Stellar's Lumen: Cryptocurrency Review, How and Where to Buy
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June 25, 2018
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Stellar is an open-source platform that connects banks, payment systems, and people.

On its website, the platform claims: “Using the Stellar network, you can build mobile wallets, banking tools, smart devices that pay for themselves, and just about anything else you can dream up involving payments.”

Micropayments enable to decrease the cost of smaller transfers and thus offer incremental payment options to customers.

A lower cost of remittances allows quickly sending money to different countries for a fraction of a cent. Furthermore, it helps facilitate low-cost payments between different currencies.

History of Stellar

Stellar was founded in early 2014 by Jed McCaleb, founder of Mt. Gox and co-founder of Ripple. He founded the network with former lawyer Joyce Kim. The nonprofit Stellar Development Foundation was created in collaboration with Stripe CEO Patrick Collison and the project officially launched in July 2014.

The Stellar network refers to the open source, distributed, and community-owned technology that processes financial transactions. is the nonprofit organization that contributes to the development of tools and social good initiatives around the Stellar network and financial inclusion.

By January 2015, Stellar had approximately 3 million registered user accounts on its platform and a market cap of almost $15 million.

The Stellar Development Foundation released an upgraded protocol with a new consensus algorithm in April 2015 which went live in November 2015.

How it works

To use the Stellar network, users first need to create an account that sends and receives payments and keeps their money inside Stellar.

Every Stellar account has a public key and a secret seed. Stellar uses public key cryptography to ensure that every transaction is secure, while the public key is always safe to share—other people need it to identify your account and verify that you authorized a transaction.

Each account must have a minimum balance of 0.5 Lumen (the built-in currency of the Stellar network). This aims to prevent people from making a huge number of unnecessary accounts.

After an account has been registered, one can send and receive funds through the Stellar network. Here’s how one might send 10 Lumens to another account:

There is no need to anything to receive payments to a Stellar account if the payer makes a successful transaction sending assets, those assets will automatically be added to the user’s account.


Lumens are the native asset of the Stellar network. In 2014 the Stellar network launched with 100 billion Stellars, the original name of the network’s native asset.

In 2015 the name of the native asset changed from Stellar to Lumen to distinguish it from the Stellar network itself and

Lumen Distribution

At the genesis of the Stellar Network, 100 billion Lumens (XLM) were created. As part of its custodial mandate, the Stellar Development Foundation (SDF) is entrusted to oversee that the vast majority, 95 billion, of the lumens are distributed to the world.

The initial lumens held by SDF are required to be distributed to the world in the following manner:

  • 50% for distribution via the Direct Sign-up Program
  • 25% for distribution via the Partnership Program
  • 20% for distribution via the Bitcoin Program
  • 5% held by SDF to support operational costs

As of today, Stellar has given away over 8.1 billion Lumens. The platform is giving away

Lumens for free to achieve a more inclusive digital economy. This step is an invitation to communities to design the services they need to eventually have citizens from around the world own and use XLM in both developing and developed economies.

In the future, after Stellar will have given away all the Lumens, this is expected to happen over the next 10 years, everyone will need to procure Lumens from third parties.

An up-to-date statistics on the number of Lumens given away is available on dashboard.

SDF allocated 20% of the initial Lumens to be distributed for free to holders of Bitcoin and XRP (19% for Bitcoin holders and 1% for XRP holders) encouraging Bitcoin holders to explore and use Stellar, encouraging exchanges to support Lumen trading, promoting the development of useful Stellar ecosystem technologies, and encouraging Stellar integrations by financial institutions and service providers.

The Bitcoin Program was completed in two stages: the first stage was completed in October 2016 and the second was completed in August 2017. SDF does not intend to conduct another round of Lumen distribution to Bitcoin or XRP holders.

Auction, which reserves 5% of the original 100 billion Lumens to support its operations periodically auctions off a portion of the reserved Lumens. No one formally associated with—e.g., employees, consultants, or board members—will participate in the auction. may sell larger batches of the reserved Lumens to private parties interested in supporting the mission.

How to buy Stellar's Lumens?

Price tracker lists Stellar as the 7th largest cryptocurrency with a total market cap of over $4.3 billion and a daily trading volume of $38.8 million. The price of Stellar is currently equal to $0,235.

Lumens are available on several licensed exchanges, including Binance, OKEx, Urbit, Poloniex, Kraken, and others. The New-York-based itBit exchange was the last toannounce support for Lumen.

For example, before buying from Binance, one will need to have some of the base cryptocurrencies, like the Bitcoin or Ethereum to exchange for the Stellar Lumens.

To buy Lumens with Ethereum, search for the XLM/ETH pair and click on it to load the Stellar Lumens price chart.

Beneath the chart, it is necessary to locate the ‘Amount field' under the Buy XLM section, enter the number of Stellar Lumens coins to be bought and click on the Buy XLM button.

Now the XLM funds should appear on the user’s Binance account.

Partnership grant programs is accepting proposals from leading organizations that are building on the Stellar network to improve the global financial landscape and promote financial inclusion.

To incentivize its partners and reward network development, will award selected partners up to $2,000,000 USD worth of Lumens per grant.

The Stellar Development Foundation has allocated 25 billion total Lumens to this program to incentivize institutions who make an exceptional impact. The Lumens will be awarded and later subject to a lockup period after the achievement of measurable milestones.

Transaction fees

There’s a nominal fee, referred to as a base fee, associated with each operation in a transaction.

The base fee is currently set to .00001 XLM. The sender of the transaction incurs the fee.

This fee prevents users with malicious intentions from flooding the network (otherwise known as a DoS attack).

No one profits from the base fee. The ledger collects the fees and redistributes them in the process of inflation.

The Stellar network also requires all accounts to hold a minimum balance of 0.5 lumens to eliminating abandoned accounts and ensure that all accounts are likely to have economic utility on the network.

Stellar's Lumen Wallets

Lumens are supported by a number of different wallets. The desktop, mobile and web wallets are available to download from the official website. Lumens are also supported in the Ledger Hardware wallet - the safest way to store cryptocurrencies long-term.


Organizations around the globe use Stellar for fast, low-cost, secure transactions. Below is a list of some early adopters of the Lumen cryptocurrency:

IBM – one of the world’s foremost hardware, software, and tech consulting companies.

Telindus – a leader in Data Management, Cloud Services, Fixed/Mobile Telecommunications, ICT Infrastructure & Security.

Wangxiang – a frontier research institution focused on blockchain technology.

Tempo - a high-tech European licensed remittance provider headquartered in Paris, France. Tempo is currently serving 43 countries, with over 3,000 network partners.

Hijro – a financial operating network for global trade powered by distributed ledger technology.

Mifos - an extended platform for delivering the complete range of financial services needed for an effective financial inclusion solution.

MONI– a pioneer of consumer driven finance with a vision to provide a ‘banking’ account to every person with a mobile phone.

Rehive – the fastest and most affordable way to build, launch and scale your web or mobile-based payments app.

Poseidon – An eco-friendly company that uses Stellar blockchain technology to access the carbon market.

Factury - blockchain-powered secondary market for loans originated by non-bank lenders.

Stellar vs. Bitcoin

The main differences between the Stellar network and Bitcoin is based on a consensus algorithm rather than mining, which means transactions are confirmed in a few seconds.

The supply of Lumen increases at a fixed rate of 1% a year. Stellar Lumens has a lower transaction fee than Bitcoin. Besides, Stellar aims to let anyone transact in any given currency (fiat or digital).

By Bob Loxley

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