A Reddit user who goes by the name “yannickmama” claimed some four months ago that Mr. Justin Sun (Tron’s founder and CEO) had scammed the Tron community by cashing out six billion dollars in TRX and running away.
The rumor soon reached many other online forums. It had Tron traders seriously trying to figure out what that would do to TRX‘s price. Ever aware of what’s going on on social media, Mr. Sun quickly addressed this situation in a series of tweets:
Mr. Sun was able to put the fire down and prevent a confidence crisis. Today, however, it seems that Tron enthusiasts have a new issue to worry about. Eighty-eight percent of the TRX currency is controlled by the top hundred wallets.
Tron and Moby Dick
They call them “whales.” Whales are those Tron investors who hold massive amounts of cryptocurrency, and they cause a bit of anxiety because they can create an artificial market fluctuation just by ordering a big buy or a big sell.
If there’s one thing everybody should know about financial markets is this: they’re not rational. Not at all. We would never experience global economic crises if they were. Financial markets are all about fear and greed, which is why they get us all into trouble every now and then (whether we participate directly in them or not).
A sale order triggered by only one of the whales, and even if it’s just a fraction of their holdings, could be huge for a typical day in the market. This would create panic among traders and would drive the coin’s price down. By the same token (no pun intended) a large buy order can increase the price artificially but it would make smaller investors confident, so overall demand would increase.
The thing is that most cryptocurrencies have been trading in the green lately, which means they’ve been gathering value. And the only way you make a profit from the current rising trend is to cash your digital assets out.
The better the market trend is, the more tempting this becomes. Especially for whales. That would leave the smaller investors in the cold. Keep in mind that Tron started valued at fractions of a cent and it’s now at $0.072, and that happened since last September only, it’s been a rapid rise.
The Bitcoin analogy
Yes, Bitcoin is still THE cryptocurrency so let’s see what this situation is in its case.
For Bitcoin, forty percent of the currency is held by a thousand wallets. This has been enough to worry some cryptocurrency investors. After all, the mythical Satoshi Nakamoto (the blockchain’s creator, Bitcoin founder, and anonymous code writer whose real identity remains unknown to this day) was very vocal in explaining that the whole point in Bitcoin was to get rid of the banking system and credit card companies precisely because they are controlled by a minimal set of very affluent individuals.
In other words, these trends in Tron and Bitcoin are defeating the original cryptocurrency purpose by reproducing the same environment as in the financial system in which a few can dictate terms to everybody else. The Bitcoin distribution of wealth is bad enough, but Tron’s is probably so much worse.
Etherscan’s public data is enough to see that, indeed, only a hundred wallets hold eighty-eight percent of Tronix (TRX).
So far nothing fishy has happened, but just imagine that a group of these whales comes together and agree to use their vast assets in order to manipulate the Tronix price for their own gain. This is possible as many whales are known to be friends, or at least to know each other.
That wouldn’t be fair play, of course, and this kind of behavior is penalized in traditional markets. But cryptocurrencies and their markets are still unregulated, so this kind of scheme would not only be possible but, believe it or not, legal (not criminal at the very least). And it would be hell for Tron’s smaller investors (which in this case means all the rest)
Tron and wealth concentration: What’s the future?
Cryptocurrencies, their exchange, their value and their popularity have grown exponentially recently, and regulators have just not kept up. They are only starting to notice it now.
Is price manipulation the same as fraud? Well, it’s still a grey area. Most laws and investors consider price manipulation to be foul play, but it is not inevitably a criminal activity, according to laws. Bittrex has worked hard to prevent this kind of situation. Also, every token has a different structure, some of them could be eventually classified as a security (Ripple is facing that problem right now) so different tokens will have to be regulated in different ways, most probably.
Cryptocurrency hedge fund managers tend to closely follow any activity by the whales in order to gain insight into the market. This information can indeed be handy, but only when it’s interpreted correctly. And that correct interpretation is tough to come by when you don’t have direct access to the inner circle, so it all remains guesswork.
How can we fix it?
Confidence in Tron’s future performance could make the whales keep their TRX. But continued good performance will also increase their temptation to cash out as selling is the only way to rip the financial benefits.
However, if TRX really becomes a currency that can be used in the real-world, then the whales would be better off spending their tokens in the real-world rather than selling them in exchanges. This would considerably lessen the risk for the smaller investors.
The fact remains that, even with this situation looming on the horizon, there are still plenty of reasons to be optimistic about Tron. The Main Net launch is just seven days away, and the rumor has been circulating about an imminent Coinbase listing.
But the question remains, how can we fix it? Sadly, the answer is that we can’t, but maybe Justin Sun can. Will he? At this point, only he has those answers.
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Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.
Image courtesy of Pxhere.com
TRON Partnership Involves Cloud Computing
It has been almost an entire week since Justin Sun, the founder of TRON (TRX), announced a new big partnership for this cryptocurrency. His Twitter announcement did not provide a lot of information, except for the fact that the TRON partnership is with an industry giant worth tens of billions of dollars.
— Justin Sun (@justinsuntron) October 12, 2018
Even so, the entire crypto community started speculating about the new partner’s identity. Soon after the announcement, a new rumor emerged, claiming that the identity of an unnamed corporation was uncovered. According to the rumor, TRON’s new partner is none other than Baidu, one of the largest tech giants of China, which also represents this country’s largest internet search provider.
Baidu is often viewed as China’s version of Google, and if the rumors of a partnership with this company turn out to be true, this will be a big game-changer for TRON.
However, in days following the announcement, new reports started coming in with claims that the partnership will not revolve around blockchain technology. Instead, ODaily reported that the alleged partnership between TRON and Baidu will be focused on cloud computing. The report claims that TRON will be purchasing computing resources from Baidu.
Will Ripple (XRP) advocacy hike affect bitcoin dominance of China?
Currently, China is leading in Bitcoin mining industry by far, second to none for bitcoin mining power. Literally, it’s contributing over 70% of the network’s hash rate (a term that is used in describing the total processing power of a blockchain network). But how Ripple fits in here and what it has to do with that? We’ll talk about that a bit later below, let’s cover some in-depth facts about China’s dominance over Bitcoin first.
It’s a near-complete dominance by China on the BTC mining grid that has made it responsible for mining a majority of circulating bitcoins. A Beijing-based company, Bitmain Technologies, is highly responsible for extracting the significant part – more than half of the globe’s bitcoin, and alone, it has approached 50% of the total hash rate more than once.
The fact that China is controlling a majority of Bitcoin hash rate, clearly tells that it has the power of manipulating or merely destroy the bitcoin network if it gets enough support should it decide to take such a move. Therefore, this has led to serious concerns among countries including the US that China might get an edge in this cryptocurrency industry and possibly becoming a potential threat.
China is the biggest manufacturer of Bitcoin as well as cryptocurrency mining equipment. The reason behind the massive growth of mining farms in the country is because of cheap electricity bills.
Furthermore, the country has adopted several…
Ravencoin (RVN) Surges Following Binance Listing
While most cryptocurrencies today still remain unstable and at the edge of falling into the red, there are some coins that are doing significantly better. One such coin is Ravencoin (RVN), which has surged by over 26% in the last 24 hours.
Ravencoin came to be as a hard fork of Bitcoin and was inspired by a popular book series-turned-television programme, Game of Thrones. The coin’s developers decided to make Ravencoin an open-source project that provides users with the ability to declare assets on their platform. The platform itself is decentralized, transparent, and secure.
Just as Game of Thrones’ ravens are used for spreading the news and truth, Ravencoin hopes to become a carrier of truth regarding the ownership of assets on the blockchain.
Ravencoin’s main use case is for performing P2P transfers, while it prioritizes security, autonomy, user privacy, and control. Additionally, as a coin fighting for truth and transparency, it also stands against censorship.
Ravencoin got listed on Binance prior to MainNet launch
Following the last week’s announcement that Ravencoin is getting officially listed on Binance, the world’s largest cryptocurrency exchange ba trading volume, Ravencoin experienced a large price surge. At one point, the surge took the coin’s value up by over 31%. At the time of writing, however, the coin is still growing, with an increase of 26.15% in the last 24 hours.
Getting listed on Binance has brought Ravencoin to the top…
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