Recently, cryptocurrency influencer Xaif posted a highlight of a detailed post by David Schwartz, the CTO of Ripple, about the assets of the XRP ledger (XRPL). The post quoted Schwartz as saying that, in collaboration with Jed McCaleb and Arthur Britto, they identified key flaws in Bitcoin and sought to design a blockchain system to address these flaws.
After Xaif's tweet, Schwartz confirmed that the team aims to create a "faster, more efficient, and completely decentralized" system, differing from Bitcoin's proof of work design. The tweet included a video of Schwartz narrating the timeline and technical foundations that led to the development of XRPL, which began in 2011.
The original motivation and design philosophy
In the video, Schwartz explains that the original concept came from Jed McCaleb in 2011, at a time when proof of work (PoW) was considered essential for Bitcoin's success.
Schwartz noted that despite prevailing public opinion, there are indications that proof of work (PoW) may not be a sustainable or fair consensus model within blockchain technology. He explained that one of the initial assumptions was that mining would remain an open process, available to anyone with computational power.
However, over time it became clear that this model had naturally evolved into a centralized structure favoring the most efficient operators, thereby creating entrenched systemic inequality among stakeholders.
Schwartz explains that McCaleb came up with the idea of replacing PoW with a distributed consensus algorithm - an approach long established in computer science but largely unexplored in blockchain systems.
Schwartz began researching this concept in November 2011 to verify whether a non-proof-of-work (PoW) blockchain could operate effectively and what unique characteristics it could offer.
Breakthroughs and technical differences
The CTO of Ripple stated that they quickly discovered this model was successful and offered unique features not present in Bitcoin. Notably, the consensus algorithm used in XRPL is "leaderless," eliminating the need for a single block producer.
Schwartz explains that in systems like Bitcoin or Ethereum, a single elected party creates each block, which poses a risk of manipulating transactions, especially in use cases like asset exchanges. In contrast, the XRP ledger does not rely on a single designated leader, making it particularly suitable for fair and transparent financial operations.
He confirmed that this architectural decision led to the realization that XRPL could serve as the foundation for decentralized asset exchange.
Arthur Britto realized early on that the absence of block producers mitigated risks such as rushed buying, transaction reordering, and selective censorship. As a result, the team designed an exchange that enables participants to place buy orders and execute trades with lower systemic risks.
Multi-asset ledgers and liquidity pools
Inspired by Ryan Fugger's previous work in 2004, the team expanded the XRPL to support issued assets, which Schwartz described as the first version of a stablecoin. The design included a decentralized exchange (DEX) and a model based on accounts, instead of Bitcoin's UTXO model. These changes allowed for multi-asset trading and improved interoperability.
Schwartz indicated that even those who believe Bitcoin will dominate the global financial sector should recognize the transitional nature of value between different assets. In this context, the existence of a multi-asset ledger is essential. He stated that XRPL was launched in mid-2012 as a feature-rich platform that allows users to access public liquidity pools.
The system allows users to own one asset and pay with another by specifying automated paths and efficiently routing requests. He explained that this flexibility addresses the reality that the majority of global value is not denominated in Bitcoin or any other cryptocurrency.
Completion and legacy
According to Schwartz, by early to mid-2012, XRPL was essentially complete with the same core features as today, including the account model, issued assets, XRP as the native currency, and an integrated decentralized exchange.
This technology relies on efficient transaction execution, decentralized liquidity, and operational compatibility among multiple assets. Schwartz concludes that these factors make XRPL a unique blockchain platform, especially for financial applications that require fairness, speed, and decentralization.