Stellar (XLM) Cryptocurrency Frequently Asked Questions

The Ultimate List for 2021

  1. What is Stellar? What does 'Stellar' mean?
  2. How does Stellar work?
  3. Who invented Stellar? How was Stellar created? Who is behind Stellar?
  4. What is Stellar used for?
  5. Why does Stellar have value?
  6. How many Stellar coins are there? What is the Stellar maximum supply?
  7. What is a Stellar transaction? How do Stellar transactions work? Is Stellar a blockchain?
  8. Are Stellar transactions anonymous? Can Stellar be traced?
  9. Can Stellar be mined? What is Stellar mining? How does Stellar mining work?
  10. Can Stellar be taxed? Are Stellar gains taxable? Are Stellar transactions taxable?
  11. How does a Stellar ATM work? Are Stellar ATMs safe? Are Stellar ATMs anonymous?
  12. Can Stellar scale?
  13. Can Stellar be stolen?
  14. Can Stellar be hacked?
  15. Where is Stellar stored? Where to store Stellar?
  16. What is a Stellar wallet? How do Stellar wallets work?
  17. Who uses Stellar? Where is Stellar used?
  18. Who accepts Stellar? Where is Stellar accepted?
  19. Why is Stellar the future?
  20. Can Stellar crash? Will Stellar crash?
  21. Is Stellar a good investment?
  22. Where to buy Stellar? How to get Stellar?
  23. Can I buy Stellar without ID? Is there a way to get Stellar without SSN?
  24. Can I get Stellar without KYC? Is it possible to buy Stellar without verification?
  25. Is Stellar better than Gold or Precious Metals? Should I buy Gold or Stellar?
  26. Is Stellar publicly traded? What are Stellar stocks? How does a Stellar ETF work?
  27. Can Stellar reach 1? Can Stellar reach 10? Can Stellar reach 100?
  28. How much time is a Stellar transaction? How long does Stellar take to transfer?
  29. How many confirmations for a Stellar transaction?
  30. How much is a Stellar transaction fee? How much does a Stellar transaction cost?
  31. Is Stellar a blockchain? What is the Stellar blockchain? How does the Stellar blockchain work?
  32. What is a Stellar address? How do Stellar addresses work?
  33. What is the Stellar network? How does the Stellar network work?
  1. What is Stellar? What does 'Stellar' mean?

  2. Stellar is inspired by some of the design concepts of Bitcoin, the world's first decentralized cryptocurrency, but with several attempts at improvement. A decentralized cryptocurrency keeps track of all transactions by all addresses on a peer-to-peer shared record. One of Stellar's innovations is extremely low transaction fees and extremely fast transaction times, through a system of trusted nodes. Stellar is traded on bitni.com.

  3. How does Stellar work?

  4. Blockchain based cryptocurrencies like Stellar work by grouping transactions together in data blocks, then linking the blocks cryptographically. The chain of blocks is stored across a network of trusted nodes known as validators, and distributed as peer-to-peer shared files. Quantities of Stellar are stored at addresses, cryptographic sequences paired with a private key used to spend the amount at the address. The user's wallet keeps track of all their Stellar addresses and adds up the balance.

  5. Who invented Stellar? How was Stellar created? Who is behind Stellar?

  6. Stellar was created by Jed McCaleb as an attempt to technically improve Bitcoin, reducing transaction times to a few seconds instead of 10 minutes, by replacing computationally expensive proof of work with a system of trusted nodes. Stellar is maintained by Stellar Development Foundation (SDF), and the software is open source, so anyone can improve it.

  7. What is Stellar used for?

  8. Stellar is used for anything money is used for - buying, selling, donations. But Stellar can also be used for even more things than fiat currency: A means of accepting donations or facilitating commerce that cannot be shut down by governments or the banking system. Also storing up wealth that cannot be confiscated.

  9. Why does Stellar have value?

  10. Stellar has more value than Fiat Currency because it's more useful: It's anonymous, decentralized, irreversible, cannot be devalued, cannot be confiscated, can be sent over the internet to anywhere in the world in minutes. Things that are very useful and scarce tend to be valuable. One reason Stellar has value because it fulfills all of the requirements of money: Store of Value, Medium of Exchange, Unit of Account.

  11. How many Stellar coins are there? What is the Stellar maximum supply?

  12. All the Stellar that will supposedly ever exist was created at it's beginning - 50 billion. The designers were very conscious of hyperinflation from fiat currencies, and wanted a currency with a ruthlessly fixed supply. Not only that, but the Stellar Development Foundation (SDF) destroyed a 55 billion tokens. This makes Stellar a deflationary currency.

  13. What is a Stellar transaction? How do Stellar transactions work? Is Stellar a blockchain?

  14. An Stellar transaction is a transfer of value from one address to another. Unlike Bitcoin, which moves value by spending previously unspent transactions, Stellar doesn't have a blockchain which requires solving computational hashes to add new blocks. A transaction is created by a user on their Stellar client software, then broadcast out to all the other nodes and becomes part of the Stellar Ledger.

  15. Are Stellar transactions anonymous? Can Stellar be traced?

  16. The XRP Ledger is a public record of all transactions by all addresses. However, an address is just a number - it doesn't reveal anything about the identity of the one using it, like a street address can. As long as this number is never linked to an identity, the Stellar user is safe. There is no way to "trace" a Stellar address to the person using it - unless they leave clues connecting their Stellar address to their physical identity. bitni.com has maximum anonymity - we don't ask for personal details.

  17. Can Stellar be mined? What is Stellar mining? How does Stellar mining work?

  18. Stellar is not minable. Traditional cryptocurrency mining is the computational process of adding new blocks to the blockchain. New transactions are grouped together in a block. New blocks must cryptographically connect to previous blocks with a proof-of-work hash function. Stellar doesn't have a blockchain, but something both similar and different called a Stellar Ledger. The Ledger is a record of all transactions like the blockchain, but rather than validation by anyone who performs the proof of work, transactions are validated by trusted nodes.

  19. Can Stellar be taxed? Are Stellar gains taxable? Are Stellar transactions taxable?

  20. Stellar was not designed to be taxed. If no one reports their Stellar gains, there is no way an authoritarian regime can know who gained what. However, centralized exchanges with accounts and IDs do report their user's Stellar balance to tax authorities. If you want privacy from authoritarian regimes, you need an accountless exchange that doesn't ask for your ID - bitni.com is the best exchange in this regard.

  21. How does a Stellar ATM work? Are Stellar ATMs safe? Are Stellar ATMs anonymous?

  22. Stellar ATMs allow a customer to buy Stellar by inserting physical cash, like a vending machine, or send Stellar to receive physical cash. (The former are called "1 way" ATMs and the latter are called "2 way".) If the Stellar ATM is from a trusted manufacturer and operator, it should be safe to use. Different Stellar ATMs have differing AML/KYC requirements.

  23. Can Stellar scale?

  24. Stellar has scaled to handle millions of transactions per month. Stellar is software, and it can evolve to scale - the code can be modified with better algorithms and the network then upgrades to the more advanced version. Stellar attempts to improve on Bitcoin to solve scaling issues, by processing transactions every few seconds instead of 10 minutes.

  25. Can Stellar be stolen?

  26. Anyone who knows the private key can move the coins from an address. If the private key is not known, it's not possible to spend the coins at an address. Stellar stored in the wallets of a centralized exchange can be stolen - it happens all the time. At a Non-custodial exchange like bitni.com, you are in charge of your wallet at all times.

  27. Can Stellar be hacked?

  28. If Stellar network could be hacked, it would have probably already happened. The ledger is decentralized across many independent nodes - the more nodes on the network, the higher the security. If any one node is compromised, it will not compromise the others. However, centralized Stellar exchanges are hacked all the time! That's why you need a non-custodial exchange like bitni.com.

  29. Where is Stellar stored? Where to store Stellar?

  30. The data of all Stellar transactions is stored in a public Ledger distributed as peer-to-peer shared files. Each node has a complete copy of all transactions ever made - the Stellar Ledger. So the transactions are stored in the cloud - not on a centralized server, but on many independent nodes. Each user's Stellar balance is also kept track of in their wallet.

  31. What is a Stellar wallet? How do Stellar wallets work?

  32. A Stellar wallet stores all of the user's Stellar addresses. The sum value of all of the addresses in a wallet is automatically added up - this is the total balance of a wallet. Centralized exchanges store the user's wallet, which is risky. Non-custodial exchanges like bitni.com do NOT store user's wallets, which is much safer.

  33. Who uses Stellar? Where is Stellar used?

  34. Millions of people everywhere in the world use Stellar for all the same things as any other money is used for - buying, selling, and donations - and the number of users is growing rapidly. Anyone needing to transfer wealth internationally, especially outside the grasp of authoritarian regimes, for ridiculously low cost, will find Stellar useful if they are not already using it. Stellar is also used as an investment and a hedge against inflation.

  35. Who accepts Stellar? Where is Stellar accepted?

  36. Many merchants, especially online, accept cryptocurrencies as payment. Charities like Wikipedia accept donations in crypto. Web Hosts and Domain registrars often accept crypto. Large brick and mortar stores are starting to accept crypto payment. Some local restaurants are also coming on board. bitni.com accepts Stellar to convert to other currencies, of course.

  37. Why is Stellar the future?

  38. The reason why a cryptocurrency is the future can be summed up in 3 words: Because it's better. Stellar is a huge improvement over fiat currency. It is also an improvement over precious metals - they can't be wired over the internet. If central banks continue destroying the value of fiat currencies, cryptocurrencies will become even more important to the future of money.

  39. Can Stellar crash? Will Stellar crash?

  40. If Stellar were going to crash to zero, it would have probably done it already. There have been wild price swings - because it's new and there's a lot of speculation, like the internet when it first came out. But there are wild price swings with other commodities like oil. Stellar's low after it's all-time high of almost a dollar is still several cents. For Stellar to crash to $0, demand would need to be zero or supply would need to be infinite - a highly unlikely scenerio.

  41. Is Stellar a good investment?

  42. The Original Bitcoin has gone from pennies to thousands and thousands of dollars in less than a decade, utterly blown away the stock market, even gold and other precious metals, and far outperformed pretty much any other investment. While Stellar has not reached Bitcoin's high, it has performed relatively well, going from a fraction of a penny to almost a dollar at it's high - a pretty good investment.

  43. Where to buy Stellar? How to get Stellar?

  44. Exchanges are where Stellar is bought and sold, however there are several types: Centralized Exchanges store the user's coins like a bank and require ID. Decentralized Exchanges (DEX) facilitate peer-to-peer buying and selling between users - and these can be done locally in-person or online. Non-Custodial exchanges like bitni.com are a quick and easy way of swapping cryptocurrencies without signing up.

  45. Can I buy Stellar without ID? Is there a way to get Stellar without SSN?

  46. Many Centralized exchanges have rigorous requirements for identification, such as uploading a scan of passport or other government documents. Decentralized exchanges usually have less stringent requirements for identification, especially if the transaction is in-person. Non-custodial exchange bitni.com does not require identification for crypto-to-crypto swaps. If you want Stellar without SSN, you've come to the right place.

  47. Can I get Stellar without KYC? Is it possible to buy Stellar without verification?

  48. KYC stands for Know Your Customer. Many regimes have become increasingly authoritarian towards cryptocurrency and seek to crack down on anonymous trading, by requiring the customer to upload documents proving their identity. Many exchanges have caved in to the pressure and now have KYC policies. Centralized exchanges almost always have KYC, some Decentralized exchanges do as well. bitni.com does not require KYC for crypto-to-crypto swaps.

  49. Is Stellar better than Gold or Precious Metals? Should I buy Gold or Stellar?

  50. Gold has been used as money for millenia. Stellar has been used as money for a few years. Gold has a proven track record as a relatively stable store of value. It has gone up and down over the years, but no severe crashes or jumps. Stellar on the other hand is unstable, can swing wildly in a day. Gold has been physically confiscated by governments in the past. Stellar is mathematically impossible to confiscate by anyone who does not know the private key.

  51. Is Stellar publicly traded? What are Stellar stocks? How does a Stellar ETF work?

  52. Most Stellar trading is done by buying and selling coins directly by individual investors. However, there are cryptocurrency funds listed on stock markets. A Cryptocurrency Exchange Traded Fund (ETF) holds assets in single cryptocurrencies or a basket of them. It may be more convenient to buy into one basket fund instead of manually managing dozens of different cryptos and their respective wallets. In the case of Stellar, it is probable some Cryptocurrency ETFs are holding it.

  53. Can Stellar reach 1? Can Stellar reach 10? Can Stellar reach 100?

  54. One, tens, or even hundreds for a Stellar coin may seem speculative, but Stellar's high is already almost a dollar. Stellar started out at practically nothing and rose in a parabolic curve to it's high hundreds of times higher than the starting price. 10 is only twelve times higher than the all time high. If the long term trend continues, Stellar could reach new highs orders of magnitude greater.

  55. How much time is a Stellar transaction? How long does Stellar take to transfer?

  56. A traditional blockchain cryptocurrency generates new blocks in time intervals, each new block connected to the previous. Each block holds a limited number of transactions, and a certain number of blocks must be connected for the transaction to be secure. Stellar is different, using a ledger maintained by trusted nodes instead of a fully decentralized peer-to-peer network. Because of this, Stellar's transaction time is only about 5 seconds.

  57. How many confirmations for a Stellar transaction?

  58. A traditional blockchain cryptocurrency can include a transaction on the latest block in the blockchain. However, in a totally decentralized system, a transaction is not irreversible until a certain number of blocks are added ahead of it on the blockchain, when the network has reached a consensus. Stellar transactions are irreversible from the start, because only trusted nodes are allowed to processes them. Thus, there is no "number of confirmations" to wait for - it is near instantaneous.

  59. How much is a Stellar transaction fee? How much does a Stellar transaction cost?

  60. A Stellar transaction fee is the cost of having transaction data included in the XLM ledger permanent record, which fluctuates under market supply and demand. The average Stellar fee is about a fraction of a penny. Lots of factors affect transaction fees, such as the cost of electricity, the hardware capacity of nodes, the number of simultaneous transactions competing to be included in the ledger.

  61. Is Stellar a blockchain? What is the Stellar blockchain? How does the Stellar blockchain work?

  62. Stellar transactions are records of balances moved amongst addresses. Blocks are groups of Stellar transactions for the purpose of easier verification and sharing accross the network. New blocks are generated at a fixed time interval of 5 seconds. Each block is connected to the one chronologically preceeding it by a cryptographic hash. Once a block has been verified, it is distibuted to the other nodes as a peer-to-peer shared file.

  63. What is a Stellar address? How do Stellar addresses work?

  64. A Stellar address is a sequence of characters associated with a balance of Stellar coins on the blockchain. Cryptographically, an address is just a Public Key, which is generated from a Private Key. Anyone with a Private Key can "sign" a transaction for a corresponding Public Key. Anyone with a Public Key can verify a signature. Signing a transaction approves a transfer of value at the current address to a different address.

  65. What is the Stellar network? How does the Stellar network work?

  66. The Stellar network is a connection of centrally approved nodes, which process transactions and record them on the blockchain. Nodes are running on servers distributed around the globe for speed and fault tolerance. Any node can process transactions into blocks, which are added to the final blockchain by consensus of the network as a whole. Voting is determined by Federated Byzantine Agreement, where each node chooses which other nodes to trust, making Stellar decentralized without proof-of-work.

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