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Jed McCaleb, co-founder of Ripple and the creator of Mt. The Gox exchange before selling it in 2011, says that a decentralized network is needed for a cryptocurrency to succeed in the long run. That's why he separated from Ripple to form Stellar in 2014.
A centralized financial payment system will not be any better than PayPal or Swift, he told CNBC's Fast Money program on Friday. He said that decentralization provides the path to network growth and ubiquity.
Ripple is centralized
McCaleb said that it is very difficult to run nodes outside of Ripple Labs, and the fact that the Ripple team manages most nodes should involve people.
McCaleb, who is Stellar's chief technology officer, said Stellar is an Internet-level protocol. He said the protocol should be done by a non-profit entity, and noted that if the Internet had been created by a for-profit company, it would be very different today.
Stellar succeeded in part because she did not limit her investor base to just a few participants. He said that the underlying piece had been distributed very widely.
Stellar coins, known as lumens and XLM, ranked among the 10 largest market capitalization cryptocurrencies at the beginning of the year, although the currency has since declined about 34% on the year.
Stellar's settlement is five seconds or less, which is much faster than bitcoin, he noted.
Also read: How stellar lumens soared to the first ten cryptocurrences
Blockchain and crypto to change banks
Cryptocurrency and blockchain technology will change banks in the future by generating a public registry everyone can see that can not be changed at random, McCaleb told CNBC last week.
Over the next 10 years, most assets, including those that are not cryptographic assets, will be digitized, he added. Over the next 10 years, McCaleb has predicted that most assets, even non-crypto assets, will become digitized.
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