Decentralization, advantage or obstacle: Ripple case
Decentralization has become a source of pride for cryptocurrency purists to stimulate each other.
Since the SEC declared that Ethereum does not constitute a value because it is now "sufficiently decentralized," other altcoin projects have discovered a way out.
When reaching the holy grail of decentralization, according to the theory, it should be possible to escape the censorship of regulators. Ripple has been subject to a particular scrutiny in this count due to the fact that most of the coins are owned by the same company.
While Ripple has been making efforts to disburse these coins through business associations and charitable initiatives, it could be decades before the company holds a minority stake in its own currency.
The billions of XRPs in Ripple's vaults, and the possibility that this considers the cryptocurrency to be a value, is believed to be a decisive factor in which Coinbase declined to include the chip.
Along with the ongoing class action lawsuit it should determine if undulation is a value, and the company has every reason to push the narrative of decentralization. "The inherently decentralized nature of XRP Ledger" is a provocatively named piece of the Ripple CTO that establishes the case for the separation of currency and company. It states:
"As Bitcoin and Ethereum become more centralized over time, XRP Ledger is becoming more decentralized."
The search to decentralize Ripple
Many of the arguments that revolve around the decentralization of Ripple, or the lack of it, are derived from the website Are Are We Decentralized Yet? From Jackson Palmer. Here the metrics are tracked, such as the percentage of money held by the top 100 accounts (19% for BTC versus 81% for XRP) and the number of public nodes.
However, as Jackson Palmer would admit, his site does not intend to serve as a rubric to define decentralization; rather it is a tool to highlight the distribution of power and control in cryptocurrency projects.
"The XRP Ledger is and always has been inherently decentralized because users always have the freedom to change their UNLs and the corresponding validators they trust," argues Schwartz. It also states that "Ripple validators do not exercise significant power over the XRP Ledger". This goes against the independent research conducted by Bitmex Research that found:
"Since all the keys were downloaded from the Ripple.com server, Ripple is essentially in complete control of moving the ledger forward, so it could be said that the system is centralized."
Even the fiercest critics of Ripple would grant that the company and its currency of the same name have many positive attributes. Ripple is fast to ship, has extremely low rates, and the company has been praised for its meticulous transparency reports that shed light on its performance during the previous quarter.
There is also the Ripple Xrapid settlement solution that can have useful applications for the international transfer of money, particularly when changing foreign currency.
Source: Bitcoin News