Stellar (XLM) - All you need to know
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Ways to invest in Stellar
The most straightforward option is to sign up for a broker or exchange platform and buy some coins. Then you can trade quickly or hold for the long term to try to benefit from price increases over time.
If you want help picking coins or don’t have the time to micromanage your way through your investing journey, there are vehicles to help you. Managed funds or exchange-traded funds can generally be left alone. Keep reading to find out about the different ways to invest.
What is Stellar?
Stellar is a platform for moving money around the world. It’s like PayPal on the blockchain, where its users can send and receive money in any currency or cryptocurrency. To be able to create an account and make transactions, you need Stellar Lumens, the platform’s own crypto coin, that’s also known as XLM.
Set up in 2015, Stellar’s ultimate goal is to make money ‘borderless’, where people can spend and hold money in lots of different currencies without needing bank accounts in every country or worrying about exchange rates. XLM is crucial to this process, as it’s an entry requirement to use the platform.
How does Stellar work?
Stellar works by recording all transactions made through the platform on its own blockchain. That blockchain is like a ledger, which stores what each person owns and any transaction they want to make.
Rather than being run by a central authority, the Stellar blockchain relies on a network of computers to run the network and constantly check and recheck the ledger to make sure it’s accurate.
All of this is publicly available information and anyone can join the network as one of the computers that helps host it. Each one has voting rights, so the power is decentralised – unlike a bank where the power is held in one place.
How to invest in Stellar
There are lots of options available to you and which one suits your style depends on your goals, timeframe, and budget. Read through the list below to familiarise yourself with what the market looks like.
- Broker platforms. You can get coins quickly and easily with a broker account. Sign up in a matter of minutes, find the Stellar lumens page, and buy at a set price. Some brokers charge a small commission on every trade and only offer the top cryptocurrencies, so you might need to do some research to find one that offers Stellar.
- Cryptocurrency exchanges. An exchange is a peer-to-peer trading platform. That means that rather than going through an intermediary, you buy and sell coins directly from other users. Exchanges are a little more advanced than brokers but they have the widest variety of coins available. Be aware that often you need to purchase smaller cryptos like Stellar with Bitcoin, so you need to exchange your fiat currency for that first.
- Funds. A fund is a ready-made portfolio managed by a professional. You can get a stake in a fund like you would a share, but they are usually quite expensive to join so might only be appropriate for wealthier investors. Within the fund, the manager decides which assets to buy and sell, so look for cryptocurrency funds to see if one holds Stellar.
- Mutual funds. Just like a fund, a mutual fund has a manager who decides what to invest in. A mutual fund pools money together from lots of different investors and hands it to that manager, who takes the responsibility of building a portfolio that produces the best returns for the group. They are a cheaper option than funds.
- Stellar ETFs. An exchange-traded fund is like a mutual fund, in that it’s very simple and requires little management from your end. Instead, an ETF owns lots of assets from within a particular sector or industry and so its price and performance reflects that of the wider market. Cryptocurrency ETFs or Stellar ETFs might be a good way to gain exposure to lumens without owning the coin itself.
- Crypto debit cards. You can put your coins to work, funding your day-to-day lifestyle by getting a Stellar debit card. These work in just the same way as a regular debit card, you can use them to buy online with merchants that have chosen to accept cryptocurrency. At the moment, crypto debit cards are available only for the most popular coins but as the industry grows, more and more coins are added.
- Smartphone apps. Manage your money on the go with a mobile app. Apps are a great way to stay in touch, wherever you are and whatever you’re doing. That’s especially useful in the world of cryptocurrency, which tends to move fast and where prices are volatile. You can find apps to buy and sell, trade, and store your Stellar.
- Stellar wallets. A wallet is a way of storing your coins that’s more secure than leaving them in a broker or exchange account. Wallets use encryption to store your coins behind a unique private key, and range from focusing on convenient security all the way up to maximum protection.
Where can I buy Stellar lumens now?
Latest Stellar price analysis
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