Ripple Considers Itself to Be More Decentralized than Bitcoin
Decentralization has become a kind of mantra for crypto enthusiasts. Since SEC claimed Ethereum no securities as it was insufficiently decentralized, other altcoin projects opted for the same way. Having reached for the Holy Grail of decentralization they are going to avoid getting controlled by regulators. Ripple however is having rough time now as the most of XRP coins are held by the company itself. Although every effort is taken to distribute them via business partnerships and charity initiatives, it may take some decades to achieve financial independence.
Ripple’s excessive centralization is considered to be the key reason why Coinbase refuses to accept the token. And given continuous trial on whether Ripple is a security, the company has got all grounds to sell the line of decentralization. “The Inherently Decentralized Nature of XRP Ledger” is a provocative article by the Ripple technical director which covers the issue of spitting up the coin and the company. So he insists:
“While Bitcoin and Ethereum are becoming more centralized over time, the XRP Ledger is getting more decentralized”.
Many arguments for or against Ripple decentralization originate from the Jackson Palmer’s ‘Are We Decentralized Yet?’ website. He is monitoring factors like share of funds owned by the top-100 accounts (19% for BTC against 81% for XRP) and the number of public nodes. But as Jackson Palmer admitted, his website is not to be used for assessing decentralization. It is more likely a tool to show power distribution in crypto projects.
“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,” Schwartz states. “Ripple’s validators do not wield meaningful power over the XRP Ledger.”
But this does contradict to independent studies held by Bitmex Research which say:
“Since the keys were all downloaded from the Ripple.com server, Ripple is essentially in complete control of moving the ledger forward, so one could say that the system is centralized”.
But even the most fierce Ripple critics admit that the company and its coin have got lots of positive sides. Ripple has fast transactions, low commissions and the company was highly ranked for its profound transparency reports that cover its efficiency over the last quarter. There is also Ripple Xrapid solution which may have turn useful for international money transfers especially when switching between foreign currencies.
“It’s very clear to me that XRP’s not a security,” said Ripple CEO Brad Garlinghouse.
But we won’t have to argue on that for too long anyway as opinion of the court on the class suit is going to make a decisive end to this matter.