Ex-Ripple Developer Responds as Founder of Europe’s Oldest Fund Insists XRP is Centralized

In an exchange on social media, former Ripple developer Matt Hamilton responded to recent claims from Justin Bons, the founder of Cyber Capital, that XRP is centralized.

Recently taking to X, Bons made a bold statement that has sparked controversy within the crypto community. According to him, Bitcoin (BTC) no longer has the strengths it perceived to have, and Tether is a fraudulent scheme worth billions of dollars.

BTC is an emperor with no clothes & Tether is a multi-billion-dollar fraud

ETH is captured by "L2 scaling" interests & half of DeFi can steal user funds with admin keys

All while centralized chains like XRP & BNB remain dominant

Despite all that, I still love cryptocurrency!

— Justin Bons (@Justin_Bons) October 26, 2023

Bons also alleged that Ethereum is captured by interests regarding layer-2 scaling protocols and some decentralized finance (DeFi) projects can steal users’ funds with their administrative privileges. He also claimed that XRP is centralized – a view he has always held.

This assertion garnered attention from the crypto community, as Bons not only criticized Bitcoin but also took aim at Ethereum, Tether, and other projects. However, it was his remarks about XRP that ignited a fiery debate. An XRP enthusiast swiftly responded, stating that XRP is not centralized.

Bons, undeterred by the backlash, doubled down on his claims and pointed to a detailed explanation from months back to support his stance. He alleged that XRP’s centralization was not a matter of conjecture but a fact based on tangible evidence.

Bons’ Assertion

According to Bons, XRP’s centralization stems from its Unique Node Lists (UNLs). These lists consist of trusted nodes released by parties he believes are centralized, including the XRP Foundation. 

Nodes that are not on this list are considered untrusted and do not participate in the consensus process. Furthermore, users have the ability to modify the UNL, effectively allowing them to choose who to trust. 

Bons argued that this system demonstrated a lack of trustlessness and ultimately required permission from specific trusted third parties chosen by the XRP Foundation.

He further contended that XRP’s consensus mechanism, based on these UNLs, made it fundamentally different from other decentralized cryptocurrencies like Bitcoin and Ethereum. 

Bons likened it to a form of Proof of Authority (PoA) rather than the widely accepted Proof of Stake (PoS) or Proof of Work (PoW). In PoA systems, a central authority appoints validators, and XRP, according to Bons, exhibited similar characteristics.

To make matters more concerning, Bons cited a screenshot from XRP community figure Scam Detective. He alleged that all three “official” UNL lists, including the default dUNL hosted by the XRP Foundation, were identical to each other.

According to him, this could demonstrate that the foundation exerted de facto control over the XRP network. This level of control, in Bons’ view, was contrary to the principles of decentralization that underpin most cryptocurrencies.

Ex-Ripple Developer Responds 

This intense debate over XRP’s centralization holds significance in light of the ongoing legal battle between the U.S. Securities and Exchange Commission (SEC) and Ripple.

The SEC’s classification of XRP as a security hinges on its level of decentralization. Ripple and the XRP community have maintained that XRP is decentralized. Judge Analisa Torres categorically stated in her July 13 ruling that XRP is not a security.

As the discussion raged on, Matt Hamilton, a former Ripple developer, stepped in to challenge Bons’ assertions. Hamilton emphasized that each XRP node is responsible for its own UNL and has the autonomy to choose the contents of that list, a rebuttal aimed at dismantling the centralization argument.