Ripple CTO Schwartz touts benefits of XRP’s decentralized ledger
David Schwartz, CTO of Ripple praised the truly decentralized nature of XRP ledger. He wrote on the Ripple website that XRP ledger is rooted in an ‘inherently decentralized, democratic, consensus mechanism, which no one party can control’. He added that if Bitcoin an Ethereum blockchain are considered to be decentralized then XRP ledger definitely deserves to be added to the list of decentralized blockchains.
He spelled out three reasons for the inherently decentralized nature of XRP ledger. His first and foremost reason is the consensus protocol used by the ledger. “The XRP Ledger uses a consensus protocol that relies on a majority of validators to record and verify transactions without incentivizing any one party (this is one of the main reasons why I began working on XRP Ledger more than six years ago). Validators are different from miners because they aren’t paid when they order and validate transactions. Today, these validators operate at locations across the globe and are run by a broad range of individuals, institutions, asset exchanges and more,” he wrote.
Who has the power?
The consensus mechanism requires 80% of the validators on the Ripple network to support a change. Additionally, there is a two week waiting period for a proposed change to take effect on the ledger. Therefore, the validators have to continuously support the change over the two week period. Unlike Bitcoin and Ethereum, where one miner can control 51% of the hashing rate XRP holds the control of only 10 validators out of the 150 validators. This implies that Ripple only runs 7% of validators on the ledger.
The second reason he speaks about is the transaction costs on the ledger. Unlike Bitcoin and Ethereum XRP cannot be mined. Only the coin creators can generate more coins. This means that no computing power can be wasted on mining XRP which saves time as well. Also, the ledger houses a fee escalation system which regulates the overall costs. Lower costs and faster transactions make it ‘the most useful asset for settlement’.
Schwartz gave the feature Unique Node List [UNL] as his third reason for the decentralized nature of the ledger. UNL presents a list of validators that a user trusts to authorize transactions. Users can choose to create their own list of validators or can choose from the recommended UNLs on the network compiled by other parties including the one that Ripple recommends.
“The XRP Ledger is and always has been inherently decentralized because the users always retain the freedom to change their UNLs and the corresponding validators that they trust. For example, if a party controlling a large number of validators abused that power to propose changes that served only its own interests, users operating nodes could simply remove the party’s validators from their UNLs and rely on other validators that more closely represented their interests,” according to Schwartz.
Ripple is gaining popularity as xRapid, xCurrent, and xVia are being tested by different companies for the purpose of easier cross-border payments. xRapid pilot tests revealed that transactions only require 3 minutes which means that the technology has the potential to replace international payment networks like Swift. Ripple shows a promising future and its current pathway of progress has the power to boost its product value as well as XRP value in the crypto market.
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