The Search for Real Value in the Crypto Market



I blog about Ripple & XRP. FULL DISCLOSURE: All views are my own. I do not work for Ripple; I am not a professional financial analyst, and the majority of my crypto holdings are XRP.

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Is the crypto market being manipulated?

Many reputable analysts believe it’s true. While not applying a label of ‘legal’ or ‘illegal’ onto the behavior of the crypto market since January, it is evident to many that a repetitive cycle has become apparent, specifically relating to Bitcoin supply and demand. If you’re looking for a silver lining in the crypto market, it’s this: Even with the repetitive rise and fall of Bitcoin prices in the last five months, demand for crypto continues to show its strength, causing day-over-day growth between these massive Bitcoin sales.

I believe this is proof positive of growing demand for cyrptocurrency worldwide as more and more people educate themselves on this new financial product.

It’s interesting to note that for every digital asset, there are usually small groups of large holders. Despite what Bitcoin maximalists would like you to believe, there are a small group of ‘early’ Bitcoin owners that collectively control millions of Bitcoins. This is demonstrated by a chart that shows just how centralized Bitcoin ownership really is: 1

Bitcoin Ownership Centralization

This centralization of ownership means that the market for Bitcoins could at any time be subject to wild fluctuations due to dumping or even intentional price manipulation by some who may be playing in a completely separate market – futures trading. Some analysts have endeavored to investigate this manipulation, and even some regulatory agencies are expressing an interest in uncovering more about the current crypto market behavior.

Given that information, what’s the wisest course for those currerntly searching for the best cryptocurrency investment?

It depends on the goals of the individual. If they’re a long-term investor looking to round out their portfolio with a high-risk, and potentially high-return investment, there are very few choices that will give them:

• A large team
• Current traction with target customers
• Top blockchain technology
• Support
• Business Experts
• Technical Experts
• Regulatory Compliance
• Large, real use cases for the digital asset
• A dependable network
• A highly-secure network

How many cryptocurrencies fit this mold? I’ve been studying cryptocurrencies for a while now – since 2013 – and I can tell you that there are very few choices currently on the market that contain all of these characteristics. In fact, I know of only one that has all of them: XRP

General Crypto News

At the BFI Summit in New York on June 4rth, US CFTC Commissioner Rostin Behnam gave a speech in which he addressed the topic of blockchain, virtual currencies, regulation, and enforcement, with contemporary examples of various exchanges. 2

Let me preface this by saying that in previous speeches that I’ve heard on the topic of blockchain technology and its accompanying innovations, I’ve had a mixed reaction. In some cases, you can detect a bit of populism in the speeches, mixed with authentic viewpoints about some of the aspects of cryptocurrency and blockchain technology.

Not this time.

Rostin Behnam provided a sparkling example of a public official that 'gets it.' From the comments he made in the speech, I can appreciate that he truly understands where blockchain technology could lead. It’s worth a read if you haven’t already seen the speech in its entirety. Here are a few salient points:

“...these currencies will be outside traditional monetary intermediaries, like government, banks, investors, ministries, or international organizations. We are witnessing a technological revolution. Perhaps we are witnessing a modern miracle.”

“Technology could simply bypass corruption. Here is our chance to put money directly into the hands of those who need it, without bribery, rake-offs, graft, and shakedowns.”

“The so-called “unbanked” could now be on the virtual grid. And, those without computers, some four billion people, could gain an important connection through cell phones. And, the discussion has extended to micro-lending, micro-transactions, greater transparency, and greater financial inclusion.”

When I read the last quote, the one individual that immediately sprang to my mind was Chris Larsen, one of the founders of Ripple. Before leading Ripple, he founded a company that specialized in peer-to-peer loans called ‘Prosper.’ Many influential thinkers and leaders like Rostin Behnam are now seeing the same possibilities that visionaries like Chris Larsen saw years previous from his vantage point in Silicon Valley; the possibility that the entire world is about to change due to blockchain technology.

Ripple News

The Bank of International Settlements, or BIS, is an umbrella organization that is owned and operated by 60 central banks from around the world.3 4 This organization recently released a paper detailing their findings regarding cryptocurrency, distributed ledger technology, and how these topics may impact monetary policy for central banks. It even went a step further and surmised about a few possible scenarios where blockchain technology could merge with central bank policy.

One graphic that immediately caught my attention was their “money flower” diagram, which they in turn borrowed from a separate BIS document:

Money Flower

It’s an intriguing graphic, because it shows an intersection that has all four characteristics involved:
• Central bank-issued
• Peer-to-peer
• Digital
• Widely Accessible

The main failure that I see is their underestimation of the distrust that many current cryptocurrency advocates and converts have with any currency issued by a central bank. From my standpoint, the diagram is short-sighted in that respect: Just because a central bank can put a national currency on a blockchain doesn’t mean that it will take over crypto; in fact, there are many other variables involved that are important:

• Is coercion of citizens involved, or are they able to choose their own currency?
• Are central bank currencies going to be inflationary?  
• Will central bank-issued currencies steadily lose value?  
• Will central bank-issued currencies be used as a tool for monetary policy?

Why do I ask these questions? Because the BIS document telegraphs its perspective on cryptocurrency used as an investment vehicle:

“To fulfil these functions, money needs to have the same value in different places and to keep a stable value over time: assessing whether to sell a certain good or service is much easier if one is certain that the received currency has a guaranteed value in terms of both current and future purchasing power.”

This is almost the antithesis of the vision for creating a “people’s money.” Citizens want the value of their money to either remain stable … or increase in value. It’s the reason that gold, silver, and other precious metals were used as a means of value transfer throughout history. 5

Declining Value of a Dollar

The reality is that people will choose to exchange their central-bank-issued cryptocurrencies for other cryptocurrencies that are scarce and rising in value.


Promising Points in the BIS Paper

When it came to distributed ledger technology, the Bank of International Settlements was very positive. They judged any network that depends on permissioned voting to be categorized as worthy of consideration. The paper’s authors did not like proof-of-work systems and their inherent security weaknesses and scalability issues: 6

“There are two key challenges for the implementation of wholesale CBDCs. First, the limitations of permissionless DLT also apply to CBDCs, meaning that they need to be modelled on permissioned protocols.”

And just so you know – they consider the architecture of the XRP Ledger to possess characteristics (UNL List) of a permissioned network. 7

Do I think they’ll use the XRP Ledger as a global reserve currency? Not a retail currency, no; but I’m still up in the air about a universal central bank reserve currency. The paper is groundbreaking – this is the first comprehensive analysis I’ve seen at this level of detail. While some of the conclusions and observations are flawed, I believe the paper represents a trend in serious consideration of blockchain technology to solve central bank problems, such as cross-border value transfer.

The Future of Money

David Schwartz, Ripple’s Chief Cryptographer, recently sat down for a panel interview at “The Future of Money” in Voxpro’s Dublin Centre of Excellence on June 11th. @bankxrp (Twitter handle) uploaded the video of the discussion to YouTube:

The topics were many, and David Schwartz fielded a variety of questions; he described some of the concepts around Ripple’s strategy to build open protocols, and he also touched on the new Coil startup headed by Stefan Thomas. One of my favorite question-and-answer moments involving David Schwartz was this:

Question: "David: How addicted are you to (checking) the price charts and the fluctuations and volatility?"

Answer: "You know, I went through a short time when I was kind of addicted, but it... got boring after a while. I think I’m in this for the long term, and I’m not so much in it for the price movement. I’m in it for making payments cheaper and faster."

Ironically to some, this is exactly what is best for XRP stakeholders. On the surface it may seem counter-intuitive, but it’s great to have Ripple championing its products with banks, especially since all of them are able to settle with XRP. Other blockchain companies may be distracted by the short-term price fluctuations of their chosen cryptocurrency, but when it comes to long-term value, Ripple is on the right track.

ABN Amro - Franx

Every once in a while, a new banking partner for Ripple is mentioned, as they continue to make traction into the market previously controlled by a monopoly – SWIFT. With each additional bank to RippleNet, the odds swing more decisively in Ripple’s favor in their battle for cross-border payment supremacy.

The XRP Community tracks these wins as they are discovered, but not all of them are highly publicized by Ripple for various reasons. Perhaps some of them have signed nondisclosure agreements (NDAs) with Ripple. Whatever the reason, the XRP Community is adept at picking up details that leak out into cyberspace about these new Ripple partners.

One such example of that is ABN Amro, a major Dutch bank that was discovered to be ‘testing Ripple’ through its subsiciary, Franx. Evert van der Hoorn, Project Manager of Blockchain at Franx, was very positive on the potential of RippleNet: 8

“The idea behind Ripplenet is very strong… International entrepreneurs benefit from the certainty that bills have been paid at the moment the products are shipped. Ripplenet can significantly speed up international payments. By making use of Ripplenet, Franx also becomes less dependent on SWIFT.”

While most likely using xCurrent, it’s additional evidence of a growing network for Ripple and it also expands the ‘potential network’ for XRP in the future. Even if they didn’t officially announce the win, congratulations to Ripple on working with yet another major international bank.

Dutch Central Bank Mention

In a video posted by the Blockchain Innovation Conference, a representative from the Dutch central bank discusses current dissatisfaction with the time it takes SWIFT to process an international settlement and mentions the current battle for cross-border payments that is heating up between Ripple and SWIFT. The specific mention happens after the four-minute mark:

As 2018 moves forward, expect to see more of these types of references as Ripple and XRP both start to become household names.

The Donation Heard ‘Round the World

At the Social Innovation Summit earlier this month, the founder of, the charitable foundation that organizes ‘classroom requests’ for teachers across the United States, gave a presentation where he told the story of Ripple’s massive $29 million dollar donation.

I confess that didn’t know the full story; I’d only seen the headlines and watched a short video that Charles Best produced with himself and Monica Long, Ripple’s Senior Vice President of Marketing.

The hairs on the back of my arms stood up as he described amazing details that I didn’t previously know about; some of it was information on prior donations, to contrast just how massive in scale Ripple’s commitment was. He told a story that Stephen Colbert was one of the first celebrities to make a high-profile donation to in the early days, fulfilling all of the classroom requests from South Carolina.

He talked about other celebrity contributors such as Elon Musk. In addition to the incredible back story that he shared, Charles Best also talked about some surprising statistics related to Ripple’s donation:

  • 1 in 6 US Schools benefitted from Ripple’s donation
  • 600 of the 18,000 schools helped by the donation had never before seen a funded request
  • 8,000 out of the 28,000 teachers helped had never before seen a funded request
  • 71,000 books were purchased by the donations
  • 8,000 instances of basic needs requests, such as food & clothing
  • 3,000 gardening items were procured by the donations
  • 2,400 musical items were purchased as a result of the donations

Of all the statistics that he shared, the most telling one was where he shared a private concern about Ripple’s large donation; he was worried that individual donors might not be as interested in donating when they see such a large contribution. In fact, however, he indicated the complete opposite happened. Before Ripple’s donation,'s annualized growth rate in donations was 8%. After Ripple’s donation and its associated publicity, this has now jumped to 172% annualized growth citizen donors.

Most of us follow crypto because we’re investing in the technology by buying cryptocurrency, but isn’t it great when your investment is associated – even peripherally – with such a progressive and monumental example of philanthropy?

XRP News

A recent blog by @WietseWind is worth reading if you haven’t seen it; while all of the blogs on the community site are worthy of your time, this one deserves mentioning as a ‘blog apart’ due to its description of a highly technical, yet important-to-understand topic in cryptocurrency. Because the crypto market is still quite young, many investors handle their own crypto holdings, along with their security.

Many crypto investors, while understanding the importance of keeping their information secret, may not understand the other cryptographic concepts involved in how crypto wallets operate. WietseWind’s blog lays it out in three steps. Your wallet:

  1. Hashes your transaction. Hashing maps input data to a fixed size string (hash). The same input data will always result in the same hash, but if only one character changes, the hash will completely change as well. Hashing is one way: you can't convert an hash back into the input data.
  2. Signs the hashed transaction with your private key.
  3. Your unique transaction signature and your public key are then added to your transaction, and sent to the network.

The previous quote is just a sample. For me, there was one diagram that was truly a ‘light-bulb’ diagram that distills the complexities of public-private key signing down into easily-understandable concepts. I don’t want to give too much away, however. It’s a fast read; even though the topic is technical, @WietseWind is able to communicate it with ease. Here is the link to his blog:

Keys are key: secret keys & signing transactions

Official New XRP Symbol

After two rounds of voting, @xrpsymbol confirmed the final vote tally, and it was a staggering 62% in favor of the submission by Ripple. Of course, the hometown favorite had a decisive advantage, but the other submissions were very compelling as well, and garnered a significant amount of the community support.

Here is the new symbol that will represent XRP online and in Unicode:

Bitcoin Ownership Centralization

Thanks to @xrpsymbol for coordinating this large-scale effort that included the contributions of multiple XRP Community members. Kudos to all involved, and congratulations to Ripple on submitting the winning design. The next step for the symbol is for the XRP Community to help exchanges and other crypto ecosystem stakeholders adopt the symbol when they discuss XRP.

Even with a new symbol and a highly-publicized vote, there are still notable crypto icons that still refer to XRP as 'Ripple'. We need to gently remind them that XRP and Ripple are two separate things.

XRP is the Answer

Is the crypto market far below where it’s market cap should be? Yes. Is there anything that we can do about it individually? Yes.

We can support the cyrptocurrency choices that promote blockchain technology in the most responsible manner, in the most positive way. We can vote with our wallets.

While early Bitcoin converts would like new crypto owners to only focus on Bitcoin, their behavior is centered on protecting their investment, not in promoting cryptocurrency as a whole. If we want the world to use cryptocurrency as a means of exchange, we should promote one that can actually scale to global levels of usage, and is the most flexible when it comes to cross-border value transfer and settlement in any currency: XRP.

If you’re reading this, you might already know how massive the use case is for XRP, as well as how flexible it is when transforming one currency into another using its bridging capabilities. This is why remittance companies and banks are considering it as the first, best option in actually using blockchain technology in a production setting. They are choosing the option that makes the most sense from a business and risk standpoint, and I can’t say I blame them; it’s very much like Brad Garlinghouse indicated: using digital assets is definitely a ‘crawl-walk-run’ situation.

It’s fairly obvious which company – and which digital asset – that they are planning on actually using in the real world of global finance.XRP_new1


  7. (p. 111)

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I blog about Ripple & XRP. FULL DISCLOSURE: All views are my own. I do not work for Ripple; I am not a professional financial analyst, and the majority of my crypto holdings are XRP.

Read More