JERSEY CITY, New Jersey – Jed McCaleb is the co-founder and Chief Technology Officer of the network system, Stellar.
He recently spoke to Michael Terpin, the founder and conference director of CoinAgenda 2019.
The event, which the Transform Group hosted, featured the Mount Gox founder and Ripple co-founder sharing his insights regarding his journey in the cryptocurrency industry.
Stellar Pioneer’s Journey to Discovering Bitcoin
McCaleb initially talked about his discovery of Bitcoin.
He informed Terpin that he merely appreciate working on objects that he finds fascinating and can alter the world for the better.
According to the report posted online by Forbes, an international media company that delivers the latest information on business, finance, entertainment, investing, leadership, technology, lifestyle, and entrepreneurship, McCaleb initially worked on eDonkey.
This peer-to-peer application is a decentralized, server-based file-sharing network meant for massive files. After this occupation, McCaleb said that he browsed the Internet.
Then, he accidentally encountered a white paper about Bitcoin on Slashdot, a social news Internet portal which initially labeled itself as a dispenser of news for geeks.
The San Francisco, California-based computer programmer and businessman exclaimed that he was quite thrilled.
It is because, before reading the authoritative report on Bitcoin, he cited that he did not think that it was probable to resolve the double-spend dilemma.
Approximately two weeks later, McCaleb established the Mount Gox Bitcoin Exchange.
On Managing the Mount Gox Bitcoin Exchange
McCaleb founded the Mount Gox Bitcoin Exchange in 2010. The headquarters of his company was in Shibuya, a major business and commercial hub in Tokyo, Japan.
McCaleb relayed that during that time, a proper technique to purchase or sell Bitcoin has not been devised yet.
He added that he set up the Mount Gox Bitcoin Exchange because he desired to experiment with Bitcoin and to learn more about it as a technological system.
The computer programmer and software developer affirmed that he found his new endeavor then as quite interesting for himself.
He also mentioned that he decided to create a Bitcoin application to understand the virtual asset’s technology better.
He later considered the Mount Gox Bitcoin Exchange as his hobby and realized that people started to utilize it.
Stellar Co-Founder’s Decision to Give up Running Mount Gox
After engaging with his cryptocurrency exchange occupation for quite some time, McCaleb realized that he was uninterested in managing the Mount Gox Bitcoin Exchange for the long haul.
He thought about finding someone to replace him as its administrator. The digital currency enthusiast shared that there was a time when he took part in BitcoinTalk.
He described this gathering as an event involving participants who were aware of Bitcoin and possessed an account.
McCaleb said that, during that time, the Bitcoin world was quite different from what it is at present.
At BitcoinTalk, he cited that he initially saw roughly 2,000 participants. Then, he later found out that this population of Bitcoin aficionados ballooned to 5,000 to 10,000 people.
McCaleb remarked that he encountered Mark Karpeles on that occasion.
Karpeles was reportedly a potential replacement who McCaleb considered to manage the Mount Gox Bitcoin Exchange.
He remarked that Karpeles appeared like he could handle the responsibility. However, McCaleb later concluded that he found his likely successor as inept.
On His Thoughts about Bitcoin Mining and Its Consensus Dilemma
McCaleb always thought about Bitcoin being a fantastic idea. Nonetheless, the Stellar co-founder remarked that the mining aspect of the cryptocurrency has always disturbed him.
He pointed out that, if a person could resolve the consensus algorithm without mining, then that would, apparently, be a better scenario.
McCaleb reasoned that it is because people spend billions of dollars on mining.
He cited that plenty of individuals do not realize how mining is such a massive drain on the economy of Bitcoin.
The technology businessman explained that it is principally because all the money has to flow out yearly to remunerate the people who perform the mining and to pay for electricity.
McCaleb affirmed that such a situation is, indeed, a considerable drag on the system, aside from the environmental issues it entails.
Techpreneur’s Fervent Admiration of Bitcoin
McCaleb went on to discuss to Terpin about how he found Bitcoin as magnificent.
Before Bitcoin, McCaleb said that he thought that there was no solution to the consensus challenge the cryptocurrency was set out to resolve.
He said that Bitcoin inspired him, just like it did with other virtual currency enthusiasts.
It made him begin contemplating the other methods on how to address the consensus dilemma, which is genuinely what Bitcoin mining was about, he cited.
Besides, McCaleb shared that he came up with the idea that led to the founding of Ripple, which he is a founder, and served as its Chief Technology Officer until 2013.
The computer programming specialist pointed out that, along the way, he and his team realized that there are plenty of other things people can do with a network, and not just a virtual token.
He said that it occurred to him that people could perform things like representing other types of value in the form of virtual fiat money, as what decentralized exchanges and stablecoins have demonstrated.
McCaleb expressed his deep appreciation of Bitcoin for being obviously and immensely decentralized.
Plus, he remarked that he also liked the fact that there is no central firm driving the cryptocurrency forward.
McCaleb described such attributes as to be what makes Bitcoin a genuinely extraordinary cryptocurrency prototype.
However, he mentioned that the virtual token is quite challenging to reproduce. He went on to describe that there is a middle ground between that aspect.
Furthermore, he said that it is similar to a completely decentralized Uber transportation service, in which there is an establishment that is assisting in getting the network started.
McCaleb said that Bitcoin makes a person think, and allows people to carry on working on the cryptocurrency until it achieves a particular stage of development.
Technopreneur’s Thoughts about Stellar and its Future
McCaleb does not consider himself as a disruptor, but he said that he finds himself drawn to things that upset the status quo.
The founder of Mount Gox Bitcoin Exchange and co-founder of Ripple launched Stellar, a network system in 2014.
This value-transfer network targets to become a faster and more affordable platform to send money.
McCaleb narrated that he raised funds to establish a team that led him to fundraising efforts, with PayPal and Stripe’s executives helping him.
He performed this measure instead of relying entirely on an open-source community. Terpin acknowledged that Stellar is among the most winning projects at building a community.
During his thirty-minute conversation with McCaleb, they dealt on the subject of airdrops, a frequently employed strategy in the blockchain sector, to disseminate digital token to people.
In spite of the aggressive airdrop strategy of Stellar, McCaleb affirmed that they had retreated lately from this measure.
Furthermore, the co-founder and Chief Technology Officer of the open-source, decentralized protocol for virtual currency to fiat money transfers admitted that Stellar and the entire industry has yet to overcome the challenge of making network effect.
He explained that this is among the dilemmas of cryptocurrency in general.
McCaleb pointed out that he does not think that any projects have indeed performed the making of a network effect yet, especially for payments.
He said that both sides of it are necessary.
He also explained that this reality of creating a network effect is the reason why some aspects of the cryptocurrency industry are not found useful as of the moment.
McCaleb relayed that this is one of the grounds why people were interested in cryptocurrencies, though they are not employed around the world.
It is due to the lack of a massive network between cryptocurrency holders and people who are accepting these digital tokens, he pointed out.
He confirmed that this matter is a difficult problem to address.
Terpin queried McCaleb if Stellar, which relished plenty of early supporters, had any intentions of setting up an independent fund, similar to the EOS Blockchain Venture Capital Company, NEO’s New Economic Entrepreneur’s Fund, and Cardano’s EMURGO Fund.
The interviewee answered that, at this time, they do not have any of those plans yet.
McCaleb confirmed that they had bestowed grants to various firms, though they were never for operations.
At this point, he said that they are debating internally whether they should have an independent fund.
McCaleb said they might set up their own, but in a way that is not similar to the other cryptocurrency exchanges.