The initial distribution of cryptocurrencies such as XRP has always been a hot topic for investors in the crypto community. A lot of times, the discussions stem from the fact that investors believe there was some 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 events that took place at Genesis. As a result, Ripple CTO David Schwartz has taken it upon himself to clarify these issues.
What Happened To The Genesis Block?
David Schwartz first drew criticism from the Bitcoin community with a tweet earlier this week where he mocked the opinion of a Bitcoin maxi he supposedly had a conversation with. This conversation, where the Bitcoin maxi had seemingly called XRP worthless, and Schwartz mocked the opinion as worthless, would quickly devolve into a debate for XRP’s legitimacy in no time.
Responding to Scwartz’s post, X user @MetaMan_X asked the Ripple CTO if there was any other blockchain that had lost its entire genesis block. Now, for those who do not know, the XRP Ledger starts at #32,569 instead of at #1 as would be expected from a blockchain. This has always been a point of contention as
The Ripple CTO, however, defended the XRP Ledger by saying “The choice of what to consider the genesis block is arbitrary.” He further compared the blockchain to that of the Ethereum blockchain, saying that the second-largest cryptocurrency in the world also had similar hiccups at the start.
He points to a single transaction carrying more than $6 million worth of ETH which apparently has no point of original. Schwartz explains that even Ethereum had transactions that were not on the blockchain, and he would know because this massive transaction was carried out by himself.
Token price struggles to keep up | Source: XRPUSD on Tradingview.com
How Was The XRP Supply Distributed At Genesis?
Schwartz further went on to defend the XRP Ledger from those who asked him to provide any transactions that were included in the genesis block. According to him, there were actually no transactions included in the Genesis block. Furthermore, out of the 32,570 ledgers that are currently missing from the blockchain, the Ripple CTO revealed that there were only 534 transactions in those blocks. So now, all of those transactions are presumed to be lost with those initial blocks.
Another piece of information that the Ripple CTO provides is how the total XRP supply was initially distributed at the start. Apparently, the founders had received 20% of the total supply at the start, with Jed McCaleb and Chris Larsen getting 9% of the total supply each. Then a third founder, Arthur Britto received 2%, completing the 20% allocation to founders.
The vast majority of the supply would go to the company, OpenCoin (now known as Ripple), with 99.99% sent to the company’s wallets. Then then remaining 0.013% would end up going to Beta testers and developers on the blockchain.
This revelation provides insight to how the XRP distribution was handled and why Ripple holds such a large chunk of the supply. Currently, the company releases one billion coins from escrow every month, with 200 million tokens kept for the cost of operations and 800 million sent back to escrow.