Jed McCaleb is the co-founder and CTO of OpenCoin Inc. and the original developer of Ripple. Previously, Jed created eDonkey in 2000 (one of the largest p2p file sharing network at the time) and Mt. Gox in 2010 (the largest Bitcoin exchange). Jed dropped out of UC Berkeley in his freshman year to start building things.
Why does the world need Ripple?
The internet has changed many things, but finance and payments have never really changed. What we have now is just a hack to what existed in the ’60s—checks, banking, stuff like that. It’s overdue.
So you see Ripple as an evolution of the internet?
Yeah. It’s the next step in the development of the internet—the democratization of information, which is really what money is. By creating a unified payments platform over the internet we’re internet-cizing money.
What’s the simplest way to explain all this to a complete newcomer?
What originally drew you to programming?
I love the idea of making things that work on people’s behalf—I see programming as the ultimate form of leverage. Also, I’m fascinated by large group systems and seeing how they interact, and grow, and change.
Ripple came out of your interest in Bitcoin. How did you become involved in Bitcoin?
I read that first Slashdot article about Bitcoin and thought the idea was awesome. I’ve always been interested in ways the internet can make people’s lives more free.
How and why did you create Mt. Gox?
At that point there wasn’t a good way to buy and sell Bitcoins and I wanted to buy some. So, as a side project, I made Mt. Gox and bought my first Bitcoins there. As the company started to take off, I sold it.
Why sell it?
Mt. Gox is cool and needed to exist, but it’s not technically interesting and I had no interest in running it long-term.
Can you talk about the genesis of the Ripple protocol and network?
I love Bitcoin, but the mining process has always bothered me because it wastes so much energy. After I sold Mt. Gox, I was thinking of ways to do Bitcoin without the mining. I had an idea about how to do it and I posted the idea on a forum hoping that someone else would make it, but no one did. Finally I did it myself because I couldn’t stop thinking about it. It’s something I believe needs to exist.
What happened next?
I got some other people in the Bitcoin community involved and we began to work on it. It started to evolve and grow and at some point we realized it was much bigger and more powerful than a currency.
Are there new features still in the works?
Yeah. One of the things we’re excited about, besides the payment system itself, is this scripting language we’re building that will be a way to execute code on Ripple’s distributed network—it’s pretty innovative.
What’s an example of that?
We can’t imagine all the possibilities, but one example of what is possible is an automated decentralized subscription payment system. Or you could write a script so that a Ripple account must receive a certain amount of money in a set amount of time or the money will automatically return to its holders—similar to what Kickstarter does, but without needing a company to oversee everything. Ripple replaces a lot of trust-based systems with code-based systems.
What’s Ripple’s relationship to Bitcoin?
Ripple shares the same basic economic theory and has the same goals, but hopefully it solves some of the technical shortcomings, and should be easier for people to adopt.
Is Ripple a Bitcoin replacement?
As Ripple evolved it became less of a replacement for Bitcoin and more of a complement. It’s a distributed exchange for all currencies including Bitcoin.
Beyond the technological and financial advantages, does Ripple have political implications?
Sure. Periodically national currencies get totally devalued by their governments and that is terrible for the people who live there. This basically robs people of their money. Ripple will be highly beneficial for the people of those countries. Situations like in Cyprus, Zimbabwe, and what happens in Argentina every four years or so would be prevented. Actually, there are a lot of problems that Ripple fixes.
Is Ripple a replacement for the existing financial system?
No. It’s not incompatible with the existing financial system. It merely unifies and opens the system in the same way the internet unified and opened other networks of information.
How far can this thing go?
Ideally, it will become a global payment infrastructure—a unified interoperable payments method—and become the standard protocol for money.