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XRP is nothing short than ‘fully decentralized,’ CTO of Ripple

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Ripple XRP
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Few projects are more controversial in the cryptosphere than Ripple. The project includes both a private company (Ripple Labs) and a cryptocurrency (XRP). It’s a company that aims to make profits instead of a foundation or an open-source community as it is most common in other projects.

Besides that, Ripple’s stated aim is to make cryptocurrencies useful for banks and financial institutions which is a very unpopular notion as Satoshi created Bitcoin precisely to get rid of them. Finally, because there is a private company behind the coin, many elements in the community distrust that the blockchain and the token are genuinely decentralized. 

That’s why CTO (Chief Technology Officer) of Ripple, David Schwartz, and former Chief Cryptographer has come forward to affirm that XRP has an “inherently decentralized nature.”

David Schwarz talks about XRP and decentralization.

We start at the beginning. The Merriam Webster dictionary defines decentralization as,

“dispersion or distribution of functions and powers.” 

That definition is somehow abstract and hard to apply clearly to situations that are as complex and subtle as any blockchain can be. Mr. Schwartz published a new report entitled “The Inherently Decentralized Nature of XRP Ledger” in which he describes the notion of centralization in the blockchain world as “wildly nuanced, misunderstood and, frankly, evolving.” He is apparently trying to set the record straight once and for all for the issue of XRP’s decentralization.

Ripple Labs mined all the XRP tokens before the currency went live which is a big difference from most other coins because it means there is no mining. In Bitcoin, or Ethereum, or most other projects, mining is going on, and miners get rewards for doing that work. Not XRP. 

In the Ripple blockchain validators that record and then verify transactions don’t have that kind of incentive. Schwarz describes these validators as being scattered the world over and including cryptocurrency exchanges, institutions, and individuals.

“Put simply, the XRP Ledger is based on an inherently decentralized, democratic, consensus mechanism — which no one party can control.”

Yesterday, Brad Garlinghouse, Ripple’s CEO used his twitter to give his blessing to Mr. Schwartz’s new report and called for an AMA session in which he would address this issue further according to the audience’s questions.

Schwartz shows how the 4 largest Bitcoin mining pools are in charge of 58 percent of the network, while Ethereum is in the hands of only three. He cites this as proof that XRP is significantly more decentralized than those coins. This statement comes in the face of the SEC’s position about Ethereum and Bitcoin, which is that they can’t be securities because no central organization can control them.

Another fact pointed out in the report is that something like 80% of all Bitcoin mining is done in China (which is a country that’s been very open to cryptocurrencies but quite hostile to Bitcoin) which could end up creating the risk of Bitcoin being influenced by a “single sovereign government.” Even worse is that the small number of big miners in BTC and ETH could make them vulnerable to a 51% attack, which means they could get hacked.

Unlike those two cryptos, XRP needs 80% of validators within the network to support a change in the ledger for a full fortnight until the change is definitive.

According to Mr. Schwartz, the Ripplenet includes 150 validators of which only 10 are operated by Ripple Labs. Every node can vote once only for every change at hand. These are awe-inspiring numbers, and it could support the case for China being able to gain control over Bitcoin.

The most critical guarantée for decentralization in XRP is that users in the ledger can select trusted validators’ list, included in a Unique Node List. This freedom to choose validator means, in Mr. Schwartz words that the Ripple’s XRP ledger “is and always has been inherently decentralized.”

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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your thorough research before investing in any cryptocurrency and read our full disclaimer.

Image courtesy of Asif Aman on Unsplash

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AZ FundChain Offers a Compelling Alternative to Traditional Crowdfunding

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AZ FundChain
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Although many tokens have collapsed during the ongoing altcoin apocalypse, the future remains bright for applications with real world usage.  Because of the ongoing bear market and limited trading opportunities, analyzing businesses with the potential to experience real world adoption should be the priority.  Part of that analysis should include looking at industries that need improvement.  During my analysis, one area that quickly popped up is the field of traditional crowdfunding and money circles.  And, as it turns out, AZ FundChain application offers a compelling alternative.

Problems with Traditional Crowdfunding

President Obama’s JOBS Act essentially laid the ground work for crowdfunding.  This legislation was passed in 2012 and included a provision for large groups of anonymous investors to fund startups.  It essentially gets around the dreaded “qualified investor” requirement that created a barrier for so many potential participants.  Crowdfunding is a great way for non-traditional businesses to raise funds for operating capital.  It certainly beats having to beg a bank for a loan, or, even worse, a loan shark.

But, as the common cliché goes, no good deed goes unpunished.  Traditional crowdfunding and money circles certainly have their fair share of problems.  The biggest problem is trust.  There are essentially very little checks and balances when it comes to how these companies will use the money that is raised.  Companies can promise the world but may not deliver…

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Why no one should be using banks

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why no one should be using banks
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If government is the devil, the bank is a demon.

It’s not your money anymore.

The moment you put your money on your bank account it becomes the property of the bank. Legally speaking you have just lend your money for minuscule interest. And since the money is not your, terms do apply, so you cannot withdraw all of them in one day, if the amount is high.

Government will know everything

Today banks are obligated to tell the authorities everything they know about you, including how much money you have, how you got it and where you spend it. The golden age of bank secrecy is over. Of course if you are a law abiding citizen, you might think that you have nothing to hide, but it’s not about hiding stuff. It’s about basic human right, and rightness for private life. The government should not be allowed to watch you.

Banks ask too many stupid questions

It’s your money, you rightfully earned them, but still you need to explain to the bank where you got it from and be shamed by them. The funny part is that after long and painful due diligence process the bank may still decline in providing service for you.

They can legally suspend your account or even steal your money

Laws are not made to protect people, they are made to protect the…

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Neteller to Launch a Crypto Exchange

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Neteller
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The way to make sure that the cryptocurrency momentum continues and that cryptocurrency credibility occurs is when big companies begin offering services based around cryptocurrency and other features of blockchain. This was certainly the case when Neteller recently announced it will offer a cryptocurrency exchange service in addition to its digital wallet services. The company announced that the 28 currencies compatible with the fiat wallet were able to buy, sell, and hold cryptocurrencies – including Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, and Litecoin. It makes sense to begin with Bitcoin and Ethereum as they are seen as the originators of what cryptocurrency and blockchain can do and also the future of how blockchain can be used, despite news that Ripple may be set to topple them all. Neteller’s move into cryptocurrency shows it has its sights set on a bright future of cryptocurrency and making it more accessible. But where do they stand now?

Neteller and Cryptocurrency

Neteller are optimistic about the exchange features of the digital wallet, claiming that they plan to add more cryptocurrencies in the near future. Neteller’s benefit is the ease at which one can begin their cryptocurrency trading journey. Not only do a range of banks offer services to fund the wallets and exchanges, but so do a variety of online payment options. This helps remove the barrier to entry that exists in…

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