being approved by all the nodes within this network.

How is Stellar (XLM) Created?

This process begins with reputation nodes referred to as “validators” which verify that transactions on the network are valid before new coins are released. Once these transactions are validated, a predetermined number of XLM tokens are issued in accordance with their use case. These tokens can be used for transfers, payments and trading on cryptocurrency exchanges. Therefore, by understanding how the Stellar Network creates new tokens through its validation process, users can gain insight into the underlying value of this digital currency.

What is the Purpose of Stellar (XLM)?

The main focus of Stellar is to enable people to send money across borders quickly, securely, and at a low cost. To do this, Stellar utilizes its own native cryptocurrency called Lumens (XLM). The Lumens are used as a bridge currency that facilitates transfers between different currencies on the platform.

The stellar network also includes a distributed exchange which allows users to exchange any two assets regardless of their locale or type. For example, users can exchange euros for US dollars or gold for silver without having to go through a third-party exchange like a bank or other financial institution. This decentralized exchange makes the process of exchanging assets much quicker and more efficient than traditional exchanges.

In addition to facilitating cross-border payments and exchanges, Stellar also has other features that make it an attractive option for businesses looking for an easy way to transact globally without being charged large fees from banks or other payment processors. These features include smart contracts, multi-signature accounts, atomic pathfinding (which allows transactions between multiple parties in different currencies), and asset anchors which allow users to issue digital assets on the stellar network. All of these features combined make Stellar an attractive option for businesses looking for a streamlined way to transact globally with minimal costs associated with doing so.

How to Mine Stellar (XLM)

While Stellar (XLM) is not technically “mined” like other cryptocurrencies, it can be acquired through a process called Proof-of-Stake (PoS). In PoS, miners have to stake a certain amount of XLM tokens in order to be eligible to mine new blocks. Once they’ve staked the tokens, miners are then randomly selected to add new blocks to the ledger.

Whenever they successfully add a block, they receive a reward in XLM tokens. To get started with mining Stellar (XLM), you will need to acquire the right hardware and software, such as GPUs for graphic processing or ASICs for application specific integrated circuit computing. Additionally, you will need to select and set up a suitable pool and join an exchange that supports XLM so you can connect your wallet and start trading.

How to Buy Stellar (XLM)

Purchasing Stellar (XLM) is easier than ever! To get started, simply create an account on any popular digital currency exchange. After that’s been completed, research the available prices and fees associated with XLM so you can select the most economical option. Additionally, it’s important to ensure your account has sufficient funds which can be quickly transfered from a bank accounts or cryptocurrency wallets. From there, buying XLM is as easy as selecting the desired amount of coins and confirming the transaction! Once your purchase has been made, all that’s left to do is securely store your new tokens in either a software wallet or hardware wallet to manage them. Be sure to remain vigilant when trading cryptocurrency – make sure you are comfortable with the current regulations and laws of the platform you are trading on. Moreover, always keep informed about potential scams and fraudulent activities pertaining to XLM purchases!

How Is Stellar (XLM) Used?

Cross-Border Payments

One of the most popular uses for XLM is cross-border payments. The Stellar network allows users to send global payments in any currency quickly and securely. Transactions occur quickly because XLM moves from one user to another in 2–5 seconds, making it easy for individuals to transfer funds across borders without having to worry about long wait times or high fees. Additionally, the transaction fees are incredibly low when compared with other payment systems. This makes XLM a great choice for international payments and remittances.

Decentralized Exchanges

Another way people use XLM is through decentralized exchanges (DEXs). DEXs allow users to trade different cryptocurrencies without having to go through a central authority or third party. They also offer more privacy since they don’t require users to provide personal information like bank accounts or credit cards before trading. Because of these benefits, many investors are turning to DEXs as an alternative to centralized exchanges such as the eToro social trading platformCoinbase crypto exchange or the Binance crypto trading platform. And since the Stellar network provides robust liquidity and fast transactions, it makes sense that many DEXs are built on the platform and use XLM as their primary currency.


At its core, a stablecoin is a cryptocurrency designed to remain stable in price over time by being backed by a physical asset or fiat currency such as USD or EUR. Stablecoins have become increasingly popular in recent years due to their stability and flexibility when it comes to cross-border payments and trading cryptocurrency on exchanges without needing access to fiat currencies like USD or EUR – something which can be difficult in certain countries due to banking restrictions or regulations. The Stellar network provides an ideal environment for issuing stablecoins because of its low transaction costs, fast transaction speeds, high scalability, and advanced security features that make it impossible for hackers or malicious actors from interfering with transactions on the network.

ICO Funding/Crowdfunding

Initial Coin Offerings (ICOs) are another way people are using XLM today – specifically as a way of raising funds for projects they’re working on via crowdfunding campaigns. By utilizing the Stellar network’s advanced security features, entrepreneurs can launch their own ICOs with ease while also taking advantage of its low transaction costs and fast confirmation times – allowing them to quickly raise funds from investors all around the world without having to worry about costly fees associated with traditional crowdfunding campaigns like Kickstarter or Indiegogo.

Smart Contracts/Digital Agreements

Lastly, many people are using XLM as a way of executing smart contracts and digital agreements between two parties without needing third-party intermediaries such as lawyers or government agencies. This is possible thanks to Stellar’s support for scripting languages such as JavaScript which allow developers create self-executing contracts that automatically execute certain actions based off predefined conditions set by both parties involved in the agreement.


Stellar (XLM) offers a unique solution when compared to other blockchains due its focus on providing fast and affordable cross-border payments processing while still being secure enough to protect user data from unauthorized access or manipulation by any single entity. Its native token Lumens (XLM) serves multiple purposes within the network, from facilitating transfers to incentivizing validators who secure the network against malicious actors. Whether you’re looking for an alternative way to pay for goods and services overseas or simply want to hold XLM tokens as an investment, it’s worth exploring all that Stellar has to offer crypto newbies!

Frequently Asked Questions (FAQs)

Stellar (XLM) coin Price is 0.124723 USD (Price updates hourly)!

Stellar (XLM) can be used for a variety of different purposes, from participating in Initial Coin Offerings (ICOs) to transferring money across borders and trading with other users. In addition to this, it can also be used for micropayments, smart contracts, and payments for services and goods.

Stellar (XLM) is popular due to many of its unique characteristics. It is one of the fastest and most reliable blockchain networks, processing thousands of transactions per second. Additionally, it has very low transaction fees compared to other cryptocurrencies, making it an ideal choice for micropayments and remittances.

Stellar (XLM) helps to solve the problem of cross-border payments. It provides users with a way to quickly and securely send money from one country to another, without having to rely on traditional banking infrastructure.

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