During CoinAgenda at Las Vegas Blockchain Week 2019, Michael Terpin and Jed McCaleb chatted fireside about the state of Stellar, a value-transfer network that strives to be a faster and cheaper way to send money.
During the discussion, Mr. Terpin, who leads the Transform Group, took us first back to the late nineties, when McCaleb worked on his first peer-to-peer project, eDonkey, a decentralized, server-based, peer-to-peer file sharing network for large files.
“I think I started working on it in 1998 or 1999,” said McCaleb. “It was interesting to me, because it democratized access to information and allowed people to publish and consume stuff from all over the world. That aspect of it was super interesting to me, that you could run around the centralized publishers. Its cool working on such a peer-to-peer system, because its very organic. You are not just working on this one isolated piece of software, but it’s how this piece of software interacts with all of the other nodes out there.”
Later, as he browsed the internet, McCaleb came across the Bitcoin white paper. He started the Mt. Gox exchange, ultimately selling it to Mark Karpeles, who, he admits, turned out to be “incompetent.”
After Mt. Gox, McCaleb turned his attention to Stellar. Mr. Terpin asked if McCaleb came up with the Stellar structure –– both a corporation and decentralized and open-source cryptocurrency company. Stellar wanted to build a team.
“We have something for profit and we also have something to work with banks, institutions, etc. and something that really plays along the lines of decentralization and having a courtesy to be used anywhere without permission in the world,” he said.
McCaleb left Ripple to pursue a different project, and, about a year later, he felt there was still a huge opportunity and need for this universal payment network. “Stellar is a way to link any kind of financial institution, whether it’s a bank or mobile money together, whether using one currency or, if you’re holding dollars and want to send someone pesos, this should work a lot more similar to email.”
When you use email, there’s no problem sending an email from Gmail to Yahoo email servers, McCaleb pointed out. “It all just works. It is the same underlying protocol and money is not that way at all. And so, it’s very clear to me that there needs to be some universal system like this. And that was sort of the idea behind Ripple, but I didn’t feel like it was being executed in the right way. Stellar was to kind of to do it the way I imagined. You want this thing to be as open and neutral as possible and spread as widely as we can.” Stellar focused on making the technology useful for people, McCaleb said.
“A lot of people that have been in this space for years are a little bit disappointed on the lack of update by people just in actions and stuff,” said McCaleb. “There’s a lot of interest in the world, and a lot of speculation, and a lot of people that are excited about it, but to the extent that something is actually affecting people’s lives is actually pretty low, especially given how much interest there is. And, so, all along our goal has been how do we solve that? How do we get people using this technology? That mission and focus needs to not be overhyped and we need to not do a lot of vaporous stuff. That means companies like Franklin Templeton or IBM and these folks to actually realize that what we’re building is a solid thing and want to build on it.”
McCaleb hopes blockchain will democratize information. “This will do for economic activity, which will improve everybody’s lives,” he said. “But, the people that are most, the current system to me it is important that this is done right, and done in this kind of open way, because this technology like the internet, there’s a lot of potential for abuse. If the Chinese government is making like the new financial infrastructure of the world that would have been a pretty bad situation.”
What’s being built on Stellar?
“One of the things we’ve realized is Stellar is a platform,” said McCaleb. “For the first years in our lives, we were trying to get other people to build on it. But, as a new platform––this is true across technology, not just in the crypto space–-it’s very hard to get people to build on your platform. They’re never as motivated or never as interested or understand it as well as you do. So, we’re building the first real world use case on the platform.” That’s would be a mobile wallet –– “a global Venmo.”
McCaleb mentions other platforms being built on Stellar, such as a money market fund ––essentially a stablecoin––that bears interest. RoyaltyBits is an app for the tokenization of real estate, where users can buy shares of the world.
When asked by Terpin, McCaleb says it’s hard to know if he will still be with Stellar in five years, but his intention is to remain with the project. “We are definitely not done,” he said. “I don’t want to [stop working on] Stellar until it’s done. Things are going really, really well right now. The team is awesome and I’m super excited about this mobile wallet thing that’s gonna come out in January. So, the world surprises you but we’ll see –– until it’s either done or dead I won’t be gone.”