The distribution of cryptocurrencies has always been a contentious topic in the crypto community, with investors often questioning the fairness of initial token supplies. Recently, the XRP token has come under scrutiny, causing Ripple CTO David Schwartz to address these concerns. In this article, we will explore the various issues raised by the community and delve into Schwartz’s response.
One of the main points of contention involving XRP is the placement of its genesis block. Unlike traditional blockchains that start at block #1, XRP Ledger begins at block #32,569. Community members have raised questions about why this unconventional starting point was chosen. In response, Schwartz defended the decision, stating that “The choice of what to consider the genesis block is arbitrary.” He drew a parallel to the Ethereum blockchain, highlighting a similar anomaly where a significant transaction was not included in the initial blocks.
Schwartz further refuted claims regarding missing transactions in the XRP Ledger’s genesis block. He clarified that there were no transactions included in the genesis block at all. Out of the 32,570 ledgers that are currently absent from the blockchain, only 534 transactions were recorded. These missing transactions are assumed to be lost with the initial blocks, raising concerns about the irretrievability of valuable information.
To shed light on the initial XRP distribution, Schwartz provided information regarding the allocation of tokens. Founders received 20% of the total supply, with Jed McCaleb and Chris Larsen each obtaining 9%, while Arthur Britto received 2%. The company, formerly known as OpenCoin and now Ripple, received the majority of the supply, amounting to 99.99% of the tokens. The remaining 0.013% was distributed to beta testers and developers on the blockchain. This breakdown helps explain the significant portion of the supply held by Ripple today.
Currently, Ripple releases one billion coins from escrow every month. Out of these, 800 million tokens are returned to escrow, while 200 million tokens are utilized to cover operational costs. This regular release of coins ensures a steady supply in the market. However, it is worth noting that concerns have been raised about the potential impact on the token’s price stability.
The initial distribution of XRP has sparked debates and questions within the crypto community. Ripple CTO David Schwartz has addressed these concerns by providing explanations for the unconventional aspects of XRP Ledger, such as the placement of the genesis block and missing transactions. Understanding how tokens were allocated during the launch phase helps clarify why Ripple holds a significant portion of the XRP supply. As the industry evolves, it is essential for stakeholders to have a comprehensive understanding of the distribution mechanisms and factors impacting token prices.
Disclaimer: This article is for educational purposes only and does not reflect the opinions of NewsBTC. Investors are advised to conduct thorough research before making any investment decisions, as cryptocurrencies carry inherent risks.
