Why Did Jed McCaleb Create The Cryptocurrency Stellar?

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Jed McCaleb is all for productivity as long as it achieves the right goal. He gets frustrated by poor planning, inefficiency, and failure to leverage modern technology. He laments the state of the world’s financial infrastructure. He’s bothered by the number of people around the globe who sorely lack resources.

The Purpose Of Stellar

For all of these reasons, Jed McCaleb helped created Stellar. He is currently in charge of technical development as the CTO.

Stellar is a nonprofit, universal network that uses open-source software to promote financial literacy. Open-source platforms are easily accessible. They encourage transparency, accountability, free exchange of ideas, collaboration and community-oriented development. With Stellar, the idea is to connect silo financial entities, payment systems and people around the globe. The system is designed to move money quickly and affordably. If everything goes McCaleb’s way, it will positively impact the estimated 2.5 billion adults worldwide who don’t have bank accounts.

Because they lack technology or can’t afford the maintenance costs of serving underprivileged people, banks in developing countries must charge exorbitant fees. That prevents the poor from saving, conducting business, transferring funds to family members and even having a say in their communities.

McCaleb is also the inventor of eDonkey, a popular file-sharing network, and Mt. Gox, the bitcoin exchange that once handled 70 percent of transactions worldwide. It was his fascination with bitcoins that gave him the idea for Stellar. He saw the potential of bitcoin technology, a distributed database, to forever change the way the world banks. If it becomes cheaper and more efficient to move money around, financial participation will grow by leaps and bounds.

Many businesses and nonprofits have already jumped on board since Stellar launched in 2014. The Praekelt Foundation in South Africa, for example, has integrated Stellar into its open-source messaging app. Airtime credits are used as mobile money in developing countries, and Stellar makes it possible for young girls to save up credits.

Jed McCaleb also acts as an adviser to Machine Intelligence Research Institute, a nonprofit organization that works to ensure safe operations of artificial intelligence software. AI is a trend that gets McCaleb especially excited. He looks forward to seeing how it will evolve over the next few decades to change people’s lives for the better. “We haven’t seen that degree of change from technological advancement since the agricultural revolution,” he says.

What does a typical day look like for the entrepreneur? McCaleb says that he operates in one of two modes: focused or reactive. When he’s focused, he codes and builds. When he’s reactive, he’s making calls, answering emails, responding to questions and meeting with his team members. He keeps a good working balance between management and technical development by assigning projects to small teams.

McCaleb favors Google Docs for the wide accessibility that invites collaboration. Stack Overflow is his preferred question-and-answer site for programming. He recommends both for their high functionality.

He has taught himself to be forward-thinking and live in the moment all at the same time. He never loses sight of the big picture and ultimate goal, but when he’s building something, he stays focused on taking one essential step at a time. It has to be a step in the right direction; McCaleb never lets himself get sidetracked. He never deviates from the original plan unless the plan itself is flawed and needs to be reconsidered.

Jed McCaleb says he’s not a fan of niche products. He’d much rather make a global impact than creating products for a narrow market. The bigger the project, the more enthusiastic he is. He’d also rather build things than market them. The internet, in McCaleb’s opinion, practically takes care of marketing without any help from him. That frees him up to keep churning out products that fill widespread needs.

McCaleb is the first to say that he’s made many mistakes and would do a number of things differently. When he looks back on disappointing projects, he does what he calls a post-mortem. That’s an honest evaluation of the decisions he made given the information available to him at the time. However, he doesn’t beat himself up over poor results. There were times when he made great decisions, but things went wrong anyway.

Like most entrepreneurs, McCaleb sees failure as nothing more than an added incentive to keep trying. Almost nothing gets him down or holds him back.

When he talks about black swans, and he frequently does, he’s referring to Nassim Nicholas Taleb’s New York Times best-seller “The Black Swan: The Impact of the Highly Improbable.” A black swan is any improbable event, either positive or negative, that has far-reaching consequences. McCaleb urges anyone thinking of starting up a business to read it.

The premise is that certain business activities, rather than falling within the bell curve, are more subject to the aftereffects of random events. McCaleb points to the 2008 economic collapse as an example. He also cites the high number of startups that fail even with the strong backing of venture capitalists.

Traditional businesses that do fall within the bell curve, such as hair salons, gyms or independent bookstores, are much safer. However, they don’t have the potential to make an enormous, positive impact on people’s lives.

Stellar, remember, was created to combat global poverty. It is structured to function at its full potential. McCaleb won’t be surprised in the least if it changes the world forever.

He advises entrepreneurs to think about their own risk tolerance before starting any new business. If they like thinking on a grand scale, as he does, their businesses should be designed to harness and utilize every product’s potential for good.

Get connected with Jed McCaleb on Angel.co

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