Why is Jamaa based on Stellar?

Most of the hype surrounding blockchain apps has centered around Ethereum, and with good reason. The amount of support for developing on Ethereum is huge- a large and talented community of developers has concentrated itself around Ethereum, and it’s possible to do just about anything you can imagine on the platform- at least theoretically.

This is the main appeal- the ideas are so exciting, because it seems like you could just replace the entire world order which has built up over thousands of years, and edit out all of the social problems we are facing. But when it comes to the nuts and bolts of implementing those solutions, it becomes clear very quickly that there is a bit more to it than just writing code to replace economic and political structures.

In particular, when looking at the Muslim ummah, there are hundreds of millions of us who are living on an amount of money that would probably be considered below the poverty level in many countries. Of course, our wealth exists in other areas, and a lot of economic value is exchanged without having any monetary value assigned to it- relatives that live nearby helping care for children, or gifting home made yogurt, or loaning a car, for example.

But when it comes to international finance, it’s kind of hard to harness all of this stuff to compete with the big guys, who already have a giant world-spanning web that can snap up investment opportunities as they appear.

For people in places like Europe or the US, Ethereum fees seem pretty reasonable- a few cents for a transaction, maybe 20 cents for a basic contract, or 80 cents for a slightly more complex contract. But when value skyrockets, suddenly publishing a contract on the blockchain can cost the equivalent of several dollars.

There are certainly many applications where this is acceptable, but a farmer in Nigeria who wants to buy a goat is certainly not one of them.

Limited Smart Contract Capabilities

Of course, choosing Stellar comes with a lot of challenges. While the fees are much lower, the amount of complexity that can be programmed into transactions is quite limited. Stellar commands are, however, sufficient to list a number of recipient and sender accounts. By extension, this can at least be used as evidence that a transaction took place, and of who was involved in the transaction.

The question that we had to ask, and a question that anyone developing in cryptocurrency should ask, is “Why does this have to be decentralized?”

Semi-Decentralized

The primary value of cryptocurrency is in establishing trust, and there’s actually a lot of things that can be centralized without requiring too much trust.

In Islam, we are taught to always seek the middle way between extremes. The trading platform Lykke pioneered a semi-decentralized approach based on the Bitcoin blockchain- wallets and trades were decentralized, but the trade matching engine was fully decentralized. When Bitcoin’s price rallied to $20,000, however, their model rapidly became unfeasible.

The premise is still good- offer the user experience and speed of a centralized app, with the security of decentralized wallets and cryptocurrency. This seems to be a winning model, and while the functionality of Stellar is limited, Stellar is also focused on spreading adoption of their currency in many of the same markets where a large percentage of the world’s Muslims live.

This means there is a possibility to ride the wave of adoption promoted by an organization with WAY more resources than ourselves.

Jed McCaleb was one of the founding members of Ripple, and when he left to form Stellar due to disputes with the Ripple team, he also took with him a major store of XRP- so much that he has been accused of manipulating XRP prices by dumping his reserves. Stellar itself now has significant market value as well, in addition to backing by the billionaire founders of Square.

The consensus method of Stellar is also quite unique- it is neither proof of stake nor proof of work, but rather leverages the trust held by existing organizations. Instead of having to trust a single organization, however, it balances the consensus by involving multiple trusted parties.

It’s not the ideological powerhouse that Bitcoin or Ethereum are, but Stellar is quite a bit more practical, particularly when micropayments are involved. Micropayments are an essential element of the incentive and community involvement model of Jamaa, so it really seems to be the most logical choice.

Why not Ripple?

Ripple and Stellar are quite similar in many way, and really neither are perfectly in alignment with Islamic values. Ripple, however, has much more of a view to uphold and maintain the existing order of things, and is seeking to make itself an indispensable part of modern financial architecture.

The Stellar team appears to be quite a bit more concerned with the problems of global inequality, and seems to be more focused on integrating the unbanked, which is where much of the real potential of the Muslim ummah is. So it seems like there is more common ground between Stellar and Jamaa than would be the case with Ripple.

Future Perspective

Of course, eventually there is functionality we would like to add to Jamaa that would not be possible with the Stellar network. For example, for a dynamic and decentralized reputation system to truly shine, more features would be required, especially when it comes to linking the reputation of different addresses together.

Likewise, the “100% pre-mine with airdrops” model has a lot of advantages, but it is basically the cryptocurrency equivalent of an absolute monarchy. It’s nice as long as the king is good, but if the king happens to get sick, or get kidnapped, then the entire system folds like a house of cards. Quite a far cry from the anti-fragility ethos of Bitcoin.

Of course, the foundation for a solid consensus method is there- the Stellar Consensus Protocol avoid many of the hazards of both proof of stake and proof of work. It is an open source project, so the possibility always exists to make modifications to the code base and start with a similar protocol.

We’re starting with the app, but Jamaa is definitely part of a new vision for expanding the scope of what an app can be through interaction with a distributed network. We’re just trying to seek the middle way, and when the time comes, if we can gather enough support, we can start to patch together an autonomous distributed network, bi idhnillah (with God’s permission).

For now, we have enough on our hands just trying to build a functional crowdfinancing app, without the added difficulty of actually working on the underlying payment protocol.