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Ripple does not use Proof of Work or Proof of Stake. Ripple uses the Ripple Protocol Consensus Algorithm (RPCA), which is a distributed agreement protocol, to determine proper order of transactions and if a transaction is valid. Each ledger is determined by a consensus of participants; not a miner building a block with the transactions they want.
There is not block reward incentive in RPCA. Many argue that this does not encourage enough decentralized participation. Ripple's consensus process incurs minimal energy consumption, especially compared to PoW. |