Key Insights:
- XRP, Stellar, and Hedera face scrutiny over validator control and network design.
- Ripple CTO rejects double-spend and censorship claims, defends XRPL model.
- The debate focuses on UNL coordination, risk regulation, and decentralization standards.
XRP, Stellar, and Hedera are under fire after a public dispute broke out over claims of centralization. The debate unfolded on X between Cyber Capital founder Justin Bons and Ripple CTO David “JoelKatz” Schwartz. Their exchange focused on validator structures, consensus models, and the risk of censorship or double-spending.
Bons went on to say that some networks are based on permissioned elements. He called XRP, Stellar, Hedera, Canton, and Algorand. He argued that such systems rely upon validator lists or controlled coordination.
Schwartz rejected the description of XRP as being centrally controlled. He said the claims were wrong and advocated for the XRP Ledger‘s consensus process.
XRP, Stellar, and Hedera Under Fire Over Validator Structure
Bons stated that XRP uses a “Unique Node List” (UNL). He said divergence from the list could lead to a fork. According to him, this structure gives the Ripple Foundation and the company influence.
He made similar claims about Stellar and Hedera. Bons said Stellar publishes “recommended Tier 1 organizations” through the Stellar Development Foundation. He also described Hedera’s validator set as permissioned.
Schwartz disputed the idea that XRP validators can double-spend or censor funds. He said an honest node would not agree to a double-spend. He added that the nodes count the validators they agree with during consensus.
Schwartz explained that if a validator attempted misconduct, honest nodes would treat it as disagreement. He said validators could conspire to halt the chain from some perspectives. However, he stated they could not force a double spend.
Schwartz likened that scenario to an attack on Bitcoin by an honest majority. He said the XRPL equivalent would stop consensus, not rewrite history. He also added that part of the solution would be to pick a new UNL.
Bons replied that selecting a new UNL is a coordination issue. He argued that in XRP, centralized publication meets that challenge. He likened it to Bitcoin nodes rejecting a 51% attack but being off the canonical chain.
XRP Consensus Design and Double-Spend Debate
Schwartz explained how XRP solves the double-spend problem. He said nodes enforce all transaction rules independently. However, he noted that double-spending requires agreement on transaction order.
He said XRPL runs a live consensus round every five seconds. During each round, validators vote to include transactions. Nodes can defer a valid transaction to the next round if others did not see it before the cutoff.
According to Schwartz, a UNL serves two purposes. First, it prevents malicious actors from creating unlimited validators. Second, it avoids validators that refuse to participate in consensus.
Schwartz said validators cannot force nodes to enforce new rules. He added that feature activation requires coordination but not validator control. He stressed that Ripple designed XRPL so the company could not control it.
Schwartz also cited regulatory concerns. He said Ripple must comply with U.S. court orders. Therefore, he argued the company intentionally limited its own authority over XRP.
Censorship Concerns and Ongoing Dispute
Bons raised censorship scenarios tied to regulatory pressure. He mentioned potential compliance with OFAC transaction lists. He argued that legal pressure could influence validator behavior.
According to him, Bitcoin and Ethereum have not been censored, but transactions have been delayed. He further stated that, in his opinion, XRP is not a permissioned one. He referred to the publication of validators as being an authority.
Bons explained that he did not say that XRP can generate a new supply. He confirmed that XRP cannot steal money. Nevertheless, he insisted that under specific circumstances, there are dangers of double-spending or censorship.