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Few projects are more controversial in Ripple's cryptosphere. The project includes both a private company (Ripple Labs) and a cryptocurrency (XRP). It is a company that aims to make profits rather than an open source foundation or community, as it is more common in other projects.
In addition to this, Ripple's stated goal is to make cryptocurrencies useful for banks and financial institutions, which is a very unpopular notion since Satoshi created Bitcoin just to get rid of it. Finally, because behind the coin there is a private company, many elements of the community do not believe that the blockchain and the token are really decentralized.
That's why Ripple's Chief Technology Officer (CTO), David Schwartz, and former Chief Cryptographer came forward to say that XRP has an "inherently decentralized nature".
David Schwarz talks about XRP and decentralization.
Let's start from the beginning. Merriam Webster dictionary defines decentralization as "dispersion or distribution of functions and powers"
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This definition is somewhat abstract and difficult to apply clearly to situations as complex and subtle as any blockchain can be. Mr. Schwartz published a new report titled " The Inherently Decentralized Nature of XRP Ledger " in which he describes the notion of centralization in the blockchain world as "wildly nuanced, misunderstood and, frankly, evolving." apparently trying to make things clear once and for all for the problem of decentralization of XRP.
Ripple Labs extracted all XRP tokens before the currency was published, which is a big difference from most other coins because it means there is no mining. In Bitcoin, or Ethereum, or in most other projects, mining is going on and the miners get rewards for doing that job. Not XRP.
In Ripple blockchain validators that register and then verify transactions do not have that kind of incentive. Schwarz describes these validators as being scattered all over the world, including exchanges of cryptocurrencies, institutions and individuals.
"Put simply, the XRP register is based on an inherently decentralized democratic consensus mechanism that no party can control".
Yesterday, Brad Garlinghouse, Ripple's CEO, used his twitter to bless Mr. Schwartz's new report and asked for an AMA session in which he would address this issue further based on audience questions.
. @joelkatz talks about TRUTH on Ledger XRP! Designed brilliantly to be intrinsically decentralized. More information on this during my AMA with @CoryTV at 3 pm (PT) today on https://t.co/OmzfxkPL6N https://t.co/IIcdA75bIt
– Brad Garlinghouse (@bgarlinghouse) 22 August 2018
Schwartz shows how the 4 largest Bitcoin mining basins are responsible for 58% of the network, while Ethereum is in the hands of only three. He cites this as proof that XRP is significantly more decentralized than those coins. This statement comes in front of the SEC position on Ethereum and Bitcoin, which is that they can not be titles because no central organization can control them.
Another fact underlined in the report is that something like 80% of all Bitcoin extraction takes place in China (which is a country very open to cryptocurrencies but rather hostile to Bitcoin) that could end up with create the risk that Bitcoin will be influenced by a " single sovereign government ." Worse is that the small number of big miners in BTC and ETH could make them vulnerable to a 51% attack, which means they could be violated.
Unlike these two cryptos, XRP needs 80% validators in the network to support a change in the ledger for a full fortnight until the change is final.
According to Mr. Schwartz, Ripplenet includes 150 validators of which only 10 are managed by Ripple Labs. Each node can vote only once for each change in progress. These numbers are impressive and could support the case where China can gain control over Bitcoin.
The most critical warranty for decentralization in XRP is that users in the ledger can select the list of trusted validators, included in a List of unique nodes. This freedom to choose a validator means, in Mr. Schwartz's words, that Ripple's XRP register is "and has always been intrinsically decentralized."
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and / or its affiliates, employees, writers and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct a thorough research before investing in any cryptocurrency and read our complete disclaimer.
Image courtesy of Asif Aman on Unsplash
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