Frequently asked questions
The Stellar network was conceived as an open network for storing and moving money. It works by allowing participants to create and send digital surrogates of any currency that they like. This means, effectively, that all of the financial systems in the world can be brought together on the same network.
Lumens is the native currency of the stellar network. It’s used to incentivise the work necessary to make the network function. In the words of the developers, the Stellar network is too easy to use, which means that there needs to be some small barrier to entry to prevent the ledger from becoming clogged with spam.
Each account in the network must therefore have a minimum balance of one lumen, and a transaction fee of a small fraction of a lumen. This prevents bad behaviour from spambots, while still keeping things accessible for everyone else. Rather than using an existing currency, like the dollar, the lumen was created, just to keep things neutral and free from external control.
Lumen and XLM are the same thing — the latter being the ticker name for the former. Stellar is the blockchain protocol through which currencies of all kinds can be transferred, via the Lumen.
The Lumen exists to prevent the Stellar ledger from being filled with garbage data, like spam. It does this by introducing a tiny minimum fee to each transaction. Lumens is the currency for this fee, to prevent the network from being tied to a particular currency, and to prevent the network as a whole from being bound by ‘economic and political factors’.
Like all cryptocurrency, XLM can be broken down into very small values. In practice, it’s infinitely divisible — or rather, it’s as divisible as anyone could feasibly want it to be. In theory, it’s divisible into stroops. One stroop is one ten-millionth of a Lumen.
Broader trends in the crypto market will inevitably drag the price of XLM up and down. If Bitcoin, especially, experiences bearish or bullish spells, then you should expect to see that reflected in the price of Stellar Lumens.
You can buy lumens on exchanges, from brokers or individuals, or through the Stellar network. Having done so, you can store them on a hardware or software wallet.
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