How to Buy Stellar?
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Stellar Lumens (XLM) seem to be all the buzz these days at cryptocurrency markets around the globe. Its huge growth has sent investors scrambling to get their hands on what is being described as the next Bitcoin. From March to December last year, Stellar Lumen has seen a nosebleed-inducing 6300% rise in value. It has just broken into top ten coins by market capitalization, with almost $8.5 billion worth of lumens. But what is all the hype about and how can you make some money out of it?
What are Stellar Lumens?
First, let’s start with the terminology. Stellar is the name for the network designed to become a platform for global payments. Think of PayPal, but with fewer restrictions and far more flexibility or, as the founders of Stellar say “a worldwide financial network open to anyone.” The currency they use to level all those payments is Lumen.
The main reason behind Lumen’s popularity and growth is the blockchain technology Stellar uses. It is highly decentralized and innovative, two buzzwords that rouse the imagination of every cryptocurrency investor. Network’s many distributed servers ensure that information isn’t stored in only one place and that any attack can deal only limited damage to the entire system. Considering the world we live in, it is easy to see the appeal of the idea. For more about it, visit our complete Stellar guide.
Buying Stellar Lumens
Buying Lumens with a fiat currency like USD isn’t an option at this stage, so in order to buy some of the Stellar coins, you need to do it indirectly. There are four basic steps in the process and we will explain each of them further along:
- Get a wallet. We have a detailed overview of some of the more popular Stellar wallet in the second part of the article, simply choose below the one you are most comfortable with and make an account.
- Buy some Bitcoin. A detailed guide to buying bitcoin can be found down below.
- Exchange Bitcoin for Stellar Lumens on one of the exchanges. Again, there is a detailed guide helping you choose one further long in the article.
- Store them in your wallet.
Where to Buy Stellar? Best Stellar Exchanges
There are several Stellar exchanges where you can buy XLM outside the Stellar network. Here is an overview of some of the most popular ones.
- First, you need an account. You can get one by clicking Register button in the upper right corner. It is strongly recommended to enable 2FA (Two Factor Authentication). Although this means that you have to have Google Authenticator app, it adds another layer of security and you can’t have too much security when dealing with cryptocurrencies.
- Once your account is set up, you need some money on it. Go to your bitcoin stash and send it to your Binance account. For this, you will need a Binance bitcoin address you can find in Deposits under the Funds tab.
- Copy and paste the address into your Recipient box and click send. This is the longest part, as it may take several hours for the transaction to finish.
- Once your bitcoins arrive, go to Exchange tab and choose the Basic view. Don’t get overwhelmed with the appearances, they are bound to look confusing to any newcomer.
- Since cryptocurrencies are traded in trading pairs, you need to find XLM/BTC pair. Simply type XLM in the search box just above the ledger. Click on that link and it will take you to a new page, where you will see a Buy XLM option.
- Just enter the desired amount and voila, you are now a proud owner of some Stellar coins.
Fees: 0.1% trading fee.
Concerns: Binance is based in China and at this point, it is still unclear how a recent Chinese clampdown on cryptocurrencies will affect them and their users. Also, 2FA is only available for Chinese phone numbers.
The process is pretty straightforward-
- Sign in.
- The next step is depositing some bitcoin and you do this by clicking on the wallet button in the upper right side of your screen and choosing an appropriate wallet, which will provide you with a recipient address.
- Under Bitcoin Market, find a BTC/XLM pair, click on it and place an order to buy Stellar cryptocurrency in “Buy” box.
- On Bittrex, you can choose from three markets, depending on the currency you are using:
- Bitcoin Market
- Ethereum Markets
- USDT Markets
Concerns: One of the main customers’ complaints was a very long verification process for new users, due to a strict safety system established by Bittrex, which is one of the reasons behind their decision to disable new account creation on January 2018.
If you are in Australia, Coinspot is probably your best choice for Stellar buy, as you can buy it for AUD directly, without having to go through the hustle for getting bitcoin first. If you don’t have any AUD, you can deposit bitcoin, litecoin, or dogecoin into your account and trade with them.
Fees: 2% to 3% depending on the coin.
Kraken is one of the oldest most renowned cryptocurrency exchange on the Internet. Founded in 2011, it always prided itself on its security and is considered as one of the safest ways to trade coins.
- The procedure to buy Stellar coins is pretty much the same as with other exchanges.
- After depositing your bitcoin, you can buy lumen by going to Account > Trade > New Order and placing the order for the desired amount.
- After that, you can transfer them to your XLM wallet via the Withdraw button.
Fees: 0.0% to 0.26% depending on the trading pair.
Choosing a Stellar Wallet
Digital wallets have come into existence after several highly prominent (and borderline idiotic) incident involving people losing or throwing out hard drives storing their bitcoins. Wallets are a partial solution to that problem. They are designed to store your private keys in a manner that is secure, yet accessible. Instead of keeping your coins in public wallets on the exchanges, where they can be targeted by hackers, you can store them in Stellar wallets. Before choosing your stellar wallet, there are few things to consider first. There are several types to choose from and we will outline pros and cons of each one.
Some would say that paper wallets are an anachronism and when you think about it, it is somewhat strange to keep a digital currency on a sheet of paper. And paper wallets are exactly that, sheets of paper with printed private keys. The upside is that they can’t be hacked or lost due to virus, glitch, or hardware failure. The downside is that they can get damaged, lost, or even stolen.
Hardware wallets are gaining popularity due to their inherent safety and accessibility. They provide storage that is offline, and therefore inaccessible to hackers, and provide added layers of security with PIN codes and the ability to generate a recovery phrase. They do cost money though, and they can get lost.
Software wallets come in two flavors, desktop, and mobile. Essentially, they are programs you need to install onto your device. They are easy to use and keys are stored on your hard drive. However, your device can get hacked or catch a virus, plus there’s always a possibility of a hardware failure.
Web wallets are the least secure option, yet they offer the best accessibility. They are very easy to use and some of them are connected directly to an exchange, saving you the hustle and expenses of transferring coins. Downsides are numerous, though. They are highly vulnerable to hackers, keys are stored on their servers you have no access to and can go offline at any time, preventing you from accessing your funds.
Ledger Nano S is currently considered a top-notch solution for storing all your cryptocurrencies. It is a hardware wallet in a form of a USB stick with a screen. It is also considered one of the safest wallets on the market since the actual coin keys never come in contact with your computer, hence the probability of it getting hacked is pretty much non-existent. It features a PIN security, which will wipe the wallet clean if entered incorrectly three times. Panicking yet? No need, Ledger allows you to store a recovery seed on the device that will allow you to retrieve your coins. The downside? It costs $95 on preorder. Still, many would argue that it is a small price to pay for the security it offers.
Stellarterm is basically a trading client you can use to buy and store lumens. Despite its name, it isn’t connected to the Stellar network but rather developed by one of their former employees, Iris Li. One downside is that it doesn’t allow transactions between different users. It also requires a minimum balance of XLM 20 in order to allow login.
LuPoEx is another trading platform and web wallet designed to work with the Stellar network. It offers real-time trading and real-time account monitoring, with the ability to connect a hardware wallet to the account, if you need more security.
Designed as an entry and exit point for the Stellar network, Stronghold offers not just a safe wallet for cold storing stellar wallet, but also a possibility for direct trading, without the need for depositing your coins to another exchange.
Stargazer works on both mobile and desktop. It is important to note that you have to keep an XLM 20 balance at all times on your account in order to use it, which could be a problem if you decide to close the account and withdraw all funds.
to Sum Up…
There are of course those that claim that recent Stellar’s incredible growth is a thing of the moment. While predicting cryptocurrency movement is a tall order, we beg to disagree. The entire project is a well-thought of and even better implemented and has the backing of some major players on the global market. From what we can gather, Stellar is here to stay.
Thanks for reading and make sure to check out more of our in-depth guides if you have any questions on various aspects of cryptocurrency investments.