David Schwartz, the CTO of Ripple, spoke to the News and Research Team from the McCombs School of Business at The University of Texas in Austin and explained the key differences between the XRP Ledger’s consensus and Proof-of-Work [PoW] protocols.
Schwartz said that they started by building a “Federated Byzantine Agreement Model”, which was considerably different from Bitcoin’s Proof-of-Work. He said that their model had different characteristics than Bitcoin’s PoW, making it better suited for the cross-currency system.
“The miner who mines a particular block gets to choose every transaction in that block, so those are sort of a dictator-of-the-moment and they are completely self-interested, they are not trying to help you out, they are trying to help themselves out.”
Schwartz said that on the XRP Ledger, transactions were picked by validators in an unbiased manner. If a transaction was ever deemed biased, the users would stop considering them as validators and move on to another validator. Schwartz said,
“So we built the ledger from the beginning as a multi-currency ledger, and I think that we built in peer-to-peer credit and lendings to people and I think that is probably the key difference between XRP’s consensus mechanism and Bitcoin’s proof-of-work.”
Explaining this in one of his blogs, David Schwartz stated:
“The XRP Ledger is and always has been inherently decentralized because the users always retain the freedom to change their UNLs and the corresponding validators that they trust… the XRP Ledger is in many ways a more transactional, functional and decentralized ledger than either Bitcoin or Ethereum, which will only increase over time.”
The XRP Ledger is far more superior than that of Bitcoin’s blockchain due to several facts like the transaction cost, transaction speed, and scalability. XRP Ledger can process a transaction in less than 4 seconds, while Bitcoin transactions take between several minutes to hours to complete a transaction.
Moreover, XRP scales far better than Bitcoin as the XRP Ledger can handle 1,500 TPS (transactions per second) load.
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Akash is your usual Mechie with an unusual interest in cryptos and day trading, ergo, a full-time journalist at AMBCrypto. Holds XRP due to peer pressure but otherwise found day trading with what little capital that he owns.