Why Stellar

When IBM was researching which network to build their distributed ledger technology (DLT) products on, they considered Bitcoin, Ripple, and Stellar. Learn more about IBM's partnership with Stellar here.

Bitcoin

Bitcoin would have been a non-starter. One, it is primarily mined in China - our clients are not there, and I’ll just leave it there.

- Jo Lang, IBM Offering Leader, IBM Blockchain Financial Solutions (1)

Ripple

XRP from an ownership standpoint is opaque. While we have done work with Ripple and will continue to do so...we did not know how we could go without having an asset that is transparent.

- Jo Lang (1)

Stellar

IBM ended up selecting Stellar for 5 reasons: 1) its non-profit status, 2) scalability, 3) team, 4) token ownership transparency, and 5) ability to support any asset type.

1. Non-Profit Status

Lumens are managed by a non-profit. All of the ownership is public and transparent. To us, particularly going to bunches of banks around the world, it seemed like the only option.

- Jo Lang (1)

I think what’s interesting to them is that we are this open-source non-profit foundation, so it's very similar to the Linux Foundation - something that is open and neutral. Everyone can see what we are doing, and this is kind of the only way the system can be built. If you imagined the Internet built by a for profit company, it would be a very different world. And because we are structured this way, it allows companies like IBM to use the standards. It’s much more similar to the way Internet standards are.

- Jed McCaleb (2)

2. Scalability

And from the scalability and consensus mechanism, we felt that it is, for our purposes, the best.

- Jo Lang (1)

3. Team

Our team at IBM believe that people, not technology, make for solutions. More importantly, having the right people, with the right mindset, with the right incentives, with the right subject matter expertise, make for solutions that bring actual value to the world. In our experience working with the Stellar team, we saw a perfect match. The folks at Stellar, like us, want to see the world move past the 40+ year old fragmented system that we all suffer in today, but move towards a system that is more fair and equitable for all.

- Michael Dowling (3)

4. Token Ownership Transparency

The lack of token ownership transparency at Ripple was a non-starter.

Also important to us was knowing up front the full ownership structure of lumens with respect to the founders and the development foundation managing XLM. The process is completely transparent and we (and you!) know the founders’ holdings of XLM. This helps us to ensure there’s as little financial conflict of interest as possible.

- Michael Dowling (3)

5. Any Asset Type

We’ve opened up things a lot more, with a clearing ledger that not only clears FX transactions, but really, any transaction resulting in a transfer of value. So, think cash for securities. Or, t-bills for asset-backed assets. Basically, when you boil it down, any “financial instrument” can be used as “money.” Currency is a single example. Our vision is to allow the legal, safe, compliant payment using any asset - for any asset. You could say we’re “one-upping” on the original vision. We don’t want to do just FX. It’s a foundational piece, yes. But it’s a small part of the larger puzzle.

- Michael Dowling (3)

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