Transcripts

Jed McCaleb's Interview on Kevin Rose's Block Zero

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Kyle McCollom
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Jed McCaleb offered some exciting new insights and clarifications into Stellar's vision during an interview for Kevin Roses' Block Zero podcast. Below are the most interesting quotes from Jed.

On a global Venmo:

Ultimately, it would be cool if there was some global Venmo that was backed by the Stellar network where you would have different fiat balances and you could send it to anyone. We are working with some people that are going to make [a global Venmo].

Regarding the central banks of countries as anchors on the network:

There are a lot of countries around the world that are looking to tokenize their fiat. That serves as the ultimate anchor - who is actually issuing the token onto the network. That’s the best one - if you can have the central bank doing it, then the counterparty is the country which is what you want for fiat.

On the SDEX UI:

We are making a nice UI for [the SDEX]. The hope is that it will be as easy to use as Kraken or Poloniex or easier because those things are a little hard to use still. Rather than being a central exchange in the backend it will be the Stellar exchange in the backend.

With regards to the speed of the SDEX:

Because we built this trading in as a primitive, it’s always going to be more efficient and easier than doing it on something like Ethereum where they have to build it through scripting. It’s going to be more efficient because it is part of the protocol. For a decentralized system, I would be shocked if it isn’t the fastest one.

Creating a standard payment protocol:

We really want to get the network to the state where it does become the standard for the way you send money around the world just in the same way that SMTP is the standard for sending messages.

Speaking about the differences between Stellar and Ripple:

At a philosophical level, we set up SDF as a nonprofit because, like the Internet, I think it needs to be [as] open and neutral as possible. If you imagine the Internet created by a for profit company, it just would be a very different world. I don’t think it really would have worked. The same is true here. People need to think that this thing isn’t controlled by a central entity and that they won’t pivot or change their business model. I think the governance is a huge important piece, which I don’t think we had gotten right with Ripple.

Speaking to the difference between Ripple’s and Stellar’s approach to driving adoption:

I think we are very bottoms up. I think it is going to be a long time before big banks actually adopt this kind of stuff. They all do pilots on it all day and explore it, but going from pilot into production is a whole other thing. Banks themselves will tell you that it’s years and years before we will ever do this. I don’t think they ever will until they see it working somewhere else in the world. They are too risk averse, and maybe rightfully so. Incumbents are never going to be the first movers here. We don’t focus on banks very much at all. We mainly focus on remittance companies and other money transfer companies.

Regarding PoW vs SCP:

Proof of work won’t work for what we are trying to do with Stellar. In Stellar, there’s other assets - there’s dollars and euros and these kinds of things. We also have something equivalent to Bitcoin called a Lumen - say it’s market cap is a billion dollars but there’s a trillion dollars worth of dollars and euros in the network. Proof of work only takes into account the native asset. It doesn’t take into account these tokenized assets. So it could actually be worthwhile for someone to do the 51% attack even though it is expensive in the native currency terms because they are making a trillion dollars.

On verifying that an anchor has the underlying asset they issue:

Who the institutions are that are backing these assets is important. You would rather have a Chase Bank dollar than a Mt Gox dollar. It’s the same in the world today: when you use PayPal, you don’t have a dollar - you have a PayPal dollar. How do you know PayPal actually has a dollar? You use institutions that are actually licensed and regulated; that have real bank accounts.

Speaking to big banks and IBM:

We don’t spend much time focusing on large banks. Our IBM partnership is pretty perfect for us because they do and they have relationship with pretty much every bank on the planet. They need some cross border payment solution for these banks so they are working with them to integrate Stellar. They are trying to bring a consortium of these banks together, and not just banks but central banks.

On Bitcoin vs Stellar:

Unlike Bitcoin, it is much lighter weight to run a Stellar node. It’s more like running a mail server or a DNS server. What you want to maintain is the optionality - if something starts to go wrong, people can route around it. It’s easy to spin up your own node even if you’re not running one now. It’s a check on what could go wrong.
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