On April 12, 2022, Forbes published a Ripple and XRP article in their Advisor section. Forbes Advisor is advertised as providing relevant financial coverage to allow readers to “make the most of their money.” I haven’t seen a cryptocurrency article this poorly researched from a mainstream publication in a long time. If all of the articles on Forbes Advisor are this bad, I’m terrified for their readers. Usually, it’s one of the smaller crypto content mills that do some surface level research and push an article out without any fact checking, but for this to come out of Forbes is embarrassing. They didn’t just get a single minor fact wrong – almost the entire thing is misleading, save for their discussion about the lawsuit. Some tidbits from the Forbes article:
Highly centralised. One of the reasons that cryptocurrencies became popular is that they were decentralised, taking control away from large banks and governments. The Ripple system is centralised and goes against this philosophy.
Its default list currently contains 35 trusted validators. Ripple decides which validators to approve for this list and also makes up six of these validation nodes.
Here’s what makes this so silly: The author has noted Ripple controls 6 of 35 trusted validators. Even doing no additional research, this data means Ripple only controls 17 percent of validators on the XRPL. Apparently, this means the XRPL is highly centralized. The mining pool centralizing we find on BTC, sometimes in excess of 80+ percent, is “decentralized.” But Ripple controlling 17 percent of the validators is “centralized.” I hope someone can explain this to me because I don’t understand it. Maybe it’s too technical for me. Either that or decentralization is a feeling, a religion, and we’re just praying to the wrong blue fidget spinner shaped god.
There’s also no mention of the independent XRP Ledger Foundation’s UNL. And no mention that Ripple plans to give control of the dUNL to an independent foundation in the future. And there’s nothing in the article about the amendment which passed that Ripple didn’t support, something that would never occur in a centralized system. The dUNL is a point of centralization, but this does not make the entire ledger centralized. To suggest that it does indicates a fundamental lack of understanding on how the XRPL works.
Ripple Labs controls the XRP supply. Ripple Labs decides when to release coins, giving it control versus other cryptos where coins are slowly and steadily released by mining. This means Ripple Labs has more power to influence the value of XRP by deciding when and how many tokens to release.
Again, incorrect. They mention “predictable release,” but I don’t think they understand how Ripple has done this. Ripple has secured the majority of its portion of XRP in a cryptographic escrow with a timed release, which means the supply is controlled by timed release via the escrow, not Ripple. I’m unaware of any instance where Ripple has sold the entirety of the XRP tokens released to them during these periods. Ripple can choose to sell the tokens that are released to them during the escrow periods, but I haven’t seen any persuasive evidence that the amount they’ve sold during these periods has had any impact on the price of XRP. “Slowly and steadily” released through mining (BTC, ETH, ZEC) is similar to limited and steadily released through escrow (XRP).
The main difference is that miners are incentivized to sell the tokens they receive through mining to pay for the cost of their equipment and operation. Whereas, if it were known that Ripple consistently sold the entirety of the limited amount of tokens released to them from escrow, it would devalue the rest of the XRP they have locked away. Ripple is therefore incentivized to be a responsible custodian of the XRP Ledger explicitly due to the lack of control they have over XRP’s supply via the escrow.
2 comments on “Forbes Flubs Ripple Article”
Thank you. I spotted this myself and was appalled, making posts on Twitter and XRPChat. UNBELIEVABLE that Forbes screwed this up so bad. They honestly wrote better about Ripple in 2013 than now!
It really is perplexing. Major fact-checking fail.