• Ripple’s CTO highlights individuals’ right to sell digital assets.

  • Tax implications drive the necessity of selling XRP, said David Schwartz.

  • Alternative distribution methods face hurdles, including tax concerns and susceptibility to fraud.

In a recent series of tweets, David Schwartz, the CTO of Ripple, engaged in a candid discussion regarding the distribution of XRP, Ripple’s native digital asset. Addressing concerns about centralized control and concentration of XRP, Schwartz provided insights into the challenges Ripple faces in ensuring a fair and equitable distribution of the cryptocurrency.

Schwartz started by highlighting the fundamental nature of digital assets, stating that holders can sell them without the need to seek permission from anyone. He stressed the misconception that buying digital assets is inherently more virtuous than selling them, emphasizing the individual’s autonomy in managing their holdings.

Everyone who holds a digital asset can sell it if they wish to. Nobody has any obligation to you not to sell their digital assets. Buying is not somehow morally superior to selling.

— David "JoelKatz" Schwartz (@JoelKatz) March 24, 2021

The CTO further delved into the personal implications, revealing that even he, as a prominent figure within Ripple, would be compelled to sell a significant portion of any XRP bonus received. Primarily, this stems from the elevated tax rates on earned income.

If Ripple gave me a 1,000,000 XRP bonus tomorrow, I would have no choice but to sell about half of it very quickly because my marginal tax rate (Fed + CA) for earned income is around 50%. Distribution is very hard.

— David "JoelKatz" Schwartz (@JoelKatz) March 24, 2021

Responding to suggestions on alternative distribution methods, such as placing XRP into automated market maker (AMM) pools or utilizing reward mechanisms, Schwartz offered nuanced perspectives. He explained that these methods effectively result in selling XRP or pose additional challenges, such as tax implications and vulnerability to fraud.One suggestion involved emulating the approach of other platforms like Enosys, which incentivize users with XRP rewards. However, Schwartz dismissed this as functionally equivalent to selling, emphasizing the risk of exploitation by fraudsters and the ineffectiveness of such strategies as XRP liquidity increases.

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