There’s been a lot of hullabaloo about the significance of Ripple, to the point where some investors consider the XRP token more valuable than Bitcoin. Ripple has been doing very well in the past few months, chalking up more banking partners and getting listed on Coinbase.
It’s understandable why some mainstream financial entities would favor an asset class that would benefit their established institutions as opposed to Bitcoin, which — if widely adopted — would effectively take away the monopoly of traditional banking and distribute banking power to the masses.
The latest notable “XRP vs BTC” incident has come from Stanford University.
In a lecture titled “Blockchain and the future of finance”, Susan Athey, a professor at the Stanford University of Business and member of the Ripple Board of Directors, offered her thoughts on the financial revolution that blockchain technology could usher in.
The discussion drew some attention because of Athey’s remarks, which were refuted by one particular student, Conner Brown. Brown took umbrage because the professor’s remarks involved a number of inaccurate statements about Bitcoin, some of which could be construed as arising from Athey’s involvement in Ripple.
The lecture was attended by an audience who was mostly unaware of Bitcoin and the nature of the technology upon which it operates. As such, Athey’s statements could give the students an incorrect understanding of both BTC and blockchain technology.
Speaking to Bitcoin Magazine, Brown said:
It concerns me that my classmates’ first introduction to Bitcoin contained severe factual errors along with strong anti-Bitcoin rhetoric. The academy is not a place for marketing, but rigorously testing ideas. If a professor has a potential conflict of interest, they should be held to the highest standards of scrutiny and peer review.
He decided to write to the university’s authorities about the erroneous information in the lecture, sending them a lengthy email that pointed out the flaws in Athey’s arguments.
Correcting Misinformation About Bitcoin (BTC)
Citing a potential conflict of interest because of her involvement with Ripple and inaccurate statements in her comparison of Bitcoin and Ripple, Brown raised 5 primary points against Athey’s lecture.
Posted below is an email that I sent to the Stanford GSB after a presentation in one of my classes. My professors refused to talk in person after bringing this to their attention. Over a month later I still have heard no response, other than "we will get back to you on this."
— Conner Brown ⚡️ (@_ConnerBrown_) February 24, 2019
At one point in her lecture, Athey mentioned that Bitcoin has become centralized as it is being controlled by a small group of miners in China. Brown straightforwardly disproved this:
…No matter how much computing power a single entity has, they cannot submit invalid transactions. Therefore, due to this network design, Bitcoin can never be controlled by miners, it is protected by complete nodes around the world.
Brown then tackled her statement on Bitcoin being un-encrypted and not economically secure.
Athey said that a Bitcoin holder’s money is tied to the miner’s profitability and that XRP, which does not utilize miners, better guarantees a user’s money.
Brown deftly responded to her confusion over this association between miners and Bitcoin hodlers and a 51% attack:
When holding money in a Bitcoin wallet, the wallet is protected by SHA256 encryption and ECDSA. As long as you don’t tell anyone what your private key is, this key is almost impossible to crack. The security of this encryption is independent of the economics of the protocol. When referring to “network economics,” she may refer to the fact that she can use the mining power to attack. However, this is a threat that has been revealed for a long time. In essence, this only involves those who try to spend their money in two different places and more than once, and deceive the network. In fact, this is almost impossible and does not involve stealing user funds.
In a slightly more damning case of misleading information, Athey claimed that a Mexican bank called Cuallix used Ripple’s xRapid technology, even presenting a slideshow on the matter.
Brown, in a good bit of investigation, reviewed Cuallix’s website which is about the only piece of evidence. He even went so far as to call the bank and ask them if they used xRapid, to which their response was “no.”
Several other pieces of information Athey presented on Bitcoin are also taken from many years before, which does not accurately reflect the progress the network and its developers have made in refining its usage and capabilities. For example, Athey said nothing about the Lightning Network.
Athey also claimed that Bitcoin wastes energy because of the large amount of computing power required to mine it. But as Brown says, 77% of the mining energy is from renewable sources.
Brown’s rebuttal email is well worth reading in full.
— Conner Brown ⚡️ (@_ConnerBrown_) February 24, 2019
To date, Stanford has not responded to Brown’s email, aside from “We will get back to you on this.”
Many claims can be made about both Bitcoin and Ripple, but an honest and open discussion based on clear facts would give an audience unfamiliar with the space a much better understanding of how the technologies, and consequently allow them to come to their own conclusions.