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Expert take: Is Ripple really decentralized?

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ripple is centralized

Is Ripple really decentralized?

The digital currency world has now been heavily dominated by a huge list of virtual tokens. There was a time when the only digital token in this particular market was Bitcoins and it sure did make a powerful place for itself. Ever since the inception of the original solution of the Blockchain Technology in 2009, there have been way too many new players in the digital market like Bitcoin Cash, Litecoin, Ethereum, and what not. All these digital currencies flourish on the decentralized nature of their platform which enables a peer to peer electronic cash transfer system for its users where there is no central point of control.

Although not all of these digital coins have been able to make a space and mark for themselves in the digital market, one such name Ripple currently has the seventh highest market cap in the cryptocurrency industry. .

 

Strongly dominating

As mentioned above, the current valuation of Ripple has given it a certain power above the rest and its interesting to note that if you were to look at huge international companies like Uber and Airbnb, even they have a market valuation much less than Ripple. Both these companies fall short of almost $20 billion if compared with Ripple. This makes it a major player in the market. However, looking at the big picture, things always seem to be too good to be true and it seems like everything is going almost perfect for Ripple. But is there ever anything that is wholly perfect? Is there ever anything that is perfect with no loopholes or drawbacks to it? As one says that there are two sides to every coin, there is an ugly truth to Ripple too. Having analysed the finer details of this platform, it comes as a shock that this digital currency is in fact, not decentralized.

 

The finer details

Ripple was not exactly designed to be a coin. By the standard definitions, it does not even qualify as a normal digital currency. By tradition, digital currencies value a coin with equal priority and standing as with the security, applicability, speed and network scalability. Contrary to this stark feature of a decentralized digital currency, Ripple does not hold XRP (the digital currency for Ripple) a sort of asset for investment. It rather focuses on strengthening the blockchain to its maximum extent. Every element of XRP has been nipped and tweaked into an unrecognisable form in a bid to achieve this objective.

 

‘Trusted’ operators on the Ripple network

Yes, Ripple does have a digital wallet like all other cryptocurrencies and decentralized blockchains do however this does not give it the status of decentralized. Like other cryptocurrency and blockchain platforms, Ripple is not open source. The ‘trustless’ nature of Bitcoin and others is what enables individuals to have nodes of their own. Yes, Ripple does enable cryptographic methods to secure its users but the nodes that it protects are actually ‘trusted’ operators on the Ripple network thus making it more efficient but completely ruining it of its open nature. Thus the trust-less nature of any digital currency platform which actually allows it to be qualified as a decentralized platform is completely absent in the Ripple architecture.

 

Miners and Printers

Two remarkable features of any digital currency are the ability to mine those tokens via a process called mining and the inability of these tokens to be tethered to any deflationary asset like minted coins or printed notes. Again, Ripple fails in both these aspects. It has no mining or miners. Typically there should not be any separate entities running a network for its own personal agenda, however, the mining process and such has been deemed untenable and unaffordable by Ripple since they claim that it slows them down. This significant elimination takes it further away from the position of decentralized.

Moreover, with any other digital currency platform, if all miners wished, they could consensually shut down their computers and thus freeze the entire network. But the lack of such miners in the Ripple network makes it impossible for its users to do such a feat with it. Further, on top of not having a finite supply, Ripple tokens can also be printed. This makes procedures of payments, money exchange and other activities much more reliable when done via Ripple and helps it maintain a non volatile and stable constitution however, digital tokens are not supposed to have the potential of storage as an asset. This completely robs Ripple of its decentralized position.  

 

The Consensus Protocol

One of the most popular exchange desks, BitMEX, set up a research team to look specifically into the consensus protocol of Ripple and they came up with some rather scathing findings. They reported the presence of several complexities in the consensus protocol, the detailed inner workings of which they were not able to understand. They also could not make head and tail of the convergent properties that are vital for the consensus systems. Further in house testing revealed that Ripple could move the ledger forward since it had complete control over it which ultimately makes it centralized. Of course there is nothing wrong with a system being centralized, it is not a criminal offense, however, Ripple claims to be a decentralized network in its marketing strategies and in its terms of service which eventually means that Ripple has been making their business on false misleading information which thus makes it liable for suing.

 

It is centralised if you can sue it

When things eventually go wrong, Ripple can be sued. R3 Holdco filed a lawsuit against Ripple in the San Francisco court. The appeals court has denied Ripple’s efforts to expedite the appeal of resolving this particular lawsuit against them. Moreover, the case would soon be shifted to a New York court resulting which, Ripple would go through tremendous injury to its status. The lawsuit primarily states that Ripple failed to honor an agreement which would have given R3 Holdco the right to receive $1 billion XRP from Ripple. If we look at this from a different point of view, one would note that no one can sue Bitcoin. There is not central authority which is answerable or can be approached for redressals or can be challenged in a court of law. It is the decentralized nature of the platform which makes it qualify for such an independent form. However, this is not the case with Ripple. There is clearly a body in Ripple which has been dragged to court thus reclaiming the fact that Ripple is not decentralized.

 

Final verdict

Despite numerous marketing claims by Ripple stating and glorifying its business as decentralized, and making profits on that pretext, there is a massive amount of contrasting evidence that further cements the fact that it is in fact centralized. Such misleading claims can easily rid it of its glory and throw it into pools of despair and unreliability which would greatly affect its market value and reputation.

#Ethereum

Ethereum Updates: Proof of Stake, Zero Proof Prototype, JP Morgan and more

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The Ethereum Dev Con in Prague has just wrapped up in a flurry of news and announcements. Vitalik has made some tantalizing announcements about ethereum.

The Ethereum Devcon in Prague has just wrapped up in a flurry of news and announcements. Vitalik Buterin has made some tantalizing announcements about ethereum stating that Proof of Stake is not far away. The serenity updates will see Ethereum moving from a Proof of Work to a Proof of Stake system which will be exciting.

Estimates predict a possible 1000X increase in ethereum speed brings it up to 15000 transactions per second. The updates will also include improvements to the ethereum virtual machine, cross chain contract logic and much more.

 

Ernst & Young ETH Zero-Proof Prototype

Ernst & Young made an announcement on 30th October about the launch of EY Ops Chain Public Edition Prototype which is the first ZERO Knowledge Proof Technology on Ethereum Blockchain. According to sources, the prototype aims to improve the current barriers that prevail in the transactions.

– Company’s ability to conduct transactions on the Public Blockchain securely.
– Improving Blockchain Adoption
– Enabling a traceability trail of the private transactions.

The prototype is set to launch in 2019 and could prove to be highly significant for the upcoming security token industry.

 

JP Morgan ‘big believers’ in Ethereum

Jamie Dimon, the CEO and Chairman of JP Morgan who had earlier said that he did not give a s**t about Bitcoin has recently endorsed Ethereum of having the abilities to provide practical applications to the financial world.
The JP Morgan team is developing a product named as ‘Quorum’ which is defined as an enterprise-focused version of Ethereum. A significant use of the product will be the tokenization of gold bars.

 

Bancor: Ethereum and EOS Cross-Chain DEX

BancorX, a new platform by the Bancor decentralized exchange is now live and enables the conversion between ethereum and EOS based tokens on the blockchain. Currently, it allows the conversion of more than 110 tokens on both Ethereum and EOS blockchain. The BancorX project was established in collaboration with LiquidEOS, an EOS block producer. The project uses BNT tokens (Bancor Tokens) for the transactions. The BNT Token works on both EOS and Ethereum blockchain.

The working: When you convert an Ethereum token into an EOS token, it is first converted into BNT Token. After this, the BNT Token is transfered to the EOS blockchain and gets converted into an EOS Token.

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#Blockchain

How Blockchains are being implemented in Supply Chain Management

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A blockchain technology investment can be a turning point for supply chain and the reorganization of infrastructure and certification of trust in commerce.

Blockchain refers to a dynamic database which takes records of all events or data on a digital basis. It does this in a way which makes it impossible for interference. Blockchain users might have tried to at some point add to the data, access it or even scrutinize it. It is, however, unlikely to delete or change any data. This implies that the first and original data stays the way it is. Therefore, there is a constant trail of transactions information which is available and accessible to the public.

In contrast to conventional tools, blockchain transactions are not controlled by any organization. Blockchain operates on a record-keeping basis which ensures ease and security for businesses to carry out various sales and deals over the internet. Originally, blockchain was designed to carry out financial transactions.

Now, all forms of businesses are utilizing the blockchain ledger. This blockchain ledger is useful for purposes such as Verification, tracking and recording anything which has value. If the whole blockchain were a record of all transactions carried out in banks, then the bank statement of an individual would be just one block in the chain. Blockchain technology provides the easiest and safest way for companies, organizations, and businesses to complete transactions.

 

How Blockchains Impact Supply Chain Management

A blockchain technology investment can be a turning point for the reorganization of infrastructure and the certification of trust when in commerce. It is said to be the technology which will take us into the next industrial reformation. This coming revolution will see to the change in the mode of transportation, finance, supply chain and a host of others.

The supply-chain management is also known as supply network. This supply network involves a data collection of people and goods that participated in the trading process. It also consists of the record of the transportation or movement of the product from the manufacturer through the various networks and links, to the final consumer who needs it.

Several years back, the supply chain model was simple, and it was an easy walk-through because business operations were consummated locally. Taking a look at the supply chain in today’s world, it can be said that bureaucracies are the order of the day. The creation and distribution of goods are very complex. It is possible for the supply chain of a product to go through several stages, settings, accounts and the likes. It could also involve multiple individuals, and it could expand over a period.

The long-drawn processes involved in the supply chain make it a somewhat complicated process with several parties. It is quite difficult to trace illegal activities when the supply chain is very complicated. So, it is possible for events of this sort to go on for a very long time without the knowledge of anybody. Blockchain technology has the potential to bring great transformation to the supply chain.

 

How Blockchains Can Enhance the Supply Chain

Blockchain technology gives room for tracking all forms of transactions securely and transparently. The best cryptocurrency exchange platforms around the world have demonstrated how efficient the blockchain can be. This could also be replicated in the supply chain. Anytime a product is up for sale; the transaction will be recorded as it goes through the necessary channels. This trail is permanent, and it stands for the product’s stable history

This innovation would help to reduce time lag, additional costs and possible human errors which are likely to occur in a conventional everyday transaction. Some supply chains are already utilizing this technology. Financial experts and analysts have previously predicted that using blockchain technology could facilitate a universal supply chain system.

Regarding recording, the number of assets and their transfer and movement within the supply chain would be documented. It is impossible for the records on blockchain to be erased, and this ensures transparency in the supply chain. Blockchain also provides that there is no disagreement on the chain, as all participating parties have the same sample of the ledger. This transparency also transcends to the lessening of fraud when it comes to goods which are highly valued. Such products include precious stones and drugs.

Companies can utilize blockchain technology to have a grasp on how every used item and the finished goods, passed through the entire process of manufacturing. So companies would be able to communicate better with the consumers by either decreasing the amount or eradicating the effect of sham products.

Also, when it comes to the tracking of essential details such as the purchase and delivery orders, blockchain technology can help. The same will suffice for the receipt and other documents involved commerce. Blockchain can effectively track down every detail. Organizations can make their physical assets digitized hence setting up a record of every transaction. As expected, each recorded transaction is accessible to all, and therefore all assets can be effectively monitored.

 

Integrating Blockchains Into a Supply Chain

For the successful application of blockchain technology in supply chain management, some factors have to be set in motion. First and foremost, the companies and organization involved must have a grasp of possible risks. This is essential because all the weak points would be noted and plan to contain them would be made up.  This is a retorted line of thought when new programs, software or processes are under implementation in an ecosystem,

The most likely set of plans will be able to spot the weak points in the resultant use of blockchain technology. Now, companies and organizations need to commence basically by first applying these solutions to the weak points. Once this is seen to be yielding positive results, then further application can be made to other aspects. Many change agents will implement a walk-through test to be sure that the expected results are seen.

For a company or an organization to achieve success with the use of blockchain in the supply chain, there is a need for the company to first, set up a blockchain for the company internally. At first, everyone might not be used to it, as it is expected of new technology. However with time, everyone will commence its application, and progress would be attained.

Also, the company should ensure that all its contacts such as suppliers and the likes, participate in the blockchain movement. This collaboration is essential if proper transparency and easy-to-track procedures are in view. Again, it would surely be difficult to carry out, but possible to implement. However, as an organization, it is essential for you to partner with organizations who embrace any innovative technology.

Once this is completed, then every partaker in the supply chain can be involved since every data can be made available. Blockchain technology in the supply chain management is already gaining grounds in some companies. Those companies who have not started its utilization are encouraged to take a cue from their fellow field players who are already enjoying the benefits.

In the long run, if blockchain technology will afford us the opportunity of tracking all transactions. As a secured platform, it implies that the possibilities it possesses in the supply chain are limitless.

 

Author Bio:

Denise Quirk is a Health Advisor who is fascinated by Crypto and Blockchain Revolution. She is a believer in transforming complex information into simple, actionable content. She is keenly interested in finding the value of the crypto world. She writes for Coin Review, Bitcoin Warrior, Irish Tech News, etc. You can find her on Linkedin, Twitter, and Facebook.

 

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#Bitcoin

Economists: Huge Cryptocurrency Boom Predicted, US Dollar likely to fall sharply in 2020

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The increasing debt of the US Government which is currently around $21.7 Trillion will certainly cause cryptocurrency to rise sharply.

Erik Voorhees, The Chief Executive Office of Shapeshift Wallet and Exchange says that the increasing debt of the US Government which is currently around $21.7 Trillion will certainly cause cryptocurrency to rise sharply.

Erik said:
“When the next global financial crisis occurs, and the world realizes organizations with $20 trillion in debt can’t possibly ever pay it back and thus must print it instead, and thus fiat is doomed. Watch what happens to cryptocurrency.”

According to Eric Voorhees, the government will be forced to print the excessive amount of currency to repay the debt and thus this will surely lead to a hyperinflation eventually leading to the fall of USD.

 

Financial Institutions in great anxiety

BlackRock Investment Management Company which is the world’s largest asset management firm expressed its concerns in relation to the fast-growing debt of the US government.

BlackRock Chief Executive Officer Larry Fink expressed his concern stating that:

“That could be the real issue related to everything: where we have interest rates becoming too high to sustain the economy with its growth rates.”

A large number of financial economists predict that a major financial crisis is going to occur in 2020 because of the rapidly increasing interest rates of the US Federal Reserve and that this will surely lead to a rapid decrease in the value of USD. Economists believe that in such a state the people are likely to invest in assets such as gold and cryptocurrency that are independent of the global economy.

As ten years have passed from the day bitcoin came into existence, Vinny Lingham the CEO of Civic Blockchain expressed that the next ten years will be more wealth generating than the previous ones.

 

What do you think about the upcoming predicted financial crisis and how do you think cryptocurrency will play a major role in tackling the same? Tell us in the comments section below.

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