Ripple hit by dispute over founders' initial stake in the currency

http://www.followthecoin.com/ripple-attack-dogs-descend-resigned-board-member

by FatalLogic • 12 years ago

2 3 12 years ago

FatalLogic2• 12 years ago

The person who posted the linked legal demand is Jesse Powell, an ex board member of Ripple Labs, who resigned yesterday.

Complicated story. Here's some background.

Ripple is known as a digital currency and currency exchange network, although that's a simplification. Some of its functions are comparable to Bitcoin. http://en.wikipedia.org/wiki/Ripple_%28payment_protocol%29

Three founders of Ripple Labs, Jed McCaleb, Chris Larsen and Arthur Britto, gave themselves 20% (20 billion units), of the currency (known as XRP or Ripples) which is used by the Ripple protocol [1]. McCaleb's share was 9 billion XRP. A few days ago, McCaleb unexpectedly announced he will soon start to sell what remains of his share. As 9 billion is more than the total amount of XRP currently in circulation, the price of XRP fell 40%-50% after his announcement, cutting about US$30 million from the total value.

At the price today, the money supply of all XRP in circulation is worth US$28 million. The value would be $370 million if calculated for the total of 100 billion units of XRP that exist.

About Ripple Labs: http://en.wikipedia.org/wiki/Ripple_Labs

[1] Jed McCaleb's announcement that he is selling: https://xrptalk.org/topic/2629-selling-my-xrp/

Jed McCaleb on Reddit: http://reddit.com/user/Swamp12

Jesse Powell on Reddit: http://reddit.com/user/jespow

pyalot2• 12 years ago

The folly of premined cryptocurrencies is a well explored and established fact in the realm of altcoins. Somehow ripple thought they where immune.

FatalLogic2• 12 years ago

The folly of premined cryptocurrencies is a well explored and established fact in the realm of altcoins.

I don't know if the folly of premining was established before, but it is now. Ripple will be an example to anyone who says this can't happen because nobody would depress the value of their own stake like McCaleb has done.

In the long run, it's good for Ripple that these large amounts of money will no longer be in one set of hands, if it survives, but it's not good for anyone who hoped to make a quick profit from owning XRP.

Bitcoin also has an issue with a large quantity of coins held by the developer.

Ripple hit by dispute over founders' initial stake in the currency

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