Decentralization is a new concept that is highly misunderstood due to its evolving nature. Many crypto enthusiasts turn to Bitcoin and Ethereum as the yardstick of decentralized blockchain systems thus getting everything wrong when judging XRP. If the verdict is based on the two, it is true that XRP ledger scores higher than those of the two market leaders.
Buy putting crypto politics aside and ripping the XRP Ledger apart, you begin to appreciate that it is more decentralized than that of Bitcoin and Ethereum. A simple look at the design, you begin to appreciate the level of its decentralization. For one, the blockchain power; the transactions, is not vested on an individual or a group.
XRP Ledger is Consensus Backed
While Bitcoin and Ethereum rely heavily on PoW (proof-of-work), the XRP ledger is driven by consensus. PoW algorithm rewards strangers called miners to validate transactions which is an attribute of decentralized systems but the two outfit’s limitations continues to shift the platforms towards centralization with “select” mining entities controlling huge say over the ecosystems.
XRP Ledger consensus protocol validators are located worldwide and are comprised on individual, digital asset exchanges and institutions. Validators are different from miners since their payments are not based on orders and validations.
According to the Ripples’ CTO David Schwartz, the architect behind XRP Ledger:
“The XRP Ledger is based on an inherently decentralized, democratic, consensus mechanism — which no one party can control.”
How Come XRP Decentralization Stands?
The cost of transactions is a good measure to determine the level of decentralization in any given crypto ecosystem. BTC and ETH miners are up in arms for better rewards. This has pushed the transaction cost of the assets to skyrocketed making them less attractive to investors. Soon, they will be rendered absolute real life use case payment systems.
Initially, BTC and Ethereum block rewards were high thus cushioning the transaction cost. Due to the platform nature, rewards are diminishing and this is set to compromise on the system security. If the PoW system cannot sustain the miner that keeps it secure, hackers are likely to have their way through. The shrinking mining force can be easily manipulated to put the systems at risk compared to a big force that cannot be compromised.
XRP is the opposite since the system can sustain itself without the mining function. And can still save on several resources including time and computing power. With the fee escalation function on the XRP platform, settlements are fast and costs low that will make the platform the future payment hub.
Who is in XRP Ledger Control?
The entire XRP network requires 80% of all validator support to run for 14 days. Currently, the network has around 150 validators each with one vote but can function optimally with 10. With BTC and ETH a single miner can have 51% vested hashing power which is not healthy for marketing leading platforms.
XRP 14 day wait period gives validators enough time for software update. This keeps the system secure since 80% is required to adopt changes initiated by the validators. This locks out any manipulation instances whilst keeping the system secure and running optimally.
Ethereum and Bitcoin are shifting to a more centralized corner while XRP is becoming the real decentralized outfit. XRP Ledger users have the power to remove untrusted validators from their UNLs, thus no groups or individuals can manipulate the system to serve their personal interests and this keeps the investor safe.
With the top XRP competitors facing a myriad of bottlenecks in their systems, XRP is becoming optimally operation al with time and this increases its decentralization. However, time will tell as platforms are still working on their process to impress the investors despite the ongoing crypto verse politics.