The Bitcoin Secret Project reveals Stellar

(TechCrunch) There’s Bitcoin, the asset and hedge against fiat currencies and the politics of their central banks.

And then there’s Bitcoin, a fundamental innovation around a
distributed public ledger of transactions. Many crypto-currencies try to
split or play with the distinction between the two.

An early attempt was the Ripple, from OpenCoin. But the team behind that startup split. Co-founder and Mt. Gox creator Jed McCaleb left to go work on other stealth projects.

Now he’s re-appeared again with a new non-profit called Stellar, that’s being backed by Stripe. Joyce Kim, who founded a company that OpenCoin acquired called SimpleHoney, is also leading the non-profit.

The similarities are obvious. Stellar
is a decentralized protocol for sending and receiving money in any pair
of currencies. It’s not exactly a competitor to Bitcoin; it’s meant to
facilitate transactions in all kinds of currencies from the majors like
the yen, dollar and euro to other emerging-market fiat currencies.

That protocol is paired with a crypto-currency called the Stellar.
They’re starting out with a fixed amount of Stellars that they’re freely
gifting to new users. This is very different from Bitcoin, which must
be mined through machines solving complex cryptographic problems in
exchange for small amounts of the currency awarded at fixed time
intervals.

Kim has argued in the past that this is a more egalitarian approach.
Mining means that only people with high technical skill or the capital
to operate now-expensive mining hardware get access to new Bitcoin. But
Stellar is distributing half of its initial amount to anyone who will
sign-up for it through the program. Stripe is getting 2 percent of
Stellars in existence in exchange for $3 million.

A quarter of the Stellars will go to non-profits via an ‘increased
access’ program, while another 20 percent will go to existing Bitcoin
holders based on a snapshot of the blockchain on a specific date in the
future. The remaining 5 percent will go toward operational costs. If the
value of Stellar’s payment network increases, so will the value of the
Stellars that the non-profit holds.

Also, unlike Bitcoin, the Stellar economy has a built-in inflation rate of 1 percent indefinitely.

Stellar’s board has Stripe co-founder Patrick Collison, Khosla VC and former Square COO Keith Rabois
along with McCaleb on the board. Also advising the non-profit are
security expert Dan Kaminsky, Joi Ito, Ronaldo Lemos, Linda Stone, Y
Combinator’s Sam Altman, AngelList’s Naval Ravikant, Jackson Palmer, Greg Stein, and WordPress’ Matt Mullenweg.