Cyber Capital Founder: Ripple is completely centralized, please stay vigilant
Justin Bons believes that XRP is not a cryptocurrency.
Source: Justin Bons X account
Author: Justin Bons , Founder of Cyber Capital
Compiled by: Luffy, Foresight News
Ripple (XRP) is a centralized and permissioned network, contrary to the claims of its executives. XRP misleads investors by falsely presenting its decentralized nature, while in reality, the network is entirely controlled by the foundation.
XRP consensus is based on UNL (Unique Node List), where trusted nodes are determined by centralized entities (including the foundation). XRP consensus is not based on PoS or PoW, but rather on PoA (Proof of Authority), yet they claim to be more decentralized than Bitcoin and Ethereum…
All of this is theoretically supported by Ripple's own documentation, and it is hard to find any researchers outside of XRP who would call this design "decentralized"; however, they are deceiving the public.
However, users can modify their own UNL and choose whom to trust. The language here is subtle. Truly decentralized cryptocurrencies are "trustless," as there is no need for any "trust"; choosing whom to trust is entirely different from being trustless!
XRP is not trustless at all, and worse: if your UNL overlaps insufficiently with the rest of the network, you will face risks. According to Ripple's documentation: 90% UNL overlap is required to prevent forks.
This means that in practice, direct permission from the XRP foundation is needed to participate in consensus, which is nearly centralized in terms of blockchain design… Now, let’s delve deeper into these UNLs.
We have established that the UNL is ultimately a trusted third party chosen by the XRP foundation, and our deeper study of these UNLs has further confirmed this: for a long time, there was only one UNL, namely the dUNL managed by the XRP foundation.
However, this list is not static but dynamic. The XRP foundation can change the validator list in a completely centralized manner without any notice, kicking out anyone who violates authority.
Over time, there are now two UNLs, namely dUNL and XRPLF, both directly funded by the XRP foundation. This adds another layer of de facto control over the network; let me explain:
Blockchains allow various parties that do not trust each other to coordinate, thanks to the underlying incentive mechanisms (PoS or PoW). However, XRP has no block rewards or incentives; it is purely based on trust, so how do different UNLs coordinate with each other?
XRP's claim is based on the idea that different parties can spontaneously organize around a new UNL list without the aforementioned incentive mechanisms. Clearly, this is nonsense, as this is precisely the problem that blockchains aim to solve; new UNLs cannot achieve coordination.
If new UNLs cannot coordinate, it means the foundation has de facto complete control, and control over validators equals control over the network, which resembles a consortium chain.
In all other blockchains, you cannot choose validators because they are trustless and permissionless, which is why validators can remain anonymous, as it is secured by cryptoeconomic game theory rather than trust; this is the fundamental difference with XRP.
XRP is not a cryptocurrency at all. Since it is neither PoS nor PoW, it is a PoA; otherwise, what else could it be? Consensus algorithms require a verification mechanism, and trust is the foundation of this system, therefore: XRP is a PoA!
PoA systems always have a central authority to appoint validators. So, what about the fact that there are currently two "official" UNL lists? Doesn’t this refute my assertion that different UNLs cannot coordinate? This is where things start to get really crazy:
Upon closer inspection, I found that all UNLs are actually identical, using the same set of validators, further proving that the foundation actually has complete control over the XRP network!
This screenshot is from two years ago, but I confirm that the situation remains the same, proving that new UNLs cannot coordinate with each other. Thus, the foundation's list becomes the de facto list, as all UNLs must comply, or they risk being forked.
This also allows the foundation to conduct censorship when forced, as they have such a high degree of control. This is fundamentally different from how cryptocurrencies operate and explains why only 20% of validators can stop the network…
Running trusted validators comes with no rewards. Unlike PoW or PoS, where the cost of attacks reflects block rewards to miners/stakers. This is why decentralization metrics are highly correlated with block rewards. On XRP, this decentralization metric is zero.
I have been studying XRP since its early days, and I clearly remember that people recognized the trade-offs of decentralization. As the community and leadership's claims became more extreme, this situation gradually changed; I say this not to belittle investors but to empower them.
Help break the XRP echo chamber and stop being the exit liquidity for others. XRP's pre-mining rate is as high as 99.8%, making it one of the most unfair distributions in history, as no new XRP was created; all newly circulating XRP was purchased from the founders.
I have always been interested in early discussions about Ripple's decentralization; pretending that XRP is permissionless is not the right answer. The real solution lies in replacing the UNL list with PoS, transforming XRP into a more traditional decentralized blockchain.
They could also honestly acknowledge that facts are facts, and I would not contest that. However, attracting ignorant retail investors with lies is wrong, and this is where we as an industry need to draw the line and self-regulate!
XRP may currently bribe or deceive the SEC, but they cannot deceive us, the crypto natives. No matter how complex and in-depth the rebuttals are, it does not change some simple facts: XRP is now completely permissioned and centralized.
If you truly care about XRP, take it seriously. Because within this critical post lies a solution that could help XRP succeed: either admit its centralization or turn towards decentralization. The truth sets us free; leave XRP or apply pressure for change; nothing is irretrievable.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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