What Is Stellar?
The Stellar network is an open-source, distributed and community-owned blockchain network used to facilitate cross-asset transfers of value. Stellar aims to facilitate these transfers at a fraction of a penny, while aiming to be an open financial system that gives people of all income levels access to low-cost financial services. The native digital currency of the Stellar network is known as Lumens (XLM). Every Stellar account is required to hold a small amount of Lumens to act as a barrier against spamming the Stellar payments system. Through the use of Lumens, a user can send any currency that they own to anyone else in a different currency. Stellar also supports smart contracts.
Stellar was co-founded by former lawyer Joyce Kim and Jed McCaleb in 2014. Jed McCaleb is also the founder of the now-defunct Mt. Gox exchange, and the co-founder of Ripple. In fact, both payment networks used the same protocol initially. Like Ripple, Stellar is also a payment technology that aims to connect financial institutions and drastically reduce the cost and time required for cross-border transfers, although while Ripple focuses on banks, Stellar focuses on banking the unbanked. One of Stellar’s largest partnerships is with IBM — signed in October 2017 — to set up multiple currency corridors for ease of payment in the South Pacific.
Stellar is also supported by the Stellar Development Foundation, a non-profit that helps with the maintenance of Stellar’s codebase, and supports Stellar communities, among other things.
How Do You Mine Stellar?
Unlike proof-of-work cryptocurrencies like Bitcoin, Stellar can’t be mined. When the Stellar network went live in 2014, 100 billion Lumens were created with a 1% annual inflation rate. However, in October 2019, a community vote ended the inflation mechanism, and the overall lumen supply was reduced in November 2019, leaving the total supply at around 50 billion Lumens with no more Lumens to be created. While around 20 billion Lumens are in the open market, the Stellar Development Foundation has the other 30 billion, which it uses to support the Stellar ecosystem, but those Lumens will also gradually enter the open market.
How do I buy cryptocurrency?
While some cryptocurrencies, including bitcoin, are available for purchase with U.S. dollars, others require that you pay with bitcoin or another cryptocurrency.
To buy cryptocurrencies, you’ll need a “wallet,” an online app that can hold your currency. Generally, you create an account on an exchange, and then you can transfer real money to buy cryptocurrencies such as bitcoin or ethereum.
Coinbase is one popular cryptocurrency trading exchange where you can create both a wallet and buy and sell bitcoin and other cryptocurrencies.