Cobo Vault has introduced a different type of “auditability” through the transparency of QR codes. In excluding Bluetooth, Wi-Fi, USB, NFC, and other opaque means of data transmission from our product design, we have made it easy for users to verify that their hardware wallet is not revealing their private keys or other sensitive information in any way.
Proof-of-work (Bitcoin and Ethereum) and XRP Ledger Consensus
Bitcoin and Ethereum use proof-of-work algorithms. This system rewards individuals, known as “miners,” for validating transactions by paying a fee for their work. This was a great starting point for a decentralized system that incentivizes complete strangers to contribute to the greater good of a network and make forward progress. But as time has gone on, clear limitations have manifested. Blockchains that use proof-of-work can be subject to centralized control, where a few miners have significant control over the system.
The XRP Ledger uses a consensus protocol that relies on a majority of validators to record and verify transactions without incentivizing any one party (this is one of the main reasons why I began working on XRP Ledger more than six years ago). Validators are different from miners because they aren’t paid when they order and validate transactions. Today, these validators operate at locations across the globe and are run by a broad range of individuals, institutions, asset exchanges and more.
Put simply, the XRP Ledger is based on an inherently decentralized, democratic, consensus mechanism — which no one party can control.