Connect the world - How Stellar is connecting the global financial system
Jed McCaleb is the co-founder and Chief Architect of the Stellar Development Foundation, an open network working to connect the world’s financial infrastructure. In 2014, Jed created Stellar, an open-source blockchain network designed to democratize economic participation by making money more fluid, markets more open, and people more empowered.Why you should listen:
Jed's history is the story of crypto itself. An early pioneer of decentralized systems, he created eDonkey2000 one of the first file-sharing networks.
In July 2010, after reading about Bitcoin on Slashdot he became fascinated and founded the mtgox.com Bitcoin exchange.
"I wanted to get some Bitcoin and the only way you could do that at the time was to mine it or go on internet forums. So I started the Gox exchange so I could learn more about Bitcoin as a system, and buy bitcoins. It was something that was needed by the community at the time and I knew it could build it so I did. I didn't run it for very long before Mark Karpeles took over and everyone knows what happened after that.”
In 2011 McCaleb founded the crypto asset company Ripple and served as CTO until 2013. McCaleb then parted ways with Ripple but as part of a settlement, he was granted a large amount of XRP tokens. At the height of the January 2018 altcoin boom, McCaleb was briefly the 40th wealthiest person on the planet based on the value of his XRP tokens.
McCaleb founded Ripple and then Stellar to try and improve on the promise of Bitcoin. “Bitcoin is an awesome idea,” says McCaleb, “But software is iterative and can always be improved. One of the things that bothered me about Bitcoin is the mining aspect. There are literally billions of dollars spent on mining which is a shame. I thought if there is another way we can solve the consensus problem, then we should explore it. So with Ripple and now Stellar, this is a way to solve consensus without the proof-of-work mining process so transactions can be sent in a much cheaper, faster, more energy-efficient way."Key takeaway:
McCaleb says the current financial system is clunky and inefficient. “The problem with the way that money moves around the planet, is that the rails were built pre-internet so none of it was designed to interoperate. And the beauty of the internet is that with email, for example, it doesn't matter who runs your email server, they all speak the same language so you can seamlessly and instantly send an email to anyone in the world. There is really no reason why money can't work the same way. That’s what Stellar is, it is an interoperable payment protocol between payment networks.
McCaleb says that Stellar is intended to enhance rather than replace the existing financial system. Whereas, say, the Bitcoin network was made for trading only bitcoins, Stellar is a decentralized system that’s built for trading any kind of money in a transparent and efficient way. “Stellar is designed as an upgrade to the existing financial structure,” says McCaleb. “It will be a long time, if ever before everyone is using one cryptocurrency. So instead, the better route is to build something that makes the current system easier, cheaper, reduces friction, and enables value transfer between people that wasn't possible before. Once we connect these networks of information in a frictionless way that will allow people to build all these interesting things on top of the network. Once you can send 10 cents from the U.S. to Vietnam, with no problem, that's when innovation happens. Right now we're building the plumbing for everything to be built on top of.”Supporting links:
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