u.today
Analyst Justin Bons, a cryptocurrency veteran and head of the oldest European blockchain fund Cyber Capital, explains why decentralization narratives do not work for XRP Ledger.
Ripple is centralized, PoA cannot be trustless
Mr. Bons has taken to Twitter to share that XRP Ledger blockchain is not permissionless, as it relies on a permissioned ecosystem of nodes selected by centralized entities or individuals.
I do not support Ripple; far too centralized:
— Justin Bons (@Justin_Bons) December 22, 2022
XRP is based on permissioned nodes explicitly selected by the XRP foundation or individual users
Which the XRP community believes makes it decentralized; they are wrong
Choosing who you trust is PoA & not the same as trustlessness!
This proof-of-authority design is not equal to real "trustleness," Mr. Bons highlights. In XRPL's consensus, individuals delegate too much power to participants of the block validation process:
I disagree that replacing PoW/PoS with individuals choosing who they trust is trustless.
Ripple alum Matt Hamilton of Protocol Labs opposed Mr. Bons' theory. He highlighted that neither Ripple nor XRPL Foundation could prevent a blockchain enthusiast from becoming a validator of XRP transactions.
As per Mr. Hamilton, XRP Ledger's version of PoA represents the same type of social contract as the one used by all first-gen blockchains, including Bitcoin (BTC) and its forks.
Why UNL rules matter
The two opponents disagreed about the role of XRPL Foundation's Unique Node List (UNL), i.e., its set of active XRP transaction validators.
Mr. Bons highlighted that validation power on XRP Ledger is only controlled by members of the "official" UNL. Meanwhile, in October 2022, XRPL Foundation, the nonprofit that oversees XRPL's development, stressed that two Ripple-associated validators were removed from UNL.
After this amendment, Ripple and its entities only control 2 out of 35 validators, or less than 5.8% of its total distributed computational power.