Is Ripple decentralized? Well, the fans have been seen arguing about Ripple’s decentralized nature in numerous tweets, and the debate is a long-standing one.
The article which he wrote raises more questions for the layman reader since it highlights the bigger cryptocurrencies instead of concerning the problems of decentralization and therefore benefits Ripple’s repute.
— logan (@logan9finger) September 10, 2019
Is Ripple decentralized in reality?
Decentranet is an advisory firm that connects investors and entrepreneurs and specializes in blockchain technology. While talking about Ripple being centralized, the Chief Decentralization Officer of Decentranet, Matt McKibbin shed some light on the matter.
McKibbin stated that Ripple allows financial institutions to perform transactions by the use of a distributed ledger which is not controlled by a decentralized network, but the Ripple Foundation itself. He added that this control solely benefits larger financial institutions and not the decentralized financial ecosystem.
While defining decentralized blockchains, McKibbin said that users should be able to access the decentralized network whenever they desire and that these networks are made to be supported by decentralized systems.
He explained that decentralized currencies and financial ecosystems solely depend upon ‘miners,’ and the miners’ influence and power rely on the system itself.
Understanding Ripple’s centralized nature
Ripple’s centralized nature can be affirmed by the fact that the XRP was pre-mined by Ripple Foundation, which is the sole entity that controls the network and XRP’s supply.
Initially, a hundred (100) billion XRP tokens were released, while sixty-three (63) billion XRP tokens are still in the possession of Ripple Labs.
As stated earlier, the use of a distributed ledger allows the transactions to be rolled back as opposed to the use of decentralized cryptocurrencies like the Bitcoin, which are unchangeable or irreversible.
Thus data that has been entered into the blockchain can not be reversed without the use of an enormous amount of energy or resources needed for ‘a fifty-one percent (51%) attack’. An attack like this is considered to be very costly and unlikely.