Article by Forbes: Thomas Silkjær
The last year has seen significant steps toward custody solutions and insurance of cryptocurrencies. It’s an essential development towards storing savings in cryptocurrencies and not having to relate to the technical side blockchain, such as creating a ledger account, signing transactions and keeping private keys secure, but still have funds insured in case of the custody provider being hacked.
These solutions will, and already have changed the picture of the ledgers. Instead of having one account per user, several users share larger accounts owned by custody providers.
On the XRP ledger, unlike most other blockchains, accounts require activation. Anyone with an account on the ledger can activate a new account, by sending the “base reserve”, which is currently 20 XRP (~ $6 USD). “Reserves” are an amount of XRP you lock in return of owning an object on the ledger. This activation mechanism serves the purpose of protecting the ledger from, e.g. denial-of-service attacks, spam and other malicious use. The trade-off is that the base reserve amount is locked and accounts are unerasable (which may be subject to change in the future if validators vote in support of an amendment enabling DeletableAccounts).
In this visualization, “Birth”, all accounts on the XRP ledger is represented by a dot, and all activations are represented by a line (labelled version below). Scope: January 1, 2013, to April 30, 2019.
Besides being an eye-catching visualization, the graph clearly shows the centrality of exchanges. Initially, a new activation would require a user to know someone who could activate an account, but gradually, as exchanges listed XRP, they became new hubs for wallet activations.
Impressively, only 149 accounts have activated more than 500 accounts, collectively responsible for activating 1.11 million accounts on the network. The three biggest being Binance with 167,000 activations, GateHub with 148,000 activations and Bitstamp with 118,000 activations – this despite the Binance account being activated in November 2017, compared to Gatehub in February 2015 and Bitstamp in December 2016.
Showing the history is difficult in a static visualization – this video will give you an impression of the network expanding over time, highlighting the labelled accounts along the way.