Cryptocurrency needs decentralized blockchain technology to flourish, said Ripple co-founder Jed McCaleb. He mentioned that a successful long-term prospect of the currencies cannot exist with centralized networks. If cryptos are centralized, a system “that is no better than SWIFT or PayPal” will rise.
In a recent CNBC interview, he said, “The real vision is that you have a network, much like the internet, that anyone can participate in. 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.”
In his previews interviews, he suggested that cryptocurrencies will create a Universal Payments System that will operate on public ledgers that can no one can change or manipulate. He said that Stellar is working on creating this public ledger that is not held by any centralized agency, creating a transparent system for everyone to work on.
The difference between Ripple and Stellar
Ripple and Stellar are both co-founded by McCaleb. Ripple has now become the third-largest coin in the world by market capitalization but McCaleb left the team in 2014 due to differences in belief systems. He then went on to co-found Stellar in 2014. On his departure from Ripple, he mentioned, “It’s very hard to run nodes outside of … Ripple Labs,” McCaleb said of ripple coins. “[The Ripple team is] running the majority of the nodes, which should be concerning for people.”
He suggests that the only decentralized network that has become successful till date is the internet. He had already founded Mt. Gox, a popular Bitcoin exchange that he sold in 2011. He is also the CTO of Stellar. On his project, he said, “What we’re trying to build at Stellar is an internet-level protocol. That’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 also suggested that in the next 10 years, even non-digitized assets will be linked to blockchains in at least one way. He also noted that distributing the underlying coin widely, like the Stellar Lumens (XLM) could help in creating this future.
Ripple has been criticized in the past by several cryptocurrency enthusiasts who believe that there should not be a centralized system governing the cryptocurrency space. Ripple is being touted as a cryptocurrency designed for banks. However, this hasn’t stopped the currency from being one of the top coins in the world by market capitalization. In December, when the coin reached an all-time high, it briefly made its founder the richest man in the world.
Stellar on the other hand, was one of the top 10 coins in the market by December 2017 but shaved off gains quickly in 2018. The currency boasts of a transaction time of less than 5 seconds and helps in quick trade of fiat currencies as well. A research from Autonomous Next has suggested that the ICOs have raised more than $9 billion for the project.