Schwartz: The Origin of Bitcoin Was Being Your Own Bank

David Schwartz, chief technology officer of blockchain company Ripple, stated that Bitcoin has failed to achieve its main goal of becoming your own bank. Schwartz’s criticism came in response to a quote Vitalik Buterin shared on Twitter. The Canadian programmer emphasized the importance of eliminating middlemen, arguing that blockchain would put Uber out of business and allow taxi drivers to work directly with their customers. However, Schwartz says this does not apply to proof-of-work and proof-of-stake blockchains.

“Bitcoin’s origin was the absence of intermediaries and you being your own bank. It didn’t achieve that goal. But your basic premise is at least slightly wrong. For example, Google (and others) provide DNS to the public for free. Of course, they have their own reasons. They get data. “PoW and PoS systems deliberately increase the transaction cost so that such models do not work. The problem is that a lot of people lie that this issue is already resolved on their system. We cannot fix a problem that we claim is already solved.”

Block producers, like Uber and credit card companies, are encouraged to keep fees as high as possible, according to Schwartz. For this reason, Ripple executive says Buterin’s claim makes no sense.

“While Uber tries to tax the driver, block producers try to tax the sender of a particular transaction.”

Echoing the words of Ripple co-founder Chris Larsen, Schwartz says that Bitcoin “unnecessarily” allows miners to tax transactions as an intermediary. Ripple has a very different structure compared to other cryptocurrencies. Especially since they started to launch XRP as a separate structure from themselves, Ripple has started to take an attitude like a blockchain company instead of crypto. This company, which supports the states on the digital national currency, has moved away from its pro-crypto attitude in its first days.

Larsen has repeatedly criticized Bitcoin users for consuming too much energy. He also recently launched a campaign with Greenpeace, urging the community to abandon the energy-intensive proof-of-work consensus algorithm. All these movements may cause the crypto industry to turn against them in the future. Just as the company funded with XRP is now somewhat abandoning XRP, Ripple may soon be preparing to leave the crypto industry, especially Bitcoin, or even take a front.