Conflicting Crypto Community Confusion Ensues On How Ripple Created The XRP Token
Ripple And The Confusion Behind How XRP Was Created
XRP is currently the second largest cryptocurrency by market capitalization. Although this year was very hard for virtual currencies, XRP was recently able to surpass Ethereum (ETH) as the second largest crypto.
We also know that there are some discussions regarding XRP and Ripple. Ripple tried to differentiate itself from XRP. Ripple is a company that works with XRP but XRP does not depend only on Ripple.
However, there are still some things that remain unclear. For example, there is a lot of speculation regarding the creation and origin of the XRP virtual currency. There are some facts that show one thing, but Ripple’s officials say different things.
The co-founder of Ripple, Chris Larsen, alongside the Chief Market Strategist Cory Johnson, explained that XRP is not used and created by Ripple.
In an infographic released by AmbCrypto, it is possible to see the hat in October 2014, the company sends a letter to the NYSDFS Services informing about the Ripple protocol. In this letter, they inform that this protocol enables payment in fiat and virtual currencies including the digital asset developed by Ripple Labs, XRP.
In March 2017, the company informed that Ripple Labs created 100 billion XRP within the Ripple network and that the supply will never increase over time. Later in May, they informed something similar, saying that Ripple Labs is the creator of Ripple and that 100 billion XRP was created with the Ripple protocol.
However, in July 2018, the company informs the difference between Ripple and XRP. The XRP Ledger cannot be owned by any single entity and it exists independent of any other person or business.
Nevertheless, McCaleb and Johnson clarified that XRP is not a security and it was not created by Ripple. Brad Garlinghouse, Ripple’s CEO, mentioned that the XRP ledger would continue to operate independently from Ripple.
In the past, Garlinghouse commented:
“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.”
The Twitter user Mike Dudas wrote a tweet in which he contrasts the different positions that were taken by Ripple during the lasts years. In 2013, he mentions that Ripple Labs created 100 billion XRP, while in 2018, the company informs that they did not create XRP but they were created before the company was formed.
Mike Dudas continues with a very interesting thread about XRP, Ripple and whether it was created by Ripple or not.
The Twitter user XRP Trump mentioned that XRP was created back in May 2012 and that Ripple was formed in September 2012. This is why he provided information from the Github repository and the Founder’s agreement.
If XRP is considered a security by the U.S. Securities and Exchange Commission (SEC), the price of XRP might decline as a result of the announcement. Nevertheless, the use case for XRP would remain valid.
Following the SEC rules, XRP would have to be delisted from all crypto exchanges and the company would have to follow the legal framework that currently applies to securities. Holding XRP as a security would mean that Ripple would have to provide entitlement to ownership, income, dividends, interests, and more.
Additionally, being classified as a security could also have positive implications for XRP and Ripple. As the asset will be regulated by the SEC, it would allow investors and several institutions to place their funds in Ripple and XRP. Remaining as a virtual currency, many companies would have never been interested in purchasing XRP or investing in Ripple.
If XRP is not considered a security, the FUD related to XRP would disappear and the community and company would be able to focus on the development of the Ripple protocol. This could also help XRP prices spike and improve adoption of XRP. It could also help Ripple sign new partnerships with different companies around the world.
With a higher price of XRP, the possibilities also increase since it will be possible to start moving more funds between companies and interested parties. Additionally, the regulatory uncertainty in the crypto market will also be reduced.