Jed McCaleb is no stranger in the crypto world: co-founder of Ripple and creator of XRP, he left to establish Stellar due to fundamental differences in decentralization views. Discover McCaleb's criticisms of Ripple and why Stellar embodies his decentralized philosophy. Full story here.
Jed McCaleb, co-founder of both Ripple (XRP) and Stellar (XLM), recently explained in an interview with CNBC the reasons that drove him to leave Ripple to create Stellar. His goal was to build an “internet-level protocol” managed by a non-profit organization, offering a more decentralized alternative to traditional payment networks.
According to McCaleb, the centralized management of the Ripple network is problematic. His ambition was to create an open payment system accessible to all, like the internet. But Ripple presents aspects that are too centralized in his view.
Indeed, Ripple’s consensus mechanism makes it very difficult for third parties to host nodes on the network. This results in a large portion of the network being controlled by Ripple Labs, thus creating a centralized system that more closely resembles traditional financial networks like SWIFT or PayPal.
For its part, Stellar focuses on decentralization. McCaleb emphasizes the importance of widespread participation and broad distribution of the native currency (XLM). The goal is to avoid the concentration of power in the hands of a single entity and to provide space for multiple independent actors within the network.
According to McCaleb, this decentralized approach is essential to gain trust and adoption on a global scale, similar to what the internet has managed to accomplish. Conversely, centralized control hinders the global adoption of a blockchain.
The tokens of both platforms are currently experiencing strong growth. XRP recently reached a new record of $3.67, after an impressive increase of 90% in three weeks. Meanwhile, XLM has significantly increased, rising from about $0.21 at the end of June to $0.52 recently, representing a 148% increase. This bullish trend underscores the growing market interest in the respective uses of these two cryptocurrencies. It reflects the strategic differences between Ripple and Stellar.
By leaving Ripple to found Stellar, Jed McCaleb clearly chose a more decentralized vision for payment networks. While Ripple seems to more closely resemble traditional financial systems, Stellar aims to offer an open and fair alternative, capable according to McCaleb of gaining trust and adoption on a global scale.
With the recent performances of XRP and XLM, the market seems to place importance on these strategic differences. The future will tell if Stellar’s approach can convince beyond crypto-enthusiast circles.
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