What is XLM Coin?

Cryptocurrency has the potential to revolutionize the tech, banking, and finance sectors. Proponents of cryptocurrency consider this invention as the most important one since the advent of the internet. There are several cryptocurrencies in the market. One of them is Stellar Lumens, which is represented as XLM. It has become one of the leading cryptocurrencies and is supported by several businesses and tech companies.

In this XLM review, we provide information on the basics of this currency, its uses, how to buy and store it, and other essential details. XLM coin is designed as a decentralized peer-to-peer network of validator nodes, but don’t be confused with decentralized and “decentralized finance” terms. They are a bit different. If you are interested in DeFI crypto, we advise you to read the most informative post about DeFi on changeNOW.io.

So What Is XLM Coin?

XLM cryptocurrency is used in the Stellar network to transfer funds instantly to any place in the globe. This platform can also carry-out multi-currency transactions.

What is XLM Coin?

Uses of XLM

Some key use cases of XLM include:

Mobile funds transactions: Solutions like Cash and Venmo are popularly used to send money to contacts. These applications are convenient alternatives to the currently used money transfer and banking systems. However, such apps can have some security issues and have high costs for patrons, which makes Stellar a good alternative.

International funds transfer: It can be costly and time-consuming to send money to recipients in other countries. But Stellar makes this transaction happen instantly. It uses its Lumen asset to transfer funds between currencies. It is expected that Stellar could help cut costs by approximately 20-25 bps by reducing liquidity and operational costs. “Bps” represents Basis Points, which is a common unit of measure percentages in finance (1 bps = 0.01%). Moreover, the near real-time settlement results in no in-flight period, thereby potentially eliminating Basel III costs. Basel III is the opportunity cost against credit exposure during the in-flight period, which is incurred by the sending institution (as designated by pending Basel III regulations).

What is XLM Coin?

 Microtransactions: Currently, it is cost-prohibitive to make small transactions up to a hundred dollars. Thus, small stores have credit card minimums. For a minimum $0.01 fee, Stellar can manage 600,000 transactions, which makes it great for micropayments. Sellers of low-value items can do business more profitably without the need to worry about transaction costs.

Developers are continuing to learn more about the Stellar network to devise new methods and use cases.

Supporters of XLM

Stellar Lumens coin is being used by leading companies like Stripe, KickEx, Deloitte, and IBM, among others. These enterprises are utilizing Stellar for purposes such as moving currency between branches in different nations, transferring funds between business units, minimizing transaction costs, and others.

For instance, IBM states that it prefers Stellar for reasons such as non-profit status, scalability, excellent team, token ownership transparency, and secure payments using any asset. The Stellar platform has been connected with IBM’s Financial Transaction Manager system, which in turn is integrated with SEPA, ACH, and other digital transaction networks.

How to Buy XLM

To buy XLM, you first need to obtain a Stellar wallet and your XLM address. Then, go to an exchange like Binance, Kraken, Coinbase, or any other and purchase XLM through a wire transfer or credit card. Finally, move the XLM to your wallet.

In the U.S., to purchase XLM, you can use Coinbase to buy Litecoin, Ethereum, or Bitcoin. Next, you can create your account on the Binance exchange and move your cryptocurrency to the Binance wallet. Finally, you should change your coin to XLM.

Where to Store XLM

If you wish to trade your XLM continuously, you can consider any widely-trusted exchange that offers good security and exchange rates. For XLM storage, you can use a mobile wallet or a hardware wallet, which is considered the safest. This can give you easy access to the cryptocurrency when you need it. For more secure XLM storage, you can consider Stellar’s distributed exchange named Stronghold. The platform even offers a desktop client to help with storage.

How Does Stellar Function?

Stellar is different from its top competitor, Ripple, as it concentrates on fulfilling individual needs rather than the requirements of big financial institutions. The network seamlessly links individuals, payment systems, and institutions across the globe. Currently, the platform is operated by a worldwide consortium of entities and individuals located in all regions.

Stellar uses decentralization to enhance the currently utilized transfer methods. It leverages a distributed ledger to boost transparency and efficiency for users. The ledger preserves all the information on the platform, including transaction histories. Additionally, it maintains a record of all the transactions performed since the network’s inception.

It is easy to use the Stellar network. Similar to widely utilized payment processors like PayPal, you first need to upload money to the platform. Stellar then uploads the funds to Anchors. An anchor acts as a medium between the network’s distributed ledger and fiat currency. Thus, anchors play a crucial role in the Stellar platform.

After your money is available on Stellar’s distributed ledger network, you can easily send it to any place in the world.

For instance, consider sending US$1,000 to someone in Europe. You simply need to upload your USD amount to an anchor in the Stellar network to get USD credit on the platform. Next, you can move your credit to your European friend. During the transfer, Stellar automatically converts the USD amount to the Euro using the lowest exchange rate. The converted funds are deposited in your contact’s account, so they can withdraw the same. The whole process takes just seconds and happens in the background. Using this streamlined method, Stellar simplifies money transfers for average people.

Support for Several Fiat Currencies

Stellar uses three protocols to perform transactions. First, it converts your money from its order book and carries out a streamlined transaction. Next, it changes your money to XLM and transfers the funds internationally. After the money reaches its destination, Stellar sells the XLM and changes it to the local currency. In this process, XLM crypto is utilized as an intermediary.

Crucially, transferring cryptocurrencies internationally costs only a fraction of the fees charged by conventional fund transfer platforms. These charges could be as high as 7% of the transferred amount in traditional banking as they are used to cover the costs of third-parties that carry out the transactions.

Chain Transactions

Stellar also has the ability to execute complicated chain transactions. For instance, if you cannot find a direct currency equivalent for your trade, Stellar can perform a multiple trade transfer. For instance, it can first convert your USD into GBP and GBP into the Euro, if it is unable to find a direct USD to the Euro trade.

Stellar Exchange

A highlight of Stellar is that it can place exchange orders within the network. These orders are instantly placed on the public ledger. This allows you to select a host of currencies. You can use this system to exchange your money for both crypto and fiat currencies.

What is XLM Cryptocurrency’s Role in the Stellar Network?

Stellar can manage the digital versions of any currency, but its developers have still created the native XLM crypto. All users of the platform need to own some XLM to utilize it. This is mandated so that the system can avoid spam and non-serious users.

Another reason why Stellar created a native currency is to ensure that the platform does not get linked to a specific currency. For instance, if the network stipulated that you hold some USD, then it would become tied to the American market and the US dollar’s performance. Stellar’s developers wished to avoid this situation.

Unlike other cryptocurrencies, Stellar doesn’t need nodes to mine transaction blocks. Also, network users don’t get rewards for validating the blockchain. In this way, Stellar is different from cryptocurrencies like Bitcoin. The firm issued 100 billion XLM for its launch. Its developers initially planned to increase the currency’s supply by 1% each year for about six years.

In October 2019, Stellar’s developers changed their approach and decided to reduce XLM’s supply going forward. They pared down the amount to 50 billion and don’t plan to issue more XLM crypto in the future. As a result, currently, about 20 billion XLM is available on the market, and the firm has retained the other 30 billion. It uses the funds to expand the XLM infrastructure, marketing, and development. 

What is XLM Coin?


Stellar’s profound expertise and unique market approach have made XLM a widely used cryptocurrency. This popularity is bound to increase as more users start utilizing blockchain technology for money transfers and other financial transactions.

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