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An Analysis of the Ripple Network Using Graph Theory

Source: https://www.technologyreview.com/s/608132/first-large-scale-analysis-of-the-ripple-cryptocurrency-network/

The concepts of graph theory are the core foundation of the idea of Ripple, the world’s third-largest cryptocurrency. Ripple utilizes the small-world phenomenon, otherwise known as “six degrees of separation,” as the basis for a peer-to-peer payments network. The idea is that transactions “ripple” through the network in such a way that the sender sends money to someone he/she trusts, who sends it to someone he/she trusts, until the money reaches the intended recipient. The users, who are nodes in the network, are compensated a small amount for serving as an intermediary. The small-world phenomenon predicts that these transactions will not need to travel through many nodes and thus transactions are both fast and low-cost. Indeed, this turns out to be true, with average transaction speed and costs that completely dwarf Bitcoin’s.

However, while the network is both fast and low-cost, a team of researchers at Purdue University has discovered striking weaknesses in the network structure. The network bears resemblance to a variety of local ego networks, where a central node/ego (known as a “gateway”) serves as a link between two nodes with few links between non-gateway nodes. This is a massive security threat because attacks on gateways can sever links between nodes, isolating them and restricting access and use of funds. The team of researchers estimates that of the 100,000 wallets in the network, as many as 50,000 of them are vulnerable to disruption from the removal of as few as 10 important nodes.

Currently, Ripple is definitely one of the most promising cryptocurrencies available for Ripple to become a truly viable currency, and to realize the decentralized dream of cryptocurrencies, Ripple desperately needs to strengthen their network by adding more nodes and links between nodes.

 

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