David Schwartz, Ripple’s CTO (Chief Technology Officer), spoke in a recent interview about the advantages of the XRP Ledger consensus mechanism over Bitcoin’s PoW (Proof of Work) consensus mechanism.
David Schwartz Said Bitcoin’s PoW isn’t as Decentralized as Some Belief
A few days ago, Ripple’s CTO made comments on Bitcoin and XRP during a zoom call from TechRadar Pro.
Schwartz said that having miners participating in Bitcoin’s PoW consensus process means the payment network you own isn’t as decentralized and disintermediated as some believe:
“A cryptocurrency should be a one-sided market; the users want a store of value and a means of exchange. But what Bitcoin did was turn it into a two-sided market.”
“Miners have historically fought for high transaction fees because that’s their revenue. The reality is that you have another set of stakeholders who are trying to charge the highest fees they can get away with, and that’s not much different from the way payments work at a bank.“
After Schwartz and his former colleague Jed McCaleb found out about the PoW problem in 2011, they decided to try some ways to improve speed and decentralization:
“What we were starting to think was that PoW wasn’t what was amazing about Bitcoin. It was the fact that all transaction data and transaction rules are public and that there is no central operator.“
“What we did is radically trust-minimize the system, eliminating the incentive to attack the network.“
“The way we designed the XRPL is that the consensus algorithm just puts transactions in order. There are no cryptocurrency rewards, so the process is cooperative as opposed to competitive.“