In everyday life, we are sometimes forced to lie to the people that we love. Known as ‘white lies’, these are innocent lies that don’t hurt anyone and they’re acceptable to a certain degree. But what happens when the CEO of a leading crypto company starts misleading people by telling them what he thinks are little white lies? Chaos ensues.
That is what happened yesterday when the Brad Garlinghouse, CEO of Ripple Labs, declared that he thought XRP, the so-called cryptocurrency in which Ripple Labs supports its products and services, is “very clearly decentralized”. He is telling little white lies for his investors to chew on; one that is almost equal in telling them that Ripple Labs have nothing to do with XRP. But his sassy businessman speech cannot sweeten this deal or fool us.
Ripple CEO Brad Garlinghouse responds to the criticism that #XRP isn't decentralized and is not a true cryptocurrency: "It is very clearly decentralized. I, as CEO of the company, can't control the XRP ledger."#SwellbyRipple #Ripple #xrpthestandard pic.twitter.com/HFanjmJjTV
— 𝗕𝗮𝗻𝗸 𝑿𝑹𝑷 (@BankXRP) October 2, 2018
He goes on to say that “Ripple labs cannot control the XRP ledger”, which is correct. The ledger of a proper cryptocurrency is immutable, as it should be. This is a primary principle of blockchain and no one should be able to pull an EOS on anyone. But decentralization has a great deal to do with other things that Ripple does very bad, like validators. Validators are trusted machines which are registered by Ripple to accept and validate transactions. The majority of validators are Ripple owned with only a few being run by third parties; so in the state of a Ripple Labs bankruptcy, the network would be severely hampered in its operative capabilities. Additionally running a validator is purely philanthropic and there is no reward for doing it, validator nodes should be difficult to come by.
Ripple owns huge reserves of XRP and dumping it on the open market would tank prices to near zero levels, another thing that shows the centralization of the asset. But everything has a reason and this time it is clear. Good old pal Brad, needs to spread the world that XRP is decentralized to cast away the shadow of it being declared a security by the SEC. If this really comes to happen, it would be game over for Ripple. The exchange would have to be registered for security brokers to list it, something which consumes time and money. So it is better to try these white lies and survive, even if they are just that: lies.