In a recent debate conducted by Money 20/20, David Schwartz, the Chief Technology Officer of the leading blockchain remittance firm Ripple, put forth his stance on why the blockchain technology is the right base for building new payment systems.
He also cited the example of traditional banking systems and the recent YouTube outage to address the vulnerability associated with centralization.
The CTO listed security and governance as the key points to prove the competence of the blockchain technology. Firstly, he stated that technology promotes security as it does not have a single point of failure. He also added:
“Blockchains are secure because every participant in a watching can enforce all the systems rules. When you ask your bank balance, your bank tells you what your balance is and you have to trust them. If they screw up you have to go to the bank to get them to fix it.”
Subsequently, Schwartz explained that blockchain-backed systems do not work in the same way as traditional banks. Rather, they allow every participant to verify every system rule personally, thus, one does not have to worry about issues regarding system breach.
According to the techie, blockchain systems are self-defendant, meaning that they are highly reliable even when compared to the big centralized ecosystems in the world, such as YouTube. Here, Schwartz stated:
“YouTube had a two-hour outage a couple of days ago, but people will tell you that centralized databases – it’s a solved problem. We can get five nines of reliability. Anybody came here from a centralized database, does anyone get five nines of reliability? I sure don’t, we don’t. It’s because these systems are complicated enough with complicated failure nodes.”
He further spoke about Bitcoin stating that its system has not faced an outage since 2013 after a bug was fixed. He also mentioned that blockchains are fundamentally much simpler with simple failure modes. He added the same opinion in the case of XRP and Ethereum [ETH] ledgers, explaining that these systems have never had outages.
Next, he said that reliability is a fundamental trait of blockchain technology, which is imperative if the people do not want any single, centralized body to untangle a mess caused in the system.