The cryptocurrency world now has become rich with the variety of coins evolved in past few years. Cryptocurrencies are dominating the digital world. Bitcoin was the only cryptocurrency in the market and so it has become a powerful coin in the cryptocurrency world. Since the blockchain emerged with the popularity of Bitcoin, many new digital coins evolved. Litecoin, Ethereum, Bitcoin all the altcoins and digital coins are all cryptocurrencies which use blockchain as the core technology. One such coin is Ripple. Ripple needs no introduction. Not just the cryptocurrency investors know about ripple but beyond.
Ripple as a digital currency
Ripple is a digital currency which has managed to secure the second position in coinmarketcap. Grabbing this position and maintaining the same is not easy. So, there must be something with ripple. Ripple aims to make the payment system fast, reliable and cheap for users.
Initially, the ripple was not designed to be a coin. Ripple later adapted Blockchain technology and emerged as XRP tokens. As a cryptocurrency ripple is always in news. Ripple in 2017 was one of the most profitable coins and so the coin is very much loved. Every coin has two faces and the popularity comes with the critics as well. The coin is much popular for its functionality and at the same time criticized too.
As per some experts, ripple doesn’t fit into the criteria of cryptocurrencies and for some it does. Some claims that Ripple is centralized while other claims that it is decentralized. With ripple, there is no Black or white but grey. Ripple has always been in news for some or other reasons.
Is Ripple Centralized or decentralized?
Though ripple is in controversy one thing which is very clear is that Ripple is a digital coin and there is no other aspect of this. The major point of controversy is that if the ripple coins are centralized or decentralized.
Decentralization is one of the very important features of cryptocurrency. In crypto world, decentralization means there is no central authority to manage any aspect of the coin. This clearly means that for a decentralized system there will be multiple nodes located at the different part to manage the system. Decentralized technology is exactly opposite to banking system where one single entity is the regulator of transactions. Centralized coins are blockchain based and highly secure due to no single regulatory authority.
Miners mine the coins based on various algorithms and are rewarded for them like Bitcoin. Bitcoin was the first decentralized token using blockchain as the medium. Various alternate cryptocurrencies have been launched after bitcoin and are termed as altcoins.
In terms of ripple, there have been many reports claiming that Ripple is centralized and ripple itself claims to be decentralized.
In recent years, ripple had to face many lawsuits against its claim to be decentralized. There are a lawsuits files against ripple by R3 Holdco in the San Francisco court to which ripple filed appeal to expedite the resolution. These lawsuits and claims are obviously going to hamper the status of Ripple in the market.
Unlike bitcoin and other cryptocurrencies, ripple cannot be mined. This makes ripple odd one out. Being a decentralized system there should not be any third entity to regulate the network. Ripple claims that the mining process makes their system slow and so the feature is not integrated with ripple.
Ripple token or coins can be printed. Ripple aims to smoothen the payment system and is very close to it. However, a physical token of a digital currency is a contradictory fact. With its name, it is clear that the coins are virtual with no physical existence. This clearly establishes a distance between ripple and decentralization.
Ripple holds the power to freeze the accounts of users. Though the company cannot take away ripple from the users but can freeze their account to make them stop trading Ripple. One such example is when the company did freeze the account of Jed McCaleb, one of the ripple co-founder. Well, this is not what we expect from a decentralized system.
Another controversial point is that ripple has five nodes or public keys. These public keys can be downloaded from the server of ripple. As the keys can be downloaded from the servers of Ripple, ripple undoubtedly is one single control system to regulate the ripple ledger.
Is it really decentralized?
Ripple ledger is decentralized and was always since ever. There are a number of validators in Ripple ledger which uses unique node list to validate the transactions. These users hold the freedom to change this unique node list if required. No single validator holds any power on XRP ledger and it is distributed.
Ripple claims that it is more decentralized than Bitcoin and Ethereum. XRP uses consensus protocol which requires validators to verify and record any transaction. These validators are spread across the world with a range of institutions, organizations, and individuals. Ripple ledger uses 80% of the validators to validate any change or transactions. This makes Ripple decentralized.
It is very much clear that Ripple is not as decentralized as it should be however saying that ripple is completely centralized would not be right. The company is working on this and is working on various strategies to eliminate the doubt and make the system more decentralized.
Being centralized is not a crime and cryptocurrencies can be centralized too. If ripple claims to be decentralized there should be proof of it. XRP ledger has many more features than decentralization which makes it more popular and reliable. Ripple is dealing with the critics and lawsuits and still maintaining its position which is really commendable.