The Federal Reserve Bank of Atlanta recently released a report which categorized “Ripple” as a permissioned blockchain, eliciting reactions from Ripple’s CTO.
David Schwartz, the Chief Technology Officer at Ripple, has reacted to a recent report from The Federal Reserve Bank of Atlanta, which categorized “Ripple” as a permissioned and private blockchain. The report contrasted the network with Ethereum, which it considers public and permissionless.
ScamDetective, an acclaimed on-chain scam detector, first called the public’s attention to the report in a recent tweet.
The Atlanta FED released a report on Web3 and decentralized finance protocols the other day.
Ripple even got a small mention under the permissioned / private section, along with Corda and Hyperledger. pic.twitter.com/nWj3mvijyk
— 𝕾𝖈𝖆𝖒𝖘 𝖆𝖗𝖊 𝖇𝖆𝖉 🗝 91.22% (@ScamDetective5) May 26, 2023
The report, titled “An Introduction to Web3 with Implications for Financial Services,” highlighted the provisions of the Ethereum blockchain and rightly called the chain a private and permissionless network. However, in an attempt to contrast Ethereum’s permissionless nature, the report categorized “Ripple” as a private and permissioned blockchain.
Commenting on the article, David Schwartz expressed his curiosity about the thoughts behind its content. He questioned whether the authors mistakenly believed that the XRP Ledger (XRPL) is private or permissioned and erroneously referred to it as “Ripple.” Additionally, Schwartz pondered whether they misunderstood RippleNet as being a blockchain.
“I wonder what they were thinking about here. Did they think that XRPL is private or permissioned and called it “Ripple”? Did they think that RippleNet is a blockchain? Or what?” Schwartz remarked.
I wonder what they were thinking about here. Did they think that XRPL is private or permissioned and called it "Ripple"? Did they think that RippleNet is a blockchain? Or what?
— David "JoelKatz" Schwartz (@JoelKatz) May 27, 2023
Is the XRP Ledger Permissioned?
For context, a permissioned blockchain is a network where access and participation are restricted to a specific group of known and authorized participants. It offers more control and privacy, making it suitable for enterprise use cases that require restricted access and confidentiality.
In contrast, a permissionless blockchain allows anyone to join and participate without permission. It operates in a decentralized manner, where participants collectively validate transactions. Permissionless blockchains prioritize transparency and censorship resistance, making them ideal for public use cases where trust and inclusivity are important.
Claims that the XRPL is permissioned have recently risen, but Schwartz and other XRP proponents have swiftly debunked them. As disclosed by The Crypto Basic, a community member previously argued that the consensus mechanism of the XRPL makes it permissioned. Schwartz dispelled this assertion.
Ripple Stresses XRPL’s Independence
Meanwhile, Ripple has continued to emphasize the independence of the XRP Ledger (XRPL) despite its close ties with the network and its native token. The firm has stressed that it neither controls the public XRPL network nor the XRP token. This represents part of its arguments in the ongoing SEC lawsuit where the agency is alleging a common enterprise between the firm and XRP holders.
However, this rebuttal from Ripple has not stopped the proliferation of certain reports which sometimes erroneously call the network or the token “Ripple.” Proponents believe the Atlanta Fed article is one such report. However, ScamDetective asserted that the article could refer to the private ledgers developed by Ripple for use cases such as CBDC pilots.
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