Jed McCaleb, the co-founder of Ripple said that cryptocurrencies and the underlying blockchain technology require a decentralised network in order to become successful in the long term.
McCaleb said that the use of a centralised financial payment network would lead to “a system that is no better than SWIFT or PayPal.”
On an interview on CNBC’s “Fast Money” on Friday, McCaleb stated: “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.”
He stated:”That’s the key thing to make these things successful.”
McCaleb is the co-founder of Ripple. The ripple currency is the third-largest digital coin in terms of market cap. However, McCaleb split off from the Ripple team to produce Stellar in 2014 due to contradictory beliefs in how the system of the cryptocurrency should be run.
McCaleb said regarding ripple coins: “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.”
McCaleb also created the Mt. Gox bitcoin exchange and then sold it way back in 2011. He said that the only other successful decentralised network that he has seen is the internet.
McCaleb is the chief technology officer of Stellar. 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 said that another key to the success of Stellar is not to restrict the investor base to only a few participants.
He said: “One of the things we’re doing at Stellar is distributing the underlying coin very widely.”
The XLM coins of Stellar, known as lumens, were among the ten largest cryptocurrencies in terms of market capitalisation earlier in 2018. However, the currency has dropped by about 34 percent so far this year.
McCaleb said that the transaction settlement times of the coin are 5 seconds or less, a fraction of the time required by bitcoin.
Earlier this week, McCaleb informed CNBC that cryptocurrency and the underlying blockchain technology would alter the way that banking takes place in the future by designing a public ledger that everybody can see — however, that cannot be changed at random.
McCaleb predicted that most assets, even the non-crypto assets, will become digitised within the next ten years.