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Ripple and XRP: The convoluted truth behind XRP’s creation

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Ripple and XRP: The convoluted truth behind XRP's creation
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Opinion: XRP, the second-largest cryptocurrency by market cap, has been facing a ton of speculation from the beginning, and the stories have resurfaced as SEC has revamped their hunt for fraudulent ICOs to help investors from losing funds.

The origin of Ripple and XRP has always been unclear, as the facts available say one thing, but the company officials say another.

Although the CEO of Ripple, Chris Larsen, and the chief market strategist, Cory Johnson, have made it sufficiently clear in recent days by their media tours that XRP is in fact not issued and created by Ripple, they still have a lot of explaining to do with respect to the skeletons of the past that are crawling out of the closet.

The infographic below shows the evidence of conflicting ideas around Ripple and XRP.

 

 

To avoid further confusion in the community, Jed McCaleb and Cory Johnson went on a media tour clarifying that XRP is not a security and that it was not created by Ripple.

One such example is the letter by CEO of Ripple, Brad Garlinghouse, which lists reasons as to why XRP is not a security.

1. “If Ripple, the company, shut down tomorrow, the XRP ledger would continue to operate. It’s open-source, decentralized technology that exists independent of Ripple.”

2. “The people buying XRP, they don’t think they’re buying shares of Ripple. There’s a company called Ripple, we are a private company, we have investors… but buying XRP doesn’t give you ownership of Ripple, it doesn’t give you access to dividends or profits that come from Ripple.”

3. “XRP is solving a problem. There’s no utility in a security.”

The Rebuttal

In reply to Mike Dudas’ Tweet, Dr. T [XRPTrump] denied the proof of Ripple creating XRP and said that it was created long before the company Ripple and also provides proof with a GitHub repository which shows that 100 billion XRP was indeed created in May 2012 and that Ripple was created in September 2012.

In addition to the GitHub repository, Dr. T also refers to The Founder’s Agreement created by Jed McCaleb, Chris Larsen, and Arthur Britto, which sheds light on how the XRP was created and distributed among founders.

David Schwartz, the CTO of Ripple, agreed with Dr. T and said:

“It’s a very weird series of superficially apparent contradictions presented as if they were some great mystery and there was no way to tell what is true. Many of them can be readily cleared up just by looking at the project’s public github history.”

He continued:

“It’s not surprising that when discussing things where the distinction is not relevant (such as the mechanics of the XRP supply) one wouldn’t distinguish between what Ripple the company did and what people who became founders and employees did before the formation of the company.”

XRP The Standard [XRP Community]

As reported in the XRP community blog, Hodor, a prominent XRP enthusiast, said that the “share of ownership of the company [Ripple] is only known by the insiders”, while he also stated that the company is still kept “private”. He had said:

“… we can surmise that the earlier the investor, the greater the potential share, generally; however, the significant amount of money infused in later rounds might have resulted in a material share of the company ownership as well; only company insiders really know for sure.”

The blog also stated that the founders of Ripple and XRP allocated a portion of XRP to themselves while donating most of it to the company Ripple [previously called OpenCoin].

OpenCoin was given 80 billion XRP while Jed McCaleb and Chris Larsen were given 9 billion and 7 billion XRP respectively. Jesse Powell, who was also on the board at Ripple, put out a letter which questions why Jed McCaleb and Chris Larsen allocated the XRP to themselves. Powell said:

“In my view, the two stole company assets when they took XRP without the approval of early investors, and without sharing the allocation amongst the other shareholders.”

But then again, it was just a view, and like Hodor says “only the company insiders know for sure”.

Securities and Exchange Commission [SEC]

During the Consensus Invest 2018, SEC’s Jay Clayton was asked multiple times about how and when XRP will be classified, to which he replied:

“We are open to people coming in to see us with their particular situation and I will tell you, some of these questions take time.”

The Howey Test is open to interpretation and by stating facts and pointing out that XRP is a security doesn’t make it so. Only time can tell as to what SEC will decide, and if it does decide to classify it as a security, what the implications could be for XRP and the community.

Implications:

XRP is a security

If XRP is classified as a security, the first thing that will happen is that there will be a massive FUD in the community and the price might take a steep decline, but the use case for XRP will remain the same nonetheless.

Clayton’s “no comment” response on XRP could mean that the asset is under investigation, and Bakkt recently showed interest in listing cryptocurrencies other than Bitcoin, knowing that Bakkt is backed by the parent company ICE and conveniently owns New York Stock Exchange. If we put two and two together, it could mean that SEC might be waiting for Bakkt to launch. But then again, this is pure speculation and most of all, this is a big if.

Furthermore, as per the SEC’s rules, XRP will be delisted from all the cryptocurrency exchanges and the legal framework governing securities would mean that Ripple would have to comply with the fiduciary obligations to their so-called shareholder. Significantly, a security classification would be a disaster for Ripple because, as per the US SEC security laws, hodling XRP would come with an entitlement to ownership, income, dividends, interest etc.

Although the above situation sounds grim it could also be a safe haven for XRP and Ripple as they will now be backed by the SEC and hence create a conducive trust-atmosphere around the asset, which could trigger investments by major institutions who wouldn’t otherwise invest in cryptocurrencies.

XRP is not a security

If the SEC rules that XRP is not a security and just another utility, the workings of XRP wouldn’t change, and all the FUD surrounding XRP and Ripple and the creation of XRP would be done with once and for all.

The upside of not being classified as a security could cause ripples [pun intended] in the XRP community and cause the prices to spike and hence push mass adoption of XRP and more partnerships with Ripple.

Institutional investors would invest in it no matter what its classified as, and instead of buying it from securities exchange they would buy it from exchanges like Binance, Coinbase or OTC.

Moreover, it would reduce the regulatory uncertainty in the space and lead to more investments in the asset.




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Akash is your usual Mechie with an unusual interest in cryptos and day trading, ergo, a full-time journalist at AMBCrypto. Holds XRP due to peer pressure but otherwise found day trading with what little capital that he owns.

Altcoins

Tron [TRX] energy cost to be reduced from 20 sun to 10 sun

Priya

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Tron [TRX] energy cost to be reduced from 20 sun to 10 sun
Source: Unsplash

The whole cryptocurrency market has been witnessing a steep downward trend for the past couple of weeks. Even the major cryptocurrency like Bitcoin [BTC], Ethereum [ETH] and XRP, have lost the battle against the ice king. This negative trend has broken down most of the new projects in the market, especially the investors’ sentiments. There are also a few projects and team that are finding it hard to continue their operations because of the bear’s ever-growing presence.

Despite this, Tron [TRX], the tenth-largest cryptocurrency by market cap, continues to make advancements in terms of network development. Justin Sun, the founder and CEO of Tron Foundation presented the second proposal, Proposal 9, has been approved by 2/3rd of the governing body. The proposal is aimed at making the network a developer friendly environment by reducing the energy cost from 20 sun to 10 sun, which, in turn, reduces the cost of smart contact.

Justin Sun's tweet on the proposal | Source: Twitter

Justin Sun’s tweet on the proposal | Source: Twitter

At the time of writing, the proposal had received 22 approvals and no disapprovals. The representatives who voted for the proposal includes Justin Sun Tron, Tron Society, BitGuild, Tron One, Lianjinshu, uTorrent, Crypto Guy in ZA, Infinity Stones, Alle Exchange, Tron Alliance, TronWalletMe, Raybo Tron, BitTorrent, Blockchain Org, CryptoChain, Sesameseed, callmeSR, DApp House, Tron Spark, TRX Market, Sky people, and Tron Europe.

The first proposal of the month was related to maximizing the energy limit of the network, which was also aimed at supporting the developers of the ecosystem. The proposal was approved by all 28 Super Representatives of the network. Super Representative are the representatives of the community and validators of the node who are elected by the token holders. These representatives are given the power to vote for the activation of the features of the Tron Virtual Machine, with the focus on the betterment of the entire community.

Earlier today, the CEO of the Foundation spoke about how Tron surpassed Stellar Lumens, the fourth largest cryptocurrency by market cap. He said on Twitter:

“According to @CoinMarketCap, there are 159 trading pairs of #TRON which already surpassed 157 trading pairs of Stellar. #TRX was already listed on more than 100 exchanges, including Crypto/Crypto & Crypto/ Fiat trading pairs”


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Analysis

XRP/USD Technical Analysis: Sideways movement to end as breakout imminent

Priyamvada Singh

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XRP/USD Technical Analysis: Sideways movement to end as breakout imminent
Source: Pixabay

As the cryptocurrency market switches their allegiance between the bull and the bear, XRP is painted red at the moment. The token is slumped by more than a percent wherein the coin is trading at $0.3 with the market cap of $12.4 billion. The 24-hour trading volume is calculated at $305.8 million.

1-hour

XRP 1-hour candlesticks | Source: tradingview

XRP 1-hour candlesticks | Source: tradingview

In the 1-hour price chart, the downtrend is ranging from $0.315 to $0.311 whereas the uptrend is extending from $0.301 to $0.308. A clear possibility of a trend breakout is visible as the prices are packed tightly, ready to explode in either direction.

The Parabolic SAR is bullish on the cryptocurrency as the dots have assembled themselves below the candles to support the bull.

The Aroon indicator is showing a greater strength in the downtrend, which is a bearish sign for XRP. However, it can be observed that the red trend is losing its power and crashing.

The Awesome Oscillator is slightly bullish on the coin as the bars have turned green at present.

1-day:

XRP 1-day candlesticks | Source: tradingview

XRP 1-day candlesticks | Source: tradingview

In the 1-day timeline, the downtrend is stretching from $0.51 to $0.31 whereas the uptrend has been observed from $0.27 to $0.3. A trend breakout is not visible as of now.

The Klinger Oscillator has made a bullish crossover by the signal line. This indicates that the reading line is traveling in favor of a green trend.

The RSI is extremely bearish on the cryptocurrency as the indicator has crashed to the bottom of the graph. A trend reversal is not expected as well, as the reading has not hit the oversold zone.

Conclusion:

In this technical analysis, it is clear that the indicators are giving a mixed sign, advocating for a sideways trend. However, since a trend breakout is predicted in the shorter timeframe, a bullish win might take over the price chart.


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