Ripple CTO Claims XRP Is More Decentralized Than Bitcoin and Ethereum
I just published a post on the inherent decentralization of the XRP Ledger — a passion of mine. https://t.co/JAGsAsh5R3
— David Schwartz (@JoelKatz) August 22, 2018
In a blog post titled “The Inherently Decentralized Nature of XRP Ledger,” Schwartz attempts to dispel the ongoing criticism of XRP as being overly centralized, which has fueled speculation that the digital asset will soon be classified as a security.
Schwartz’s main argument against the criticism comes in the form of a side-by-side comparison with Bitcoin and Ethereum, two blockchains that he believes are currently viewed as the gold standard for decentralization by many. While he admits this may have been the case early on, Schwartz points to the dominance of a few major mining pools that have an overwhelming majority ownership of the global hashrate as an indicator of centralization.
As it stands today, four mining groups currently control 58% of the Bitcoin network while only three miners account for 57% of Ethereum’s global hash rate. This ultimately places both blockchains at risk of a dreaded 51% attack, if those mining groups were ever to coordinate such an attack.
In contrast, Schwartz states that the XRP’s ledger is not at such a risk as its consensus protocol requires validators to record and verify transactions without any incentive, and limits the weight of each validator to one vote.
In contrast, the XRP Ledger requires 80 percent of validators on the entire network, over a two-week period, to continuously support a change before it is applied. Of the approximately 150 validators today, Ripple runs only 10. Unlike Bitcoin and Ethereum — where one miner could have 51 percent of the hashing power — each Ripple validator only has one vote in support of an exchange or ordering a transaction.
Despite these attempts to dispel centralization claims, it will likely not be enough to silence critics, as Ripple still currently holds more than 50 billion of the 99 billion total XRP. Despite its relative stability and utility in financial systems, the claims of XRP’s superiority over both Bitcoin and Ethereum will likely draw additional criticism in the days to come.
Disclaimer: This article’s author has cryptocurrency holdings that can be tracked here. This article is for informational purposes only and should not be taken as investment advice. Always conduct your own due diligence before making investments.