Ripple, and the “as-a gift-received cryptocurrency token XRP, have been repeatedly beaten. Their cult-like following, their scummy marketing strategies, and their phantom partnerships/MoUs with the oh-so-hated-in-crypto banks/traditional finance have been covered far and wide. Ripple’s incessant attempts to make everyone feel like Ripple and treat the currency and company as separate entities are a problem for crypto folks.
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Brad Garlinghouse may tell you otherwise, but there are ample evidence that XRP has been centralized and is under the control of its parent company. Although Ripple is 60% of XRP’s supply, most people focus their attention on Ripple’s lack of centralization.
Any true decentralized cryptocurrency will require mining. This is the process by which transactions are validated and then added to the blockchain using the assistance of a miner. The computer node known as a miner competes against other crypto miners in order to solve complex mathematical problems using cryptographic hash function. Once this problem is solved, the miner will be able to add transactions to the blockchain by verifying them.
The concept of mining is just as old as crypto. Bitcoin was introduced in 2009, and has proved to be the most secure and decentralized method for managing a public Blockchain. This system is known as Proof-of-Work consensus algorithm. It allows miners to “prove” that they have given their processing resources to network. In return, they get payment in the form of freshly-minted Bitcoin for each block added to the blockchain.
Although PoW algorithms as well as cryptocurrency mining have their limitations (like being too slow for new crypto projects and being energy-intensive, they’re still considered the best method of validating public Blockchains).
Is the PoW currency XRP?
XRP doesn’t have a PoW value. It is not possible to mine XRP through a Bitcoin-like network decentralized public nodes. Ripple decided to host XRP on a pseudo-private, centralized blockchain. The Proof-of-Correctness algorithm is used to validate this blockchain. This consortium includes nodes. It is also known by the Ripple Protocol consensus algorithm, (RPCA). This algorithm is used every few seconds to ensure correctness and network agreement. The consensus reached is the final closed ledger.
RPCA is heavily dependent on the Unique Node list or UNL. UNL’s, which are the “god nodes”, of the XRP blockchain ledger are considered to be the “god nodes”. They are the ones who get to vote and maintain consensus on all issues related to the blockchain. There are also “stock” nodes that run on Ripple’s open source software, but they don’t participate in voting or consensus. Both types of nodes run on Ripple’s “open source” software called rippled; each stock node is connected to one UNL node it “trusts”, serving as public API access/support/back-up points for the network validator.
What all of this means is that XRP operates on an algorithm that is somewhat of a hybrid between PoW and Delegated-Proof-of-Stake, except without the rewards of either. UNLs can be described as “trusted nodes” that have been handpicked and approved by Ripple for XRP ledger verification. Ripple has the rights to make necessary recommendations and provide best practices, but it is not possible to officially onboard your validator node.
It becomes obvious that rippled node software cannot be altered except at Ripple’s request. They control access to the source code, and audit it thoroughly before making any changes. This is prudent because it makes sure the software runs smoothly. However, the UNLs must validate all code modifications.
There are 26 UNLs in the network. These nodes can be either Ripple-controlled or were granted the responsibility to maintain the XRP ledger. is where you can find the full list of all XRP UNLs. Ripple is currently working to “decentralize the UNL network,” as the number of validator nodes controlled by companies makes up 27%. Despite the fact that 73% of the UNL network’s other 73% are hand-picked by RIPPLE in order to validate it, this dynamic is still interesting. As XRP validation networks require 80% majority for a ledger to be closed, Ripple theoretically has sufficient control to stop it from being shut down.
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XRP is pre-mined and has a fixed supply of 100 million tokens. This means that there are no mining incentives for validators. Ripple selects UNLs from its UNLs and assigns them the responsibility of “preserving and protecting the stability and sensible evolution” of the network. Ripple’s development documents state that validator nodes need to wait until XRP becomes “successful” and is widely used in interbank settlement before they are eligible for an unidentified incentive to ensure the stability of the XRP Blockchain.
These points clearly demonstrate how centralized the XRP blockchain is. Although you may technically be able to mine PoW crypto on certain pools, and receive XRP for the transaction, it is not possible to create the currency on its own. Ripple’s financial project, while small in scope, is a functioning centralized asset with the potential for instant cross-border transfers. It also allows almost no fees to transact. XRP is not a trustless, decentralized cryptocurrency. It is unlikely that it will lead crypto’s evolution the way Satoshi intended.