Cloud Hosting

Ripple executives join the discussion on whether XRP is sufficiently decentralized.

Following the release of the much-contested Hinman documents, the cryptocurrency community has continued to debate whether XRP is sufficiently decentralized.

For context, when the former director of SEC Corporation Finance, William Hinman, gave the infamous speech at the Yahoo All Market Summit on June 14, 2018, he disclosed that an asset should not be classified as a security if it has become sufficiently decentralized from its time of creation. It was on this premise that he declared Ethereum as a non-security.

Hinman also listed certain decentralized factors people must consider when making these sufficiently decentralized determinations.

After Hiinmans doc release, people have been arguing whether XRP is sufficiently decentralized. Some say that the coin is not decentralized because of Ripples alleged control over the asset, as the blockchain companycurrently holds a substantial amount of XRP in escrow.

This has continued to stir the argument that XRP and its native blockchain XRP Ledger (XRPL) are centralized or not sufficiently decentralized.

In response to these allegations, Ripples CTO David Schwartz noted that those who claim XRP is not sufficiently decentralized due to Ripples control have not been able to prove how the blockchain company could exploit that control to cause investors harm. He asserted that it cannot be done.

As expected, Schwartzs remark prompted a series of reactions from cryptocurrency enthusiasts. A Twitter user named John B stated that Ripples return of unspent XRP back to escrow is on the honor system.

If 10% was routinely put into a seemingly legit project where it was used to manipulate the price, selling at period highs and buying to maintain a trend, the user added.

In response, Schwartz affirmed that Ripple holds a huge amount of XRP. He added that if people believe that one party having a huge amount of a blockchain native asset makes it less decentralized, they can also conclude that XRPL is less decentralized, given Ripples control.

He clarified that holding vast amounts of a blockchain native asset does not grant the party control over the governance or ledger.

Schwartz has been involved in a series of decentralization discussions in the past. Two years ago, heasserted that Uniswap, a famous DEX, is not decentralized. Per Schwartz, any crypto project with an enforceable legal right to tell people how they use it is not decentralized.

Meanwhile, Ripples General Counsel Stuart Alderoty also joined the decentralization discussion on Twitter. The outspoken General Counsel noted that decentralization is a technological standard, not a legal one.

Alderoty referred to Hinmans made-up decentralization factors. According to Alderoty, Hinman and the SEC came up with these factors to brush aside the actual legal requirements of determining which asset is a security under Howeys analysis.

Follow Us on Twitter and Facebook.

Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basics opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.

-Advertisement-

Read the original:

Ripple CTO and Legal Counsel Join XRP Decentralization Debate - The Crypto Basic