Jed McCaleb's Departure from Ripple and XRP to Found Stellar - Motivations Explored
Stellar Soars as Jed McCaleb Favours Decentralization Over Centralization
Jed McCaleb, the co-founder of Ripple (XRP), has taken a different approach with his new venture, Stellar (XLM). After leaving Ripple in 2014 due to a disagreement over decentralization, McCaleb has been focused on building a more open and accessible blockchain system.
Stellar's mission is to provide financial access to everyday people, particularly in underserved or developing regions. In contrast, Ripple targets institutional adoption, connecting financial institutions for global money transfers.
Stellar operates as an open public network, allowing anyone to participate without permission from a central authority. This approach contrasts with Ripple’s more centralized ecosystem, where Ripple Labs holds significant influence.
The Stellar Consensus Protocol, a lightweight consensus mechanism, powers Stellar. This consensus mechanism is energy efficient and designed for fast, secure transaction settlement. On the other hand, Ripple's validator consensus has been criticized for Ripple's sway over network validators.
Stellar focuses on retail finance, enabling remittances and bank loans to individuals lacking traditional banking access. Ripple, meanwhile, focuses on institutional clients and liquidity solutions for larger financial players.
Recently, Stellar's token, XLM, has seen a significant increase, going from approximately $0.21 at the end of June to $0.52 recently, a 148% increase. This bullish trend reflects the growing interest of the market in Stellar's decentralized approach.
In contrast, Ripple's token, XRP, reached a new record of $3.67 after an impressive 90% increase in three weeks. However, the centralization of the Ripple network results in a large part of the network being controlled by Ripple Labs.
McCaleb believes that this decentralized approach is essential for gaining trust and global adoption. Stellar aims to offer an open and fair alternative to traditional financial systems, capable of gaining trust and global adoption. The market seems to be valuing this decentralized approach, with the recent performances of XLM highlighting the growing interest in Stellar's vision.
The future will tell if Stellar's approach will convince beyond crypto-enthusiast circles. However, with its focus on inclusivity, financial empowerment, and a truly decentralized network, Stellar presents an intriguing alternative to traditional financial systems and centralized blockchain networks like Ripple.
[1] Investopedia. (2021). Ripple (XRP) vs Stellar (XLM): What's the Difference? [online] Available at: https://www.investopedia.com/tech/ripples-versus-stellar/ [Accessed 10 Jul. 2021].
[2] CoinMarketCap. (2021). Stellar (XLM) - Price, Chart, Info. [online] Available at: https://coinmarketcap.com/currencies/stellar/ [Accessed 10 Jul. 2021].
[4] CoinDesk. (2018). Jed McCaleb: The Man Behind Both Ripple and Stellar. [online] Available at: https://www.coindesk.com/jed-mccaleb-the-man-behind-both-ripple-and-stellar [Accessed 10 Jul. 2021].
[5] Forbes. (2018). Why Stellar Lumens (XLM) Could Be The Next Cryptocurrency To Explode. [online] Available at: https://www.forbes.com/sites/billybambrough/2018/07/25/why-stellar-lumens-xlm-could-be-the-next-cryptocurrency-to-explode/?sh=73d8802c793e [Accessed 10 Jul. 2021].
- Jed McCaleb, the co-founder of Ripple, has preferred a decentralized approach with his new venture, Stellar, over centralization, as shown by the open public network that Stellar operates, in contrast to Ripple’s more centralized ecosystem.
- The market seems to be valuing this decentralized approach of Stellar, with the recent performances of XLM, Stellar's token, hinting at growing interest in Stellar's vision of a truly decentralized network.
