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Only 10% of XRP units are in masses’ hands, Is Ripple dangerous ?

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January 29, 2018 | 

1127 Views | 

Joanna Newman | 

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XRP is a cryptocurrency unlike any other, and the network it relies on, the Ripple, is one example of such statement. The circulation of its units also help it to differ from other virtual assets from the market, and it is said that 10% of Ripple cryptocurrencies units are owned by regular traders and people.

How the existing units are divided among their owners


All of these researches has been investigated by Adam Quinn, at least that’s the name he gave. A total of 61 Billion units (previously said to be 84 billion units) would be actually in the possession of Ripple Labs members, with Ripple founder Jed McCaleb and co-founder Chris Larsen respectively own 5 billion and 6.7 billion unit at the moment. Most of these units aren’t released on the market on a large scale, because of the obvious effect it would have on its general price.

Instead, it’s released slowly, and for example, Jed McCaleb is allowed to sell his units at the rhythm of $10 000 worth of XRP each week. This helps prevent uncontrollable changes in the price of the virtual currency. Adam Quinn claimed online that at least 10% of XRP units are in the hand of regular people, and the $47 billion marketcap would be over evaluated. His theory is that some of the XRP units help by Ripple Labs members are taken into accounts, even if these units aren’t in circulation. The real marketcap would then be $6 billion, and not $47 billion by any means.

2014, of the year of the McCaleb Gate


2014 could have been an inherently bad year for Ripple, as its founder decides to leave the company and to create a startup that is very similar: Stellar. He also stated publicly that he wanted to sell all of his holdings, and that announcement only was enough to initiate a negative trend of the XRP value.

Ripple Labs stopped such trend by freezing McCaleb’s holding, so he wasn’t anymore able to sell them. A settlement between the two parts included McCaleb’s possibility to sell his XRP, but only at a rate of $10 000 worth per week.

Ripple Labs seem to seek for a stable XRP price


The Bitcoin market is the best example to describe what an unstable market is; within minutes, the price difference can be drop to important lows or peak at impressive highs, and its mid-term and let alone long-term future isn’t predictable at all. It might has many reasons, and one of them is probably because no one controls the Bitcoin emission. The blockchain is designed to allow the generation of a specific quantity of units in a day, and this doesn’t change even if the total computing of the network changes.

Because they own a huge part of the existing units of XRP, Ripple Labs have a large influence on its market value. They can decide to release more or less units on the market in order to keep their price at a reasonable level. We must mention that instead of slowly releasing all of their units, bit by bit everyday like for the Bitcoin, all XRP units has been created together at the very beginning.

Once the Bitcoin process has been launched, it has become very hard to stop. It has been designed in order to be out of control of anyone who would try to take advantage out of it, but it seems like it has been too well designed for that. Actually, only time can tell the fate of the Bitcoin, while XRP’s fate depends on Ripple Labs members’ collective actions and decisions.

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