McCaleb’s Comeback: Breakups, Breakdowns and Stellar’s Big Break-Out

CoinDesk profiles Jed McCaleb, the early cryptocurrency evangelist who created Stellar, now the world's sixth-largest coin by market cap.

AccessTimeIconDec 31, 2018 at 4:55 p.m. UTC
Updated Apr 10, 2024 at 2:45 a.m. UTC

You might know Jed McCaleb as the creator of Stellar, the world’s sixth most valuable cryptocurrency, and if you do, it can’t be exaggerated just how big of a miracle that is.

In the pantheon of early cryptocurrency evangelists, there might be no one whose name has been run through as much mud as McCaleb’s. Sure, Charlie Shrem went to jail, Roger Ver was branded a heretic and Gavin Andersen faded into obscurity. Even amidst such company, though, McCaleb has seemed to excel at being five feet from the dumpster fire.

But the point of this article isn’t to rehash the past, to talk about how he (technically) started Mt. Gox, the defunct crypto exchange that now only lives in court dockets, or to discuss Ripple and XRP, the often intertwined company and cryptocurrency he helped create, only to abandon in a story that, years later, is still one of the tech’s most tabloid-worthy.

No, because someday, when the history book is written, McCaleb might come to be best known for Stellar, a project that, while launched four years ago, arguably became the quiet comeback story of 2018. Read between the lines of some of the year’s biggest stories, and you’ll be apt to find Stellar, silently omnipresent.

IBM, the blue-chip behemoth whose executives once swore IBM would never “do coins”? They’re moving real money with cryptocurrency now, via a partnership with the Stellar Development Foundation, the non-profit that manages Stellar’s code.

Blockchain, the bitcoin wallet provider that’s chosen airdrops as its next best strategy? There’s a billboard at one of San Francisco’s busiest intersections boasting of how it’s giving away $125 million in crypto to users (unmentioned is that the asset in question is XLM, the cryptocurrency that powers Stellar).

The year’s biggest crypto acquisition? Stellar can lay claim to that, too; Stellar’s San Francisco offices are now home to Adam Ludwin and Devon Gundry, the founding team behind Chain, formerly one of the best-funded and most publicly visible startups seeking to connect financial incumbents to the blockchain.

Yes, at some point during 2018, Stellar, the cryptocurrency that was roundly derided at launch as a spiteful Ripple rip-off, came of age, emerging from a period in which McCaleb admits people “forgot Stellar existed” into a market he says is now hungry for mature blockchain projects.

But if the conversation around Stellar has changed, McCaleb remains the same as he ever was – an unpolished evangelist.

Clad in a T-shirt bearing Stellar’s signature blue, he looks down into his lunch as he offers his best estimation of the project’s success, telling CoinDesk:

“It was just sticking around, and not having major catastrophes.”

Not quite Vitalik

But if McCaleb is now one of the more successful entrepreneur-developers to launch his own cryptocurrency, he notably stands apart in how he approaches that role publicly.

Unlike say, ethereum creator Vitalik Buterin or Cardano creator Charles Hoskinson, you won’t find him embroiled in flame wars on Twitter. (His account, filled with mostly retweets, has just 24,000 followers, compared to the hundreds of thousands garnered by his peers).

Neither does he have, as he admits, the “fanbase” of this new breed of cryptographers who travel the globe on a seemingly endless Merry-Go-Round of speeches and conferences.


Still, his aversion to that type of public visibility, no doubt, is due to brushes with the press in which he believes he was branded as a callous and carefree California surfer, one who the articles seemed to allege was oblivious to the harm and damage he caused.

It would become a pattern for years that McCaleb would accept interviews only if Mt. Gox and Ripple weren’t up for discussion, or else grapple with editors for later omissions to such mentions. Looking back, the word “sucks” is what he uses most often to describe the shadow of his early work and how long it’s managed to endure.

“It’s increasingly less relevant, so that’s good, but it’s annoying,” he says now.

As interpreted by some of his oldest friends and supporters in the industry, however, the characteristics that made him controversial can be interpreted differently; his frankness translated as authenticity, his combativeness reframed as resiliency.

“Jed is super brilliant and humble, he just seems to have a natural knack for being an early visionary with great ideas,” Kraken CEO Jesse Powell, who invested in Ripple after striking up a friendship with McCaleb, says. “But he’s also able to execute well.”

In person, it’s easy to see both versions of McCaleb as a kind of yin and yang in the eye of the beholder.

They’re on display as we talk about the XRP Army, the online community that has sprung up around his former project Ripple and that no doubt has 1) already now found this article through obsessive Google searching and 2) is busy dissecting whether it is covertly for or against the XRP cryptocurrency.

“I think the culture of a team and the community flows from the founders of it. It’s really true and the point was driven home more with this Interstellar acquisition,” McCaleb says, recalling the acquisition, which was finally revealed to the public in October.

“Adam [Ludwin] and I are very aligned on things, but there’s these personality differences. You can feel it through the team. The same phenomena is happening with XRP where it flows from the top,” he continues, before realizing he might have said too much.

“I don’t know,” he continues. “I’ll leave it there.”

'The Ultimate Mission'

In interview, it’s surprising how open McCaleb remains with his comments given his candor has often been used against him in articles that seek to interpret and define him or to hold him accountable for losses and wrongs.

It’s unfortunate because when speaking about himself, McCaleb truly shines.

Should our conversation have an overriding mantra, it’s the idea of mission, a concept that McCaleb evokes frequently when discussing both his life and vision for Stellar.


“It's weird to me that people don't think about that more, what they want to achieve in life, why they are they doing what they're doing. Especially, it's weird people make a ton of money and they just don't know what to do with themselves, they just buy a huge yacht,” he says.

Backstage at Consensus 2018, McCaleb went so far as to say he wasn’t ever a billionaire, acknowledging he didn’t quite manage his holdings to perfection over the years. His most extravagant purchase? “I bought a house in the Bay Area,” he quips now.

Yet, McCaleb maintains he isn’t motivated by money, but rather “this idea that having a universal internet-level protocol for payments helps everybody.”

But while hundreds of entrepreneurs might utter the same words, it’s McCaleb’s experience that now lends them power and vivacity. In person, he has a confident optimism that might pass for something in even more limited supply in the cryptocurrency these days, maturity.

Still, if McCaleb has grown up, he argues Stellar has, too. Originally aimed at building a network of microfinance institutions in underdeveloped countries when it was founded in 2014, McCaleb now says this idea “proved too early.”

If there’s a new emphasis for the Stellar project, then, it’s to connect existing financial firms to the blockchain, particularly mobile wallets, a mandate he described as core to the work of Interstellar, the company now powered by Chain’s former team, and that shares an office with the Stellar Development Foundation.

“What it boils down to is that it's trying to make the first killer app. The foundation can focus on building the platform. Interstellar is a viable business built on Stellar,” he says.

It’s also this alignment that he feels is the biggest differentiator in his approach to Stellar as a leader, a better sense of his own goals and how to align those with others.

“I am definitely more careful about who I worked with, and I made sure that people’s motivations were about achieving the mission,” McCaleb says, adding: “Sure, you end up making money if you achieve the mission, but you have to believe in the idea.”


Early like the Arpanet

Still, if you’re expecting that all of this leads to a breakout for Stellar in 2019, McCaleb isn’t convinced. In fact, he believes the calculus of the industry in estimating its own development is off, perhaps even by decades from where it is in conventional wisdom.

“People put the time frame wrong as dot-com, when actually it’s just way before, like Arpanet kind of stuff,” McCaleb says.

As an example, McCaleb estimates the size of the Stellar development ecosystem today as being only around 50 people who are working on the core code, and he sees the next step in its evolution as enlisting more people to build the wallets and exchanges needed for it to truly become what it was meant to be: a useful, open-source protocol for payments.


For his part, the Stellar Development Foundation now employs 12 people, while Interstellar now has a headcount of 25 staff members dedicated to that mission.

Still, the project is a long way off, he says, from being useful to one of Stellar’s more notable original backers, Stripe, the U.S. payments startup built to ease frictions in internet payments and that, according to McCaleb, is now working with Interstellar.

“They basically need the ecosystem to be a certain level of maturity, they need the anchor, the person issuing the fiat currency on the network. We need those entities to exist before they can use the network,” McCaleb says. “That’s the hope.”

In the meantime, McCaleb expects his focus to remain on payments, despite the fact it’s become less sexy in recent years, supplanted by ICOs, crypto-collectibles and all manner of new markets enthusiastic entrepreneurs think can be powered by distributed systems.

That’s not to say McCaleb doesn’t expect those projects to continue using Stellar.

His argument is that Stellar has become more broadly useful because it's agnostic, and that he wouldn’t be surprised to see securities tokens or tokens representing real estate on the network at some point in 2019, just as ICOs, including one of the most high-profile in mobile messenger Kik, migrated to the platform this year.

It’s a core part of why he expects a big focus of Stellar’s unreleased 2019 roadmap to be on a form of sidechains, or blockchains that are compatible with the core Stellar’s software, but that operate on their own, with purposes and missions unrelated to Stellar’s own.

“For lack of a better way to describe it, that will allow us to innovate there, and allow people to build stuff there,” he says.

Fill in the blanks

Here then, we finally get a sense of how McCaleb has been able to not just overcome the stigma around him, but his own unsteady evolution, from Berkeley physics dropout to embattled founder to quietly successful distributed network architect. He has a capacity to leave answers unfinished or unspecified, to say just enough for you to begin filling in the blanks.

Sometimes, such as when talking about project specifics, this leaves a lot to be desired.

On Blockchain’s airdrop (at press time, no one on either side seems to be able to confirm it will actually happen) McCaleb says: “They’re figuring out the kinks. It’s kind of ongoing.”

On IBM, he says: “They’re building a thing, WorldWire, that is a replacement for SWIFT, and it’s built on Stellar. We just talk to their engineers and help them through the process.”

Still, this open canvas can have the opposite impact. When McCaleb begins to extol the virtues of napping – he sleeps 15 minutes a day in Stellar’s dedicated nap room – it’s enough to make you want to change your habits. (McCaleb insists he is able to achieve real sleep, complete with full dreams.)

But while he won’t say exactly what he dreams about, it might not be life beyond Stellar.

When asked about the responsibility he now feels at the helm of a $2 billion network, he’s quick to clarify that he believes working on the network is where he belongs.

McCaleb says:

“I’ll need to be a part of Stellar until I know that if I walk away, it’s not going be detrimental. I don’t want to let people down and want to make it successful.”

In that same way, one of the more remarkable things about Stellar’s offices is the attention to detail and the level of comforts for employees. Sure, the front door may look like a front for a storage locker, but inside, one is just as apt to find free catered lunch as cards on the wall filled with facts and histories of employees.

Later on, I find Gundry, scouring an ample snack rack that stretches across two full rooms, and includes all manner of self-serve nuts and soft drinks, eating a grass-fed beef stick. He reclines in a chair and grills me a bit on the profile.

“Did you get the story? Did you get, the how do you say it, scoop?” he quips.

Is he busting my balls? Defending his boss? Either way, that might just be the story itself.

The road ahead may be long or even fruitless for McCaleb, but in front of the snack rack, one thing is clear: McCaleb has the supplies – and now, the people – to last the winter.


Art by Diego Rodriguez (Plasma Bears by @NeonDistrictRPG)


Original photos by Pete Rizzo for CoinDesk


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