Is XRP Ledger Centralized? Ripple CTO Responds to Critics

Schwartz clears misconceptions about the centralized nature of XRP Ledger.

Ripple CTO David Schwartz recently took to Twitter to rebuff assertions from Cyber Capital Founder Justin Bons, alleging that XRP Ledger (XRPL) is centralized. In a November 2022 tweet, Bons said XRP community members are being misled by Ripple executives who continue to claim that XRPL is decentralized. 

According to Bons, the XRP Ledger blockchain is centralized based on its permission blockchain architecture. 

1/14) I thought it was common knowledge that Ripple is centralized

Turns out their community is being lied to & misled by Ripple executives

Convincing them that XRP is decentralized!

When in reality, it is based on permissioned nodes explicitly selected by the XRP foundation:

— Justin Bons (@Justin_Bons) November 30, 2022

The founder of Cyber Capital argued that decentralized blockchains rely on cryptographic proofs of positive incentives, which could stem from work or stakes. He noted that XRPL does not possess any of the attributes inherent in the Proof-of-Work (PoW) and Proof-of-Stake (PoS) chains, thus making it a permissioned federation, not a decentralized blockchain.  

Reacting to the post, an XRP community member called on Ripple’s CTO to comment. Surprisingly, Schwartz noted that he had already addressed the issue in a previous tweet. 

I did in a few places. Here’s one:https://t.co/UHd4yTp3pT

— David “JoelKatz” Schwartz (@JoelKatz) April 28, 2023

Schwartz’s Reaction

In a tweet, Schwartz first explained the concept of PoW blockchains that make them decentralized.

“PoW blockchains are decentralized because everyone enforces the rules, nobody has any special power to change the rules, and it is not possible to censor transactions other than over very short periods of time,” said Schwartz. 

The Ripple CTO explained that XRPL achieves the same level of decentralization as PoW blockchains. However, XRPL performs decentralized functions differently.  

According to Schwartz, XRPL uses consensus to agree on transactions to process as a group. He explained that if a transaction is seen as perfect, then honest participants will agree to include it, but if the transaction is imperfect, it will be delayed to the next block round. 

XRPL More Decentralized Than PoS Networks

Schwartz pointed out that XRPL’s consensus feature makes the blockchain more decentralized than Proof-of-Work systems, where one person can decide which transactions are included in a block.

He added that XRPL transactions are cheaper than PoW and PoS blockchains because there is no need to pay miners or distribute rewards to people who stake their assets.

“I do think this makes better decentralization because nobody has any special right to receive rewards or control transaction flow,” he added.