Jed McCaleb is a name that, for the last fifteen years, has become closely associated with cryptocurrency and blockchain. His creation of Ripple, Mt. Gox, and Stellar has marked his name among prominent tech, finance, and cryptocurrency communities.
McCaleb helped to launch multiple firms in the blockchain space, but perhaps his most well-known contributions are those he made to Ripple and Stellar.
Born in Arkansas, Jed McCaleb got his academic start at the University of California, Berkeley. He dropped out of university early and moved to New York City, where he would be exposed to various innovations in the tech world, focusing on software development instead.
He went on to create many platforms that operated on a P2P basis and had decentralization frameworks underpinning his tech contributions. In the early 2000s, McCaleb created eDonkey2000, a P2P file-sharing network alongside developer Sam Yagan. The hub for this platform was completely decentralized, as files were not stored on a central network but transmitted between individuals.
First interaction with crypto: Mt. Gox
Jed McCaleb’s first foray into crypto became visible when he created Mt. Gox. He purchased the domain name in 2007, later converting it in 2010 into a Bitcoin exchange, one of the first in the digital asset space, just as cryptocurrency was starting to take off. In 2011, Mt. Gox would end up being responsible for 70% of all bitcoin trading worldwide. He sold the company in the same year to French businessman Mark Karpeles. Unfortunately, Mt. Gox would go under in 2014.
Ripple: The bridge between finance and cryptocurrency
Jed McCaleb deepened his work in crypto by creating the Ripple protocol, a system by which people could send each other money. The Ripple protocol, in its formation, ended up being different from the concept of blockchain. It would not rely on mining to verify transactions on the blockchain. Instead, transactions were verified by consensus.
In 2012, a ledger was created with a circulating supply of 100 million XRP. Jed McCaleb formed a leadership team comprising Chris Larsen, David Schwartz, and Arthur Britto to head Opencoin, a company that managed the Ripple protocol and XRP currency.
The consensus mechanism for the XRP ledger was specialized to allow for high volumes of throughput transactions. This feature would create a crypto payment platform that allowed quick, low-cost, cross-border transactions. This made Ripple’s technology a perfect fit for banks and financial institutions that want to conduct large transactions in a quick and timely manner. Opencoin was later renamed to Ripple Labs.
Jed McCaleb exits from Ripple, moves on to Stellar
Jed McCaleb stayed on as CTO of Ripple until 2013, when the vision of how he wanted to run the company differed from the rest of the leadership team. McCaleb wanted to steer Ripple Labs towards being more financially inclusive and able to serve the unbanked. He suggested that the company give away XRP on Facebook, something that the board of directors rejected.
He left the company in 2013 and became co-founder of Stellar the next year, in 2014, and the Stellar Development Foundation as well. The Stellar Development Foundation was envisioned as a non-profit organization that would be more focused on giving payment services to people who didn’t have access to traditional banking.
McCaleb’s creation of the Ripple Protocol left him with billions in XRP tokens, which he started to sell after he exited the company. The programmer’s considerable holdings led to a deal being struck with Ripple Labs in 2014 that would limit the amount of XRP he could sell every year. This would allow McCaleb to liquidate some portion of his tokens without having too negative an impact on the price of XRP.
Some in the crypto community believed that McCaleb’s departure from the company was hostile and loaded with intentions to hurt Ripple Labs’ prospects. One notable instance that encapsulated this sentiment was XRP investor Jim Knox accusing McCaleb on X.
“He deliberately tried to harm Ripple investors just because he didn’t like how some discussions or votes turned out. It’s one thing to disagree or be upset about the team’s decisions but to go out of your way to hurt the community? That’s not the kind of person you can trust,” said Jim Knox.
“I didn’t do that at all. I told the ripple community I was leaving ripple and no longer believed in the project. I did that *before* I sold my XRP. The intent was to let people front run me. The alternative was to sell without telling people. Is that better? We also gave xrp holders the ability to swap into Stellar. the hope being they wouldn’t lose at all,” said Jed McCaleb in response to the accusation on X.
Legacy, philanthropy, and current projects
Jed McCaleb’s charitable contributions include donations to the Machine Intelligence Research Institute and OpenAI. His latest creation is an aerospace company called Vast, which he founded in 2021. McCaleb today is known as a programmer who has left an indelible mark on the world of cryptocurrency through his contributions to Ripple and Stellar.
