Justin Bons, the founder of Europe’s oldest cryptocurrency fund, Cyber Capital continues his attack on XRP, reiterating his claims that the 6th largest crypto asset by market capitalization is neither a decentralized digital currency project nor trustless.
According to him, “Ripple executives falsely claim that XRP is decentralized and permissionless”, claiming that the Ripple Foundation has de facto control over the entire XRP Ledger (XRPL) network as the governing body can take out any validator of the network at any time in a completely centralized fashion, he implied.
Bons’ argument stems from the fact that XRPL’s consensus algorithm is neither proof of work (PoW) nor proof of stake (PoS) where no entity can have excess authority on a blockchain network. Notably, the XRP network uses a unique consensus mechanism that is based on what is called Unique Node Lists (UNLs).
The UNLs is literally a list of trusted nodes released by centralized parties, including the XRP Foundation, Bons remarked. By design, nodes on the UNLs are untrusted and do not participate in consensus. Although he agreed that users can modify the UNL, choosing their preferred validators, the Cyber Capital founder wrote “There is no point in running a custom UNL list if that forks you off the network,” adding that this makes XRP Proof of Authority-based network and hence, not a real cryptocurrency.
He wrote, “This means that XRP is not trustless! As choosing who to trust is not the same as trustlessness! To make things even worse; if there is insufficient overlap between your UNL compared to the rest of the network, you will get kicked off. Therefore permission is required.” However, a prominent XRP proponent and blockchain developer Matt Hamilton countered his claims, stating that there is no central authority on the XRP Ledger network. Accordingly, Hamilton submitted that “Each node is responsible for their own UNL. No-one else. They choose the contents of that UNL and if they want to use a UNL published by a 3rd party. There is no central authority.”
In response, David Schwartz, the chief technology officer at Ripple, highlighted the flaws in Bons’ statements, maintaining that XRP is decentralized. David Schwartz added that his definition implies that all blockchain networks are not decentralized. Ripple CTO wrote:
“Does it fork you off the network or does it fork everyone else off the network? You’re essentially arguing that a network is centralized if it cannot somehow force people who want it to be centralized to accept a decentralized network.”
“No network could ever be decentralized by this definition because a decentralized network has no means to coerce people to accept anything they don’t wish to accept, including its decentralization.
“By the way, the reason there’s usually very close to 100% UNL agreement is that there’s literally nothing to fight over. Honest nodes just need to break ties, that’s it. You’re not arguing over which transactions are valid or who gets paid so there’s nothing to disagree over.”
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