SAN FRANCISCO, California — December 2, Stellar Executive Director Joyce Kim, Stripe CTO Greg Brockman, and Stellar Lead Developer Jed McCaleb sat on a panel and gave an overview of the Stellar project to the audience at The Future of Money and Technology Summit, a yearly fintech conference that meets to discuss the evolution of money. The panel was called “Stellar: Building a Common Financial Platform”, and the entire session was streamed live and published on YouTube courtesy of Bitcoin Magazine.
“The goal of the [Stellar] platform is to be a ubiquitous layer so Stripe, Western Union, or a bank can plug into it. It’s to be kind of like an IP layer for payments, or the equivalent of SMTP for email. It doesn’t matter who your email provider is, they can all interoperate and talk to each other. Stellar is a similar thing, it doesn’t matter who your payments provider is — it gives them all a common language so that you can speak to any of them.” — Jed McCaleb
Stellar is a gateway based network and a hard fork of Ripple. Like Ripple, the Stellar protocol enables transactions in any currency pair for which gateways and market makers exist. For example, Alice can send 10 bitcoins to a gateway, the gateway will issue Alice a 10 bitcoin IOU on Stellar, and Alice can then choose to send 10 bitcoins worth of US dollars to Bob. Stellar will connect Alice to a market maker that accepts bitcoins and sells dollars, automatically execute the transaction, and deliver 10 bitcoins worth of USD to Bob. The effect is that Alice and Bob can use Stellar to instantly and globally transact in any currency pair.
“Stellar as a protocol is designed to allow bitcoin to move faster, and to allow bitcoin to be more accessible to more people.” — Joyce Kim.
The Stellar Foundation’s distribution strategy is notably different from Ripple Labs’s. On one hand, Ripple Labs plans to distribute ripples to six categories: users, developers, merchants, gateways, market makers, and Ripple Labs. Further details are unknown, and according to Ripple Labs’s website, “[Ripple Labs] will engage in distribution strategies that we expect will result in a stable or strengthening XRP exchange rate against other currencies.” On the other hand, the Stellar Foundation’s distribution strategy is to distribute 100 billion stellars by giving out 50% to the world via the direct signup educational program that requires Facebook user authentication, 25% to nonprofits to reach underserved populations via the increased access program whose details are yet to be announced, 20% to the bitcoin program, and 5% to the Foundation for operational costs. The bitcoin program is designed to distribute stellars to holders of bitcoin and ripples according to their stake in the respective cryptocurrencies. The foundation will take a snapshot of the Bitcoin blockchain and Ripple ledger, and set up a claim page were users can claim and receive their proportional share of stellars. The bitcoin program will distribute 19% of stellars to bitcoin holders, and 1% to ripple holders.
“I read a lot of studies about how financial access plays out in [the] developing world and in communities where there is not a lot of financial services to begin with, and what these studies have shown is that financial access is never enough alone to cause adoption— it has to be paired quite closely with education. For the entire digital currency space to move forward, and for financial access to reach that next level, there has to be an organization that is focused entirely on education of consumers, companies, government officials, and whoever the case may be on how these things work — the pros and cons, and being a non profit allows us to focus on that quite heavily as we move forward.” — Joyce Kim
According to Stripe CTO Greg Brockman, the non-profit nature of the Stellar Foundation was attractive and influenced Stripe’s decision in July to give 3 million dollars to the Foundation in exchange for 2% of stellars.
“Stripe’s formal involvement is that we gave 3 million dollars in exchange for 2% of the stellars, … and one of the things we’re doing is we’re auctioning off half of our stake. The goal there is to get significant chunks of stellars into other companies hands.” — Stripe CTO Greg Brockman.
Tell us what you think about Stellar and Stripe’s announcements below.
Photo Source: TechCrunch Online.