Ripple CTO Believes that Transaction Costs Should Reflect the Actual Cost of the Network

03/06/2023 13:39 • NFT Newsflash • 139 views

It is reported that David Schwartz, the chief technology officer (CTO) of Ripple, posted a message on social media that the XRPL community still has differences on the proposal to increase transaction costs. David Schwartz said that although he voted in favor of the vote, he believed that transaction costs should not be used to artificially manipulate the price of XRP. Transaction costs should reflect the actual cost of the network, so as to allocate resources more effectively and ensure that XRPL network will not lose low costs Competitive advantages of high-speed blockchain. In addition, David Schwartz added: “If the transaction cost is lower than the actual cost, and the artificial execution cost is used to reduce the node operation, the network value will be damaged. If the transaction cost is higher than the actual cost, it is actually adding unnecessary trouble to the network.”

Ripple CTO: Although they voted in favor of the XRPL community’s proposal to increase transaction costs, they still have different opinions

Interpret the above information:

David Schwartz, the chief technology officer of Ripple, recently posted a message on social media discussing the ongoing discussions within the XRPL community regarding the proposal to increase transaction costs. According to Schwartz, while he voted in favor of the vote, he believes that transaction costs should not be artificially manipulated to increase the price of XRP. Instead, transaction costs should reflect the actual cost of using the network, in order to allocate resources more efficiently and ensure that the XRPL network can maintain its low-cost, high-speed blockchain competitive advantage.

Schwartz stated that if transaction costs are lower than the actual cost, and artificial execution costs are used to reduce node operation, the network value will suffer. Conversely, if transaction costs are higher than the actual cost, unnecessary barriers will be added to the network. By ensuring that transaction costs reflect the actual cost of network usage, the XRPL community can continue to build a competitive and efficient blockchain network.

This message from Schwartz reflects one of the key challenges facing blockchain networks: balancing the need to generate revenue with the need to maintain a low-cost network. While transaction fees are an essential part of many blockchain networks, particularly those that rely on Proof-of-Work mining, they can also be a point of contention, particularly when their purpose is perceived to be little more than currency manipulation.

By emphasizing the importance of transaction fees reflecting the actual cost of network usage, Schwartz is seeking to ensure that Ripple can continue to develop its XRPL network in a sustainable and efficient manner. This approach should help to maintain the network’s competitiveness, particularly as more and more users begin to make use of it.

In conclusion, David Schwartz’s message regarding transaction costs provides valuable insight into the ongoing discussions happening within the XRPL community. By emphasizing the importance of keeping costs low while still generating revenue, Schwartz is ensuring that Ripple can continue to develop its network in a sustainable manner. Furthermore, his message highlights the importance of balancing revenue generation with network sustainability, a key challenge for all blockchain networks moving forward.

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