Stellar for beginners:
Step-by-step guide

Stellar aims to enable the easy global flow of payments (and currencies), just as the internet enabled the free global flow of information.

Keli Oliseh
Keli Oliseh • Dec 14, 2022
Last updated: Jan 25, 2023
Stellar for beginners - Chillur

Stellar is a top-performing cryptocurrency with a mission similar to Ripple's (XRP): to connect financial institutions and drastically reduce the cost and time required for cross-border transfers.

Put another way, Stellar aims to enable the easy global flow of payments (and currencies), just as the internet enabled the free global flow of information.

Although Stellar and Ripple have nearly identical missions, they pursue them differently.

This article aims to answer the question, “What is Stellar?” It aims to present you with a beginner’s guide to Stellar. By the end of the article, you should have a solid understanding of Stellar and its token, Lumen, what you can do with it, how to invest in it, and how to buy it.

What is Stellar?

Stellar is a payment technology designed to make cross-border money transfers faster, more accessible, and more affordable than traditional financial networks. It was founded by Jed McCaleb in 2014 and is managed by a non-profit called Stellar Development Foundation (SDF).

Jed McCaleb, by the way, is one of the co-founders of Ripple. Therefore, it’s no surprise that Stellar’s mission is similar to Ripple’s. Reports have it that Jed left Ripple to found Stellar because of a difference in opinion and philosophy with other members of the Ripple Team. These rumours lead us to an important question: “In what way is Stellar different from Ripple?”

“I do think most things will have a digital representation. It just makes so much more sense, and it’s easier.”
— Jed McCaleb, Founder, Stellar

For one, Stellar is open source, which means its source code is available to the public. Put simply, anyone can copy, modify, and redistribute the Stellar Network source code without paying any fees to the Stellar Development Foundation. Ripple, on the other hand, is run and controlled by a for-profit company.

More so, Ripple and Stellar have different customers. Ripple is profit-oriented and focused on streamlining the cross-border money transfer processes of global banks and large financial institutions. Stellar, on the other hand, is focused on developing markets. Stellar targets the unbanked, and it has a noble goal of creating a more inclusive digital economy.

The Stellar Network has its native digital currency. It’s called the Lumen. Lumen trades under the symbol “XLM”, and it powers all the operations on the Stellar Network.

How does Stellar work?

Let’s say you wanted to transfer Australian dollars to a receiver in Argentina. First, Stellar converts the AUD to XLM. Then it sends the payment to the intended destination via their blockchain. And, upon arrival, converts XLM back to pesos. And all of the action happens within 2-5 seconds. For context, a bank-to-bank transfer would take a minimum of 7 days and potentially as long as 21 days.

Also, if you want to save your money in, say, US dollars, you can create a digital representation of the US dollar as a token on the Stellar network. The stablecoin attached to the US dollar on the Stellar network is the USDC.

It’s worth emphasising that Stellar isn’t intended to replace the existing financial system. Instead, it’s supposed to augment it. According to the Stellar website, Stellar is “designed so all the world’s financial systems can work together on a single network.” “Whereas, say, the Bitcoin network was made for trading only bitcoin, Stellar is a decentralised system that’s great for trading any kind of money in a transparent and efficient way,” they added.

Put simply, Stellar’s goal is to make it possible to create digital representations of all forms of money—fiat money and digital currencies—and transfer it at a fraction of the time and cost.

What can I do with Stellar Lumens (XLM)?

Here’s how you can use Stellar Lumens:

Stellar for currency exchange

Exchanging fiat money and even cryptocurrencies is an expensive and time-consuming process. With Stellar, the exchange is much faster and cheaper.

Stellar for international transactions

By design, one of Stellar’s essential uses is to facilitate the speedy and low-cost transfer of payments (or currencies) across international borders.

Stellar as an investment

Lumen (XLM) has value. Therefore, you can buy and hold them just like you would purchase BitcoinEther, or stocks. Lumen has jumped in value by over 34,000% since it launched in 2014. And there’s a good probability that its value will continue on the upside.

How to buy Stellar Lumens (XLM) in Australia?

You can buy Stellar Lumens through any digital currency exchange. All digital currency exchanges in Australia are regulated by AUSTRAC.

Chillur is an Australian digital currency exchange, registered and regulated by AUSTRAC that simplifies the process of buying Stellar Lumens in Australia.

You can buy Stellar Lumens in Australia using Chillur in two easy steps.

Step 1: Create an account

Create your Chillur account using an email address and password. You will then need to verify your identity using either your passport or drivers licence.

Step 2: Transfer funds to your account

Use your banking app or web banking to transfer funds to your Chillur account.

Once the funds settle (1-2 business days), the system will automatically buy Stellar Lumens (and 9 other cryptocurrencies).

Congratulations! You now own Stellar Lumens in your Chillur account

How to invest in Stellar Lumens?

Investing in Stellar Lumens is the process of buying Stellar today with the expectation that it will go up in value in the future.

Portfolios with Stellar have seen returns of 200% after 3 years.

You can invest in Stellar Lumens using Chillur in three easy steps.

Step 1: Create an account

Create your Chillur account using an email address and password. You will then need to verify your identity using either your passport or drivers licence.

Step 2: Buy the Chillur 10 bundle

Chillur offers bundles of cryptocurrencies. What this means is that rather than picking and choosing which cryptocurrency to buy and at what price, you are able to buy 10 cryptocurrencies in a go. Chillur handles how much and the purchase price.

Step 3: Track your investment performance

Simply login into your Chillur account and track the performance of your portfolio either through a laptop or your mobile phone.

Where do I store my Stellar?

Lumens are stored in digital wallets, just as fiat money is stored in physical wallets.

Lobstr— a third-party mobile and web-based digital wallet—is popularly considered the leading platform for storing Lumens.

Other popular downloadable wallets include Keybase and Solar Wallet.

Besides web and mobile apps, you can also store your Lumens on physical USB-like devices like the Ledger Nano X or the Trezor Model T.

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Crypto exchanges like Coinbase and Binance also double as wallets. So you can conveniently leave your Lumens on the exchange you purchased from.

What’s next for Stellar?

The future looks quite promising for the Stellar network and its digital currency, Lumen (XLR). The SDF already has notable partnerships with tech-giant IBM and  Tempo, a France-based money transfer provider.

Other notable supporters or contributors to the Stellar mission include Stripe CEO Patrick Collinson, who supported Stellar with over $3 million in seed funding. Big-name organisations like Google, BlackRock, and Fastforward have also donated to Stellar. The involvement of these companies suggests that Stellar is a good asset and promising investment.

Nothing is certain, though. So don’t let FOMO compel you to get in on this investment. Take time out to learn more about Stellar and about whether you want to invest in it.