One of the biggest arguments against the XRP Ledger and the accompanying token is that it is centralized. This argument is beginning to become weaker as the number of third-party validators on the Ripple network is increasing.
Validators are members on the XRP Ledger that determine whether transactions meet protocol requirements, thus determining their validity. They also agree on the ordering of a group of transactions, so as to avoid double spending of the token.
The Ledger also has a feature known as Unique Node Lists, which are a list of validators that “a given participant believes will not conspire to defraud them”. The participants can choose different UNLs depending on their belief in the quality of the validators.
Historically, Ripple Labs Inc., the company currently managing the XRP Ledger, has hosted validators to ensure the smooth functioning of the system. This has changed recently.
Currently, according to data from the XRP Charts website, out of 18 trusted validators, 4 of them are the third party. This is a big step forward for decentralization as Ripple’s UNL is comprised of only 77% of their own validators. This means Ripple, the company, cannot unilaterally pass amendments to the Ledger without the help of a third-party validator.
The third-party validators in question are
Bahnhof AB, a Swedish Internet Service Provider, WorldLink US, a technology firm based in Texas, Telindus Telecom, an Information and Communication Technolgy firm based out of Luxembourg, and Flagship Solutions Group, which provides IBM solutions, managed services and cloud solutions worldwide.
According to Ripple themselves, the Ledger requires 16 third-party validators to match the decentralization of coins such as Bitcoin and Ethereum, with 17 required to be more decentralized than them.
In one of their blog posts on the subject, Ripple said:
“As we continue these initiatives to further decentralize the system, XRP Ledger will inherently become even more resilient…In other words, XRP Ledger will not just meet, but exceed the decentralization level of other public blockchains.
Twitterati Michael B stated:
“correct me if I’m wrong… this further separates Ripple from #XRP in several ways and does this also widen the gap where the SEC is concerned… something more to hang their hat on so to speak”
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