Little is known about his private life but anyone passionate about the crypto world will have at least once heard his name or knows one of his companies/projects. But if you still don’t know him don’t worry as today you will learn who Jed McCaleb is, why he is one of the most famous people in the blockchain and crypto ecosystem and what contributions he has made to this world.
Jed McCaleb is an American programmer and entrepreneur who was involved in founding several technology companies over the years. In the crypto space he is known as the founder of 2 notable blockchain companies Ripple and Stellar.
Jed was born in 1975 in Fayetteville and spent his formative years in Arkansas. He briefly attended the University of California at Berkeley which he dropped out while still in his freshman year to begin his career as an entrepreneur in the technology sector.
Prior to his foray into the blockchain ecosystem, Jed had built technology companies, however, cryptocurrency was always his strong point and he has proven this throughout his years in the technology industry.
Jed wanted to leverage technology to reduce inefficiency and improve the human condition.
For this reason, in 2000, he founded, together with Sam Yagan, eDonkey (also called eDonkey2000 or eD2K network), a P2P file-sharing company very similar to Napster, which, at that time, was already starting to experience operational difficulties.
eDonkey allowed large files to be shared between users thanks to a decentralized network architecture that allowed sharing directly between users, without hosting them on a central server.
By 2004, eD2K, with up to 200 servers, had become the most popular file-sharing network on the web and was handling an average of nearly 2 billion files shared by approximately 3 million users.
In 2006, the RIAA sued MetaMachine Inc. the company responsible for developing and running the eD2K client program for alleged copyright infringement due to the unauthorized sharing of licensed music on the eDonkey Service.
The company had to discontinue distribution of eDonkey and this marked its decline and Jed’s departure from the project, before the era of Torrent and advanced P2P file sharing protocols began.
When in 2009 Satoshi Nakamoto launched Bitcoin, Jed was attracted by the project and the technology behind the first cryptocurrency in history and began to explore the technology in detail until he founded Mt.Gox.
Jed began to believe that the community needed an exchange service to trade bitcoin and in July 2010 he founded Mt.Gox, the first bitcoin exchange based in Tokyo (Japan) that handled more than 70% of all transactions worldwide, becoming the largest bitcoin exchange in the world.
Mt. Gox stands for “Magic: The Gathering Online Exchange”, which was the name of a fantasy card trading service that Jed had created some time ago. Being the owner of the domain, he decided to use it to launch a Bitcoin exchange service.
In 2011 Jed sold the company to Mark Karpelès and remained a minority partner.
In 2014, after Mt. Gox’s website was hacked, resulting in the theft of approximately 850,000 bitcoins belonging to customers, it declared creditor bankruptcy and closed its doors.
In 2011, during the Mt. Gox venture, Jed McCaleb began to study Bitcoin technology in depth and some of the major flaws in the system prompted him to create a cryptocurrency that was immune to Bitcoin’s inherent flaws.
So it was that, together with David Schwartz, Jesse Powell and Arthur Britto, Jed developed Ripple (originally called Opencoin), a digital currency in which transactions were verified using the Proof of Stake algorithm instead of the consensus algorithm used in Bitcoin (Proof of Work).
OpenCoin soon became Ripple, under the aegis of Ripple Labs, and with Chris Larsen at the head, was able to establish useful banking relationships and was adopted by a growing number of financial institutions to offer an alternative remittance option to consumers thanks to near-instant and inexpensive transactions.
Ripple Labs created its own decentralized cryptocurrency known as Ripple (XRP), which is currently the seventh largest coin (with a market capitalization over USD $19 billion at the time of writing).
After several disagreements in 2013, Jed left the company and his exit was conditioned based on a consensus where McCaleb for 7 years could trade limited amounts of XRP to avoid harming the digital currency market and, he was allowed to sell one billion XRP in the sixth year of the agreement and two billion XRP in the seventh.
A year after leaving Ripple Labs, Jed McCaleb returned with a new project related to the world of cryptocurrencies. It is Stellar Development Foundation, the non-profit organization whose goal was to develop the open source Stellar protocol to increase economic participation of all people and which would soon become Ripple’s direct competitor.
The Stellar project features a decentralized money exchange protocol with near-instantaneous, secure and cheap transactions. But unlike Ripple, which concentrates more on B2B money exchange services, Stellar focuses more on B2C transactions.
The organization entered the market on July 31, 2014 and received a $3 million loan from Stripe.
Stellar originally based its payment network on the Ripple protocol and in 2015 adopted the Stellar Consensus Protocol, with McCaleb as Stellar’s CTO.
In May 2017, McCaleb also launched Lightyear.io, a project that builds on the Stellar network and makes Stellar a global payment and currency exchange.
Finally, in September 2018, McCaleb created InterStellar through the merger of Lightyear and Chain.com.
Although Stellar was initially seen as McCaleb’s revenge against Ripple Labs and with little future, in a very short time Stellar reached the top ten of the coins with the highest market capitalization.
Today (March 2021), Stellar ranks as the 10th most capitalized coin with a market cap of over $9 billion.
Jed McCaleb’s net worth is estimated at around $20 billion, most of which is stored in Ripple tokens.
According to reputable sources, Jed McCaleb sold approximately one billion XRP in the five years between 2014 and 2019.
In the last year it sold more than $400 million of XRP.
In January 2018, the New York Times named McCaleb one of the top 10 people leading the Blockchain revolution and reported that McCaleb’s token ownership in Ripple would put him 40th on Forbes’ list of the world’s richest people.