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September 22, 2020
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“Bitcoin cannot become a global financial system”, says founder of Ripple

Chris Larsen spoke about Ripple and Bitcoin during participation in podcast

Ripple network founder Chris Larsen said that Bitcoin’s Proof of Work (PoW) consensus model cannot become a global financial system; therefore, banks may not be able to rely on it to validate transactions, he said in the recent Block Star podcast, centered on Ripple.

Although during the podcast he tried to explain “how digital assets help to create a sustainable economy”, Larsen said that Bitcoin was the right technology that came at the right economic time, offering a decentralized financing system. Unlike most, he does not believe that Bitcoin was the solution to the economic crisis at the time.

Larsen, interviewed by Ripple CTO David Schwartz during the podcast, said it would have been more interesting for Bitcoin if it had been created as a movement against what caused the crisis at the time.

Although not all of the promises Bitcoin expected have been kept, Larsen said the new change in the monetary system is sufficient to say that it would bring sustainability to the economy.

When asked about Ripple’s (and XRP) focus and why a revolution is needed, Larsen said the lack of interoperability in the transaction is affecting the economy.

Speaking about characteristics of the XRP and XRP Ledger, Schwartz asked how technologies enable the “Internet of Value”. Larsen replied that it needs to be fast, very cheap and open to everyone.

He further explained that, when it comes to payment, this network needs to be deterministic and that history cannot be rewritten by anyone, hence the biggest problem with the Bitcoin Proof of Work model.

Larsen also said that as miners can rewrite history, Bitcoin cannot become the global financial system or replace SWIFT, while XRP can.

Ripple brings definitive solution that challenges SWIFT

SWIFT, which is an international payment network adopted by more than 11,000 banks and financial institutions, according to Larsen, has failed to diversify from its main objective, while Ripple has decided to transform itself into a company focused on companies.

Larsen further argued that the main SWIFT component of cross-border payments was fundamentally broken because they operate based on a system built in the 1970s.

During the same podcast, Larson explained that the Proof of Work model is centralized because it is more controlled by the miners, scolding Bitcoin for the fact that its code cannot be changed, unless the miners completely agree.

Source: News Logical

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