Ripple coins, an alternative to Bitcoin, took a dive this Thursday when founder Jed McCaleb announced that he will be liquidating his whole stake. The announcement caused the price of Ripple coins to dive 65% over a 24-hour time frame after McCaleb made the announcement. He wrote on a Ripple message board,
“I have given away and donated some of my 9 billion XRP to charities such as MIRI, Literacy Bridge, Give Directly, Mission Bit and others. I plan to start selling all of my remaining XRP beginning in two weeks.”
McCaleb explained that he is announcing this because he has “immense respect for the community members” and wanted to be completely transparent before starting the liquidation.
Ripple Takes a Dive
A few users questioned whether it was really Jed McCaleb who posted the announcement, or perhaps it was an imposter. In response to the inquiries, McCaleb made a payment of 1XRP from a digital wallet with a large balance of XRP. This confirmed McCaleb’s identity and as a result Ripple price continued to drop.
“We’ve heard and shared your concern about the founders’ XRP allotment. 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.”
He also mentioned that the short term price value of XRP doesn’t
“hinder our ability to execute on the vision. Our company is well-funded. We’re not dependent on XRP.”
Jed McCaleb extracted himself from the Ripple Labs effort during the summer of 2013. He announced in February that he was working on a secret project of sorts, and this might be a reason for his decision to liquidate.
Similar to Bitcoin, Ripple is also decentralized and has no authority figure overlooking transactions. However, unlike Bitcoin which depends on miners for transactions, Ripple depends on a system of consensus among its “gateways.” These gateway partners are third-parties groups such as foreign exchange traders, and banks.
Image via Ripple Labs