Bitcoin, the world’s biggest blockchain, has attracted recognition from a range of mainstream investors and businesses, with a market capitalisation of over $900 billion. Ripple CTO David Schwartz, on the other hand, does not seem to be as upbeat.
In a recent interview with Techradar Pro, Schwartz indicated that Bitcoin is “doomed” to fail in its most critical project. According to the Ripple executive, the blockchain has struggled to “deliver a mechanism whereby citizens can trade openly with one another, without the intervention of some intermediary” during the last decade.
In reality, Schwartz cited Bitcoin’s core architecture to justify why he believes this is the case, with the executive saying,
“The design of the Proof-of-Work (PoW) consensus mechanism at the heart of the Bitcoin blockchain is such that true decentralization and disintermediation was never a possibility.”
A cryptocurrency, according to Schwartz, should be a one-sided market, with consumers finding both a store of value and a medium of trade. Bitcoin, on the other hand, has made it into a “two-sided economy,” he claims.
In the aforementioned interview, the executive went on to say that finding these issues with PoW was critical to the work undertaken by Schwartz and former Ripple executive Jed McCaleb in 2011.
“At the time, the philosophy for most people was that PoW was Bitcoin’s secret sauce, but the very first cracks in the foundation were beginning to show.”
XRPL was thus implemented after being based on the concept of a distributed agreement algorithm, one that is meant to execute the same core functions as PoW or PoS but without the drawbacks of PoW or PoS. The consensus algorithm merely creates orderly transfers without any cryptocurrency incentives, rendering the process cooperative rather than competitive.
Having said that, Schwartz wasn’t ashamed to find out his system’s biggest fault.
“The main issue with this approach is that the quality of network participants isn’t always as high. With no cryptocurrency rewards available, the network attracts a less reliable pool of participants who are more likely to drop off without any notice.”
To conclude, Ripple’s CTO presented his views on cryptocurrencies and regulations in place,
“In the years to come, cryptocurrency projects will preserve their roots in decentralization and disintermediation by providing a way for users to adhere to local regulation, but without mandating compliance.”
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