One of the issues casting a shadow on the XRP cryptocurrency is just how decentralized it is. After all, Ripple owns the lion’s share of XRP’s supply and relies on the cryptocurrency to power its cross-border payment products.
Ripple CTO David Schwartz, however, insists that the blockchain startup is not pulling the strings on the cryptocurrency.
Schwartz participated in a Quora session, saying in response to a question on whether XRP is controlled by Ripple:
“Absolutely not. The XRP Ledger is open source technology with a robust community of developers, so if Ripple were to vanish, XRP and the XRP Ledger will remain.”
— Quora Sessions (@QuoraSessions) March 29, 2019
Schwartz’s defense of XRP being separate from Ripple is three-pronged:
- Utility — XRP fuels payments and can do so with or without Ripple’s products.
- Ownership – Investors who hold XRP do not own any equity in Ripple.
- Decentralization – Ripple runs fewer than 10 of more than 750 validators that authenticate transactions on the XRP ledger.
He is candid when he says that dumping XRP supply on the market would not only be bad for investors but it would hurt Ripple, too. At year-end 2017, Ripple earmarked 55 billion of its XRP supply for an escrow account to alleviate worries about this. The blockchain startup has also made further decentralization a priority, he says.
Schwartz on IBM’s Partnership with Stellar: It Misses the Point Completely
When asked about IBM’s partnership with Stellar, Schwartz didn’t hold back:
“It misses the point of blockchain completely.”
The Ripple CTO goes on to explain how “IBM, SWIFT, and the rest of the old guard attempt innovation with blockchain but do not solve the centralization issue.” In Big Blue’s case, the tech company is responsible for approving validators on Stellar, which gives it control of the network.
Schwartz, who was part of a trio that created XRP in 2011, went on to criticize “centralized stablecoins” for bank transactions, suggesting that a USD-backed stablecoin doesn’t have the potential to achieve mass adoption. IBM recently announced the addition of six international banks that will use the Stellar blockchain for stablecoin and XLM-fueled payments. Of course, Ripple execs have to downplay these products as they are competition for the blockchain startup’s XRP-powered cross-border payment products, as is JPMorgan’s JPM Coin.
State of crypto markets
As bitcoin price hits $5,000 for the first time in 2019 and the crypto winter seemingly in the rear-view mirror, the community wants to know about the state of crypto in 2019. Ripple’s Schwartz lands somewhere between cautiously optimistic an bearish:
“Certainly there are a lot of bad ideas being built around cryptocurrency and it’s possible the market is reflecting the recognition of this reality.”
He also pointed to the correlated nature of cryptocurrencies with bitcoin, and XRP is no exception. Schwartz says market volatility has become a hurdle to builders entering the space.
Incidentally, Schwartz’s Q&A on Quora came on the heels of the platform deleting one of his answers last month. While it appears to have had nothing to do with Ripple or XRP, Schwartz seemed proud to join the deleted comment group.
— David Schwartz (@JoelKatz) March 21, 2019
Ripple employs more than 300 people and the blockchain startup is currently hiring. We hear the snacks are “top notch.”