Causing more than just a Ripple

If you’re new to the world of cryptocurrency and blockchain one of the first cryptocurrencies that probably comes to mind besides Bitcoin and Ethereum, is… no, not Doge or CumRocket but - XRP.

XRP is one of the longest-standing top-ten crypto's by market capitalization yet has become one of the most controversial topics within the crypto space due to its "relationship" with Ripple and their current ongoing lawsuit with the SEC which we will dive into later. 

Here’s what XRP looked like back in 2013

Here's what XRP looked like at the end of June 2021

During the summer of 2020, while South Africa moved through the different COVID-19 restriction levels faster than a Home Affairs queue, crypto was gathering momentum following about 900 days of range-bound price since the 2017 crash.

Diamond hand ‘hodlers’ and newbies to crypto enjoyed exponential returns, unrealized gains of course. Yet, in a quick and humbling fashion for one of crypto’s most infamous cryptocurrencies, XRP, this came crashing down like a beautiful tower of cards blown by autumn winds. Over 60% of the gains were wiped out as prices fell from 0.52c on December 22nd to as low as 0.18c on some exchanges.

So, what the (insert your choice of colorful words) happened to XRP?

Before diving headlong into how we got into the throes of the Ripple and XRP saga and differentiating between the pair, it might be helpful to start by highlighting what cryptocurrencies are and their relationship with the blockchain since they are often confused (yes, there is a difference).

Cryptocurrencies like XRP, are virtual currencies that operate on a decentralized network based on blockchain technology such as the XRP Ledger. A blockchain provides a tamper-proof record of legitimate historical transactions. You can think of the XRP ledger as the operating system and XRP as an application running on that system.

Unlike traditional currencies, there is no central point of control. The blockchain relies on a network of participants like you and me, from different geographic areas, to validate these transactions through a consensus protocol (we need to agree on what is legitimate or illegitimate) we will further elaborate on this through the section on XRP.


Ripple is a private Fintech company that develops payment solutions for banks, non-financial institutions, and exchanges by using their Ripple protocol and RippleNet.

In the Ripple ecosystem there is xCurrent, Ripple’s enterprise software solution that allows banks to settle cross-border payments, xRapid that enables institutions to leverage the digital asset – XRP – for on-demand liquidity and, xVia, a standardized payment interface into the RippleNet. Ripple has also been backed and funded by industry heavyweights such as Standard Chartered, Accenture Ventures, Google Ventures and SBI Holdings.

While Ripple was established in 2012, the genesis of the vision goes back to 2004. The purpose was to develop a payment protocol and decentralized platform then named Ripplepay. The developers of the XRP ledger, Arthur Britto, Jed McCaleb, and David Schwartz together with Chris Larsen approached Ripplepay founder, Ryan Fugger, to form a company that is today known as Ripple.

It is common for individuals to confuse Ripple and XRP considering the large amount of XRP held within escrow by Ripple, their heavy utilization of the ledger and the similar team behind the development of both projects. Ripple holds over 50% of the XRP supply, this came as a donation to the company in its early stages to ensure the sustainability of the company.

While Ripple is a Diamond hand ‘hodler’ of XRP it is definitely not the creator. This false narrative of who the real creators are is often accompanied by claims of centralization of the XRP ledger which say it can be controlled and manipulated since Ripple hold so much of the digital asset. This narrative has been perpetuated by some Bitcoin Maximalists who viewed XRP as a potential threat.

The supply held by Ripple was placed into escrow to provide predictability to supply. According to the escrow schedule by Ripple, each month one billion XRP is released but tends to be placed back into a series of escrows or sold in part to the market, to fund the company’s activities. XRP held by Ripple belongs partly to shareholders, to whom Ripple has a fiduciary duty and to reiterate or to state the point differently, their holdings of XRP do not equate to control of the blockchain.

Recently, Ripple has proved to be a key player in the development of Central Bank Digital Currencies (CBDCs), a sovereign equivalent of private cryptocurrencies which are issued and controlled by Central banks. Leveraging RippleNet technologies and the XRP Ledger, Ripple piloted a private ledger for Central banks launching CBDCs for central banks to provide a secure, controlled, and flexible means of issuing and managing digital currencies.


XRP... yes, just, XRP and not Ripple- is the digital asset native to the XRP Ledger. XRP was also created in 2012 but precedes the creation of Ripple. The blockchain was essentially built to be a better Bitcoin… faster, more cost-effective and more energy-efficient than it or any other available cryptocurrency at the time… Hey Elon, where are you?

100 billion of the XRP digital assets were created at inception. Similar to Bitcoin, the official supply limit cannot be increased or decreased.

Traditional payment settlement systems today mostly use dollars as a dominant currency when converting into different currencies. XRP exists to replace this to become a bridging currency without needing a central intermediary. It would drastically reduce the cost of transacting, additionally, the use of XRP would increase liquidity for both financial institutions and companies transacting through the blockchain. It is especially beneficial in emerging markets where accounts are often required to be pre-funded, and the local currencies are illiquid.

In the simplest terms, XRP offers institutions and businesses an efficient, scalable, and reliable liquidity option for cross-border payments. The antiquated processes to transferring funds are now being redefined and can be completed within seconds rather than waiting days for formal settlement and needing multiple other institutions where there are no direct relationships between financial institutions.

The volatility aspect within crypto may be a cause for concern for some when exchanging from currency into XRP but with a short settlement window, the risks of volatility are minimized with speeds currently scaling up to 1,500 transactions per second.

Institutions using XRP and the ledger would also not need to buy and hold XRP for transacting. They would only need to hold XRP if they acted as an exchange between the digital asset and Fiat or if they required reserves of the digital asset.

The XRP ledger or blockchain is an open-source technology with no central control, on which XRP is run as mentioned previously. It is a public, distributed and real-time protocol for anything of value. All individuals can freely develop on the ledger or participate without being censored or stopped. Any individual may run a node that is responsible for validating transactions, and anyone may transact without needing permission. The validators of the XRP ledger perform the necessary functions to keep the system efficient and secure. They each store copies of the blockchain and participate in the consensus process.

The consensus protocol is how common consensus regarding the present state of the blockchain is reached, it is essentially what allows the blockchain to be decentralized. They are the backbone of the blockchain allowing the nodes in the network to validate transactions.

Many may be more familiar with Bitcoin's proof-of-work (PoW) consensus protocol, which rewards miners for solving complex equations. Bitcoins protocol is a costly process that is equally energy and time-intensive. The XRP ledger instead makes use of validators. These validators do not have financial incentives for validating transactions; moreover each has its unique reasons to ensure the network runs efficiently.

To briefly explain how a validator system works, imagine with your eyes closed that a blind person has R10 in their left hand and R20 in their right hand. In finding out which hand holds which note they do not have to trust a specific individual to tell the truth if they ask multiple individuals that have no relation and are spread geographically.

Similarly, the goal of validators is, for the majority of them, to give a consistent answer that will be taken as the truth to validate the information. The XRP ledger currently consists of more than 100 validators that are geographically spread across the globe which ensures decentralisation. There is no central point of control for the validators and Ripple owns less than 5% of the available validators. A unique list of trusted validators is compiled by Ripple and the XRP foundation which participants may choose to use.

If the high concentration of XRP placed in Ripple’s escrow ever became a threatening issue, the nodes, validators, and the community at large could choose to vote and burn Ripple’s escrow as mentioned by the CEO, Brad Garlinghouse. The process of burning crypto involves removing a token from the circulating supply permanently. Often burning occurs to increase scarcity due to the positive impact on price but in the case of Ripple, this would be from stopping the company from holding so much of the supply.


All eyes have been on XRP since more than half of its gains were erased in the middle of one of its biggest rallies in years. This can be owed to the SEC lawsuit against Ripple alleging that they had sold over $1.3 billion in unregistered securities of XRP since the launch of the crypto.

There have been over 70 similar cases in the last 5-6 years against companies involved in initial coin offerings (ICO) but contrary to this case those companies held ICO’s before the creation of the ledger whilst the XRP ledger was already in existence when Ripple was formed.

The action has resulted in a loss of partnerships for instance, with MoneyGram and Tetragon. At the same time, popular U.S-based exchanges such as Coinbase, Binance, and OkCoin either delisted the coin completely or suspended trading and purchases on their exchanges. Bitwise, one of the world’s first crypto index funds, has also since liquidated its positions.

This case is particularly important as it sets a precedent regarding regulation and the power of the SEC for the rest of the cryptocurrency industry with XRP being the first top ten cryptocurrencies to be directly involved in such a case.

According to Jeremy Hogan, an attorney commentating on the case, the most important concerns in the litigation are the SEC’s lack of due process and fair notice to whether XRP is a security.

The fundamental argument by Ripple lawyers is that the SEC was informed about XRP by Ripple and various exchanges but never once gave notice of it being a security. They also stated that they had consulted lawyers who never advised that it was an illegal sale of securities. During the latest hearing, an SEC lawyer made mention that Ripple would possibly push towards a summary judgement on the due process and fair notice concern. A victory at such a hearing would of course end the case but not provide clarity on whether XRP is a security or not.

According to the court filings, Ripple has filed for a motion to compel the SEC to turn over internal discovery documents on Bitcoin and Ethereum which has been delayed since May. The revelation from this discovery is something to watch closely for the entire industry especially with the current negative sentiment on Bitcoin. The current progress of the case and continued requests for documents and time extensions do seem to indicate that there would be no settlement on the case soon.

On the opposite end of the case, if it were to end in a loss for Ripple, their operations are able to continue without the use of XRP. While the RippleNet ecosystem leverages the XRP token for liquidity through their xRapid offering, this is not mandatory as they could just use their xCurrent offering. In an interview with CNN, the CEO had reiterated these points to say, Ripple could march on without the XRP-based settlement platform.

XRP to $10,000 ?!

While wins in preliminary rulings do not necessarily foreshadow a Ripple victory, they have had some success thus far concerning gaining access to SEC internal documents and winning in motions where SEC requested documents between Ripple and their lawyers.

A win for Ripple in the case and clarity would mean potential relisting’s on the mentioned U.S-based cryptocurrency exchanges with no further actions possible on the matter. This could place XRP back in the spotlight as retail market participation increases through these exchanges. XRP is the only top 10 cryptocurrency that has not yet cleared its all-time highs since the beginning of the bull run and this ‘suppression’ can be partially attributed to the lawsuit.

The XRP community over the years has proved to be the most resilient and at times even more optimistic than Arsenal fans thinking they will be playing European football anytime soon. Price predictions that have been thrown out by Moon boys and analysts have ranged from $20 up to $10,000.

Rumour has it Ric Flair will be handing out Ferrari’s if this were to happen.

Personally, I do not believe XRP is likely to reach $10,000… at least not in this decade. As of writing the current market capitalization of XRP is around 29 billion rounded up , anything above $12 would result in 'the flippening', an event where another coin grows bigger than Bitcoin. This is highly unlikely to be XRP anytime in the near future.

Considering that Ripple has made it clear their target market is not retail but instead institutions such as banks and mentioning their goal of one day replacing the Dollar as the currency of exchange. If XRP becomes one of the first cryptocurrencies to receive clarity from the SEC and moves towards becoming more of a disruptor to the SWIFT system, this could potentially be the beginning of a long-term move towards all time high prices for XRP.

A price prediction would ultimately come down to a few factors including integration within the banking system, the possibility of replacing the SWIFT system, other use cases and the currencies market cap.

Institutions leveraging XRP and more widespread adoption would create an added demand for liquidity which would in turn positively impact price. If it does become integrated within the banking systems, banks might not only leverage the blockchain but also hold XRP within their reserves. The use cases for XRP expand further than simply cross-border payments, with some contracts use – DeFi through Flare Networks and Flare Finance, music with Audiotarky and tokenization of financial assets through Sologenic.

Therefore, while a $10,000 price tag seems quite far-fetched, a double-digit and possibly triple-digit XRP seems more realistic considering the aforementioned. XRP is certainly not a Moon boy’s token, it will teach you more patience than Fourways traffic on a Wednesday afternoon. Replacing an antiquated system is not a short-term or easy task, the full potential is likely to only be realised in many, many moons.

Never yolo your life savings into crypto, nothing is ever guaranteed.

The one thing you should always remember is if the Tendieman comes and sends your crypto rocket into the sun, never find yourself caught as the last Diamond hand and in the face of Elon tweet volatility, never become the first paper hand.

This article is published in collaboration with Altvest, exploring different alternative investment classes. 

Altvest is a disruptive platform democratising private equity by creating access for retail investors to own opportunities previously exclusive to high net worth individuals

To find out more about Altvest, have a look at their website: Altvest Capital

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