The initial distribution of cryptocurrencies like XRP has always been a hot topic for investors in the cryptocurrency community. In many cases, the discussion begins with the fact that investors believe there was foul play at Genesis where some people received an unfair share of the token supply.
The latest coin to come under scrutiny is the XRP token, with community members asking questions about some of the events that occurred on Genesis. As a result, Ripple CTO David Schwartz took it upon himself to clarify these issues.
What happened to the Genesis Block?
David Schwartz first drew criticism from the Bitcoin community earlier this week for a tweet mocking comments about the Bitcoin maxi he was supposedly talking about. With Bitcoin Maxi outwardly calling XRP worthless and Schwartz ridiculing that opinion as worthless, this conversation would quickly devolve into a debate about the legitimacy of XRP.
In response to Scwartz’s post, X user @MetaMan_X asked the Ripple CTO if there were any other blockchains that had lost their entire creation blocks. Now for those of you who don’t know, the XRP ledger starts at #32,569, not #1 as expected on the blockchain. This has always been a topic of debate,
However, Ripple CTO defended the XRP Ledger, saying “the choice of what to consider for the genesis block is arbitrary.” He also compared the blockchain to the Ethereum blockchain, saying that the world’s second-largest cryptocurrency initially suffered from similar problems.
He pointed to a single transaction carrying over $6 million of ETH, which apparently had no original whatsoever. Schwartz explains that Ethereum also had transactions that were not on the blockchain, and that it would have known about these large transactions because they occurred on its own.
Token price struggles to keep up | Source: XRPUSD on Tradingview.com
How was XRP supply distributed on Genesis?
Schwartz went on to defend the XRP ledger from those who asked him to provide transactions included in the genesis block. According to him, the genesis block actually did not include any transactions. Additionally, out of the 32,570 ledgers currently missing from the blockchain, the Ripple CTO revealed that there are only 534 transactions in that block. Therefore, it is now assumed that all transactions were lost due to that initial block.
Another piece of information provided by the Ripple CTO is how the total XRP supply was initially distributed. Apparently, the founders initially received 20% of the total supply, while Jed McCaleb and Chris Larsen each received 9% of the total supply. The third founder, Arthur Britto, then received 2%, completing the 20% allocation to the founders.
The majority of the supply goes to a company called OpenCoin (now known as Ripple), with 99.99% being transferred to the company’s wallets. The remaining 0.013% will then eventually be passed on to beta testers and developers of the blockchain.
This disclosure provides insight into how XRP distributions were handled and why Ripple holds so much supply. Currently, the company issues 1 billion coins out of escrow each month, with 200 million tokens held for operating expenses and 800 million tokens transferred back to escrow.
Featured image from YouTube, chart from Tradingview.com
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