Last updated on September 23rd, 2016 at 05:00 pm
The alt coin known as Ripple(XRP) suffered a major blow to it’s value, after one of it’s developers, Jed McCaleb, announced his plans to sell off his personal holdings of Ripple in a post on a forum message board. McCaleb is a known figure within the world of crypto currency and a initial developer of Ripple, a silicon valley funded project considered by many to be a top contender to Bitcoin due to it’s mass funding by corporate entities.
In his shocking announcement, McCaleb was quoted as saying:“Because I have immense respect for the community members and want to be transparent, I’m publicly announcing this before I start. So just fyi.” Forum members expressed their disappointment and shock, and some even doubted the authenticity of the announcement. Mr. McCaleb returned to the forum to declare that he would make a small payment from a digital wallet with a very large balance of XRP in a way that others could verify through a signature. In order to dispel doubts about his identity , and intentions as stated in the post.
Ripple- A unique alt coin with potential
Much like the original decentralized crypto currency Bitcoin, Ripple allows for transactions to be executed by way of a blockchain. But that’s where the similarities end in comparison. Bitcoin uses a more costly and energy consuming process to verify all the transactions in their blockchain by having miners contribute to the process with their hash rate power.
Ripple’s system is vastly different in this aspect. By utilising ‘gateways’ formed through their partnerships with third parties, such as banks, money transmitters and foreign exchanges, these gateways form a network to approve the transactions from Ripple’s user base. Ripple functions as a go between mechanism for it’s partners and users. The transactions are validated and traded for IOUs designated in national currencies, thus users across the globe can exchange money cheaply without sending it through the cumbersome and time-consuming infrastructure of the international banking system. This more cost efficient method was highly touted to be the next best innovation in the financial sector, where many are frustrated at the multiple and troublesome processes involved with making global transactions.
Ripple is one of the few alt coins that have managed to gain the support of big investors, and capital investment sums. It’s appeal attracted investors through venture capitalist firms like Lightpeed Venture Partners and Google Ventures with contributions to the tune of around $6.5 million. This is not often repeated in the case of other alt coins that have to rely on technological improvements, and novel developments, to capture investorship from the ranks of the average crypto enthusiast.
The sharp plummet on Thursday after Mr.MacCaleb’s shocking announcement was a devastating 65% decline in Ripple’s value.
The development team and project leaders at XRP are eager to address the discontent of XRP’s investors- much of whom are concerned at how the corporate esque structure seem to have dropped the ball when deciding how much XRP was distributed and held by key members such as Jeb McCaleb.
One of XRP’s co-founders, Mr.Arthur Britto attempted to diffuse the situation and assuage such concerns felt by investors on a company owned discussion forum board.
“We’ve heard and shared your concern about the founders’ XRP allotment,” Mr. Britto wrote in a post made on behalf of the company. “Prior to today, we’ve been working on a founders’ XRP lock up plan… You can rest assured that a dumping event like this won’t happen from other co-founders.” Mr. Britto also added that “the short-term price of XRP does not hinder our ability to execute on the vision. Our company is well-funded. We’re not dependent on XRP.”
Its is unconfirmed at this moment as to the future plans of Mr. McCaleb, a much sought after talent within the crypto world. Besides Ripple, Mr.McCaleb has been known to work on unaffilated projects for other entities. If his past accomplishments are any sign of his business acumen, it is safe to assume his new endeavours will be well known in future to say the least. Before founding Ripple, Mr. McCaleb also formed the now notorious Bitcoin exchange Mt. Gox in 2010, which was later sold to Mark Karpeles, the beleagured CEO facing legal action for various charges. Mt. Gox collapsed late in 2013, and filed for bankruptcy protection in 2014.
On the various crypto related sub reddits, there has been a flurry of XRP investors looking to jump ship into other investments such as Reddcoin, Dogecoin, Karma, and even Darkcoin. These are the investors that feel they were left holding the bag as a result of the oversight on the part of XRP’s executives. Many are eager to ride the waves of success that Darkcoin is favored with. On crypto exchange Mintpal, a 57% increase led many investors to speculate if that is the next great venture in the crypto world.