Schwartz: Ripple Doesnt Control Consensus
First of all, when the XRPL was being developed, Proof of Stake “hadn‘t been invented yet, and we weren’t clever enough to think of it.” More importantly, as Schwartz has noted, using XRP to drive the consensus mechanism “would have left Ripple in control of the consensus mechanism whether people wanted that or not.” The XRPL relies on what Schwartz calls “shareholder choice.” Network participants choose to come to a consensus with validators they believe are doing a good job. The best incentive is no incentive In his 2020 lecture, Schwartz argued that artificial financial rewards actually harm the networks actual users. He noted that the primary technical hurdle is that “eventual consistency is needed for blockchains to be useful,” but argued that paying exorbitant fees to solve this problem is inefficient. Schwartz fundamentally views built-in mining or staking rewards as a net negative: “artificial incentives are attacks on the natural stakeholders, and they represent friction left in the system.” As he explained, “natural incentives decentralize the only reason to participate in the system is because you want the system to work reliably there is nothing for you to take from the system.”
