XRP Is A Cryptocurrency Like The USS Zumwalt Is A Boat
Tiffany Hayden
1.1K8

Hey Tiffany, I do enjoy your style and content regarding cryptocurrencies.

I am educating myself about cryptocurrencies and presently have a small stake in 7 different coin (of 4 distinct technologies), including XRP. Having a stake helps me take my education seriously!

One thing about XRP that you didn’t dig into is the holding and release into circulation of the fixed supply of minted XRP coin. My understanding is that Ripple (the company) holds the vast majority of the coin, like more than 98%. They disburse it via banks to support their growing settlement business (i.e. they sell it to banks, presumably at a discount). As such, at this time, they are a company controlling the supply of a currency (sort of like the way a start-up’s owners control the bulk of the company’s stock).

If things go well, we can expect them to be very careful to preserve the value of this currency for their customers, the banks. But, it’s easy to imagine that if things went sour for them, they might sell large amounts of their coin, e.g. to raise cash to prevent bankruptcy. That is, as long as they hold a large fraction of the coin, they have the power to significantly dilute the value of all our holdings. There are many interesting effects to consider as the amount of XRP in circulation increases.

See XRP Chat: https://www.xrpchat.com/topic/6026-what-are-the-precise-mechanics-of-ripple-distribution/

-Hugh

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