According to the co-founder of both Ripple and Stellar, Jed McCaleb, a cryptocurrency must be decentralized to succeed in the long run.
"The real vision is that you have a network, much like the internet, that anyone can participate in," McCaleb said last week on CNBC's 'Fast Money,' "There's not one central entity that can decide that it's going to start charging. This is the way this thing can actually grow and reach ubiquity. That's the key thing to make these things successful ... It's very hard to run nodes outside of Ripple Labs. The Ripple team is running the majority of the nodes, which should be concerning for people. What we're trying to build at Stellar is an internet-level protocol. It’s important that that be done by a nonprofit entity. If you imagine an internet created by a for-profit company, it would just be a very different world."
McCaleb has worked on both sides of the fence. He left Ripple in 2015 to form Stellar. At Ripple he worked on a centralized system similar to PayPal and SWIFT. At Stellar, McCaleb works on an internet-level protocol system that is not controlled by one centralized network.
McCaleb believes passionately that cryptocurrency blockchains must run on a decentralized network in order to grow into an effective alternative for everything from everyday purchases, cross-border remittance, fundraising, and stock market administration. Another key to a cryptocurrency's success, he says, is that it mimics the internet -- the investor base must be very large, it must be accessible without restrictions, and the coins must be spread very widely throughout economic sectors and classes of people.
Ripple and Stellar are the only two cryptocurrency blockchain technologies which are targeting banks and remittance platforms by offering cheap, fast cross-border transactions. Ripple's XRP is the third-largest cryptocurrency with a market cap of around $20 billion. Stellar's XLM 'Lumens' is in the top 10 largest cryptocurrencies with a market cap of around $4 billion.
Besides co-founding Ripple and Stellar, Jeb McCaleb also created the Mt. Gox bitcoin exchange, selling it in 2011.
By: BGN Editorial Staff