Ripple fans adamantly preach that the cryptocurrency runs on a decentralized network.
A quick search of the term “Ripple Decentralized” on Twitter reveals hordes of accounts claiming that “The Standard” is decentralized in nature. Many are even ganging up in an attempt to prove their point.
In addition, the Chief Technology Officer of Ripple Labs, David Schwartz, wrote an article claiming that the XRP Ledger is more decentralized than bitcoin and Ethereum to the delight of Ripple supporters.
If you closely examine the article, however, it seems that the Ripple Labs executive attacked the two largest cryptocurrencies to make Ripple look good without addressing the core issue of decentralization. Thus, to the average Joe, the article may pose more questions than answers.
Nevertheless, we spoke to a blockchain specialist to finally get to the bottom of the decentralization issue. Hearing his position was not surprising.
Blockchain Expert: ‘Let’s Be Realistic About Where Ripple Exists on This Spectrum of Decentralization’
Matt McKibbin is the founder and chief decentralization officer at Decentranet. According to the company’s website, the purpose of Decentranet is to bring blockchain projects to life by creating partnerships and connecting entrepreneurs to investors. Thus, the executive knows a thing or two about decentralized blockchains.
Mr. McKibbin spoke to CCN and shared his stance on whether Ripple is decentralized or not. He said:
Ripple is centralized. It is basically a way for banks and large financial institutions to trade on a distributed ledger that can be rolled back at any time. This ledger is managed by the Ripple Foundation, not a decentralized network.
The Decentranet founder added:
Ripple is inherently centralized as power rests solely in the hands of the Ripple Foundation. This is useful for large financial institutions. However, that is not something that benefits the decentralized financial ecosystem long-term.
To further explain his stance, Mr. McKibbin also explained the qualities that make up a decentralized network.
Matt McKibbin: ‘Money Systems of the World, Moving Forward, Are Permissionless and Borderless’
To be considered as a decentralized blockchain, anyone should be able to use the network
at any point in time,
said Mr. McKibbin. He also stressed that decentralized systems have
mining or another form supporting the network.
On top of that, the top honcho said:
For decentralized currencies and financial ecosystems, ‘miners’ are the core component, and each system has its own modality to determine how much power and influence each miner may yield.
As mentioned, Ripple Foundation manages the distributed ledger. There are no miners or validators running the blockchain. More importantly, the Ripple Foundation pre-mined the crypto token XRP. A total of 100 billion XRP were released but 63 billion are owned by Ripple Labs. These qualities alone make Ripple highly centralized as there is one power that oversees the network and the supply of XRP.
Also, since the Ripple Foundation wields power over the network, the ledger can be rolled back at any time according to Matt McKibbin. On the contrary, decentralized cryptocurrencies like bitcoin are immutable. This means that once data enters the blockchain, it can never be changed unless someone were to put huge amounts of energy and resources for a 51% attack. This is too expensive and highly unlikely.
Therefore, it’s clear that Ripple is a centralized network.
Last modified (UTC): September 16, 2019 12:50 PM
Credit: Source link