A report published by Ripple CTO David Schwartz on August 22 states that Ripple’s XRP ledger token is just as, if not more, decentralized than the two apex cryptocurrencies in the world, i.e. bitcoin and ethereum.
What Makes XRP “Inherently” Decentralized?
Satoshi Nakamoto, the founder of bitcoin was intrigued by the idea of a decentralized currency without any control or supervision of a central financial body such as the federal bank, etc. Subsequently, other cryptocurrencies were created.
The industry is still in a nascent stage and faces many challenges day in and out. However, the decentralized feature has made it a haven for the future of technology and the financial world.
As per David, the proof-of-work deployed earlier by bitcoin and ethereum proponents has shown many pitfalls in recent times. They are prone to centralized control and alteration by the miners who possess a considerable control over the system.
In contrast to the validation being made by the miners of ethereum and bitcoin, on Ripple’s protocol, transaction validation is done by validators on the network.
Unlike the Bitcoin and Ethereum protocols, miners desire a high fee, especially as difficulty grows and there are lesser rewards for mining, Ripple has fee escalation, a built-in system that regulates the cost of transactions which makes it suitable for everyday payment.
Problems with Other Crypto Platforms
The report states that the proof of work consensus protocol in use by Ether and Bitcoin is prone to a 51% attack from the community. Notably, the two cryptocurrency’s mining is monopolized by a group of miners. Four groups of miners control 58 percent of the Bitcoin protocol network while three groups of miners control 57 percent of Ethereum network. These groups could influence the cryptocurrency network to favor themselves, without any hindrance, through the 51% vulnerability of the proof of work.
In contrast, the validation of transaction or a change to the ripple network system requires 80 percent validation from the network of users over a period of two weeks, before any changes could be effective. The two weeks period even serves as a time for consideration of reversal of charge as made by users.
Power Vested in the User
Ripple users have the independence to choose any Unique Node List (UNL), i.e. a list of validators trusted by the users. This offers users to choose validators in conducting their transaction, unlike Bitcoin and Ethereum in which validators are imposed without the participant’s knowledge.
Ripple Unique Node List (UNL), consists of members of the community who have no link of any kind with Ripple Inc, which makes it more decentralized and not prone to manipulation of any individual.
Schwartz concluded by stating that the XRP crypto ledger is in many regards, a ledger with more transactional, functional and decentralized attributes than either bitcoin or ethereum.