The founder of Ripple network Chris Larsen has said Bitcoin’s proof-of-work consensus model cannot become a global financial system, hence, banks may not be able to trust it for validating transactions, this he declared in a recent Ripple-centric Block Star podcast.
Although, during the podcast centered on explaining “How Digital Assets Will Help Create a Sustainable Economy,” Larsen said that Bitcoin was a right technology that came at the right economic time offering a decentralized financing system. Unlike most, he does not believe Bitcoin was the solution to the economic crisis then.
Larsen, interviewed by Ripple CTO David Schwartz during the podcast, said it would have been more interesting for Bitcoin if it was created as a movement against what caused the crisis then.
Even though not all promises people expected from Bitcoin were achieved, Larsen said the new change in the monetary system is enough to say that it would bring sustainability to the economy.
When asked about the focus of Ripple XRP (international transaction) and why there is a need for a revolution, Larsen said the lack of interoperability in the transaction is affecting the economy.
Talking about the XRP’s unminable characteristic and XRP Ledger, Schwartz asked how the technologies enables the Internet of Value. Larsen responded that it has to be fast, very cheap, and open to everybody.
He further explained that when it comes to payment, such network has to be deterministic and that history cannot be rewritten by anybody, hence the major problem with Bitcoin proof-of-work model.
Larsen also said since miners can rewrite history, Bitcoin cannot become the global financial system or replace SWIFT whereas, XRP can.
Ripple Brings Definite Solution that Challenges SWIFT
SWIFT, which is a legacy international payment network has been adopted by over 11,000 banks and financial institutions, according to Larsen, has failed to diversify from its primary target, while Ripple has decided to turn into an enterprise-focused company.
Larsen argued further that the SWIFT key component of the cross-border payments has been fundamentally broken because they operate based on a system built in the 70s.
During the same podcast, Larson explained that the Proof-of-Work model is centralized because it is more controlled by miners, berating Bitcoin for the fact that its code cannot be changed except the miners agree altogether.