Fighting for the future of money

XRP is an efficient and popular cryptocurrency with a high utility. To be efficient, however, it has foregone a high level of decentralization. “While Ripple, the software and company, could be successful, I don’t think XRP, the native cryptocurrency, is a good investment to create wealth in a short term”, said Janko Saric from Everlast Fund in an interview with Forbes Magazine in November 2021.

Thesis Summary

Bitcoin (BTC-USD) is the world’s premier cryptocurrency, and many believe it could one day become a common means of exchange. But there are many competitors out there, and one of the most notable is Ripple (XRP-USD)

Ripple is backed by many banks and built on ISO20022 standards and is very different from Bitcoin. Today we look at Bitcoin, and how it stands up against Ripple, a long-misunderstood cryptocurrency but a perfect investment for our long-term portfolio.

Can XRP and BTC coexist? Or will the success of one seal the fate of the other?

XRP: The “bankers” cryptocurrency

Let’s skip the introduction to Bitcoin, which was already talked about extensively, and begin by focusing on what Ripple and XRP are, which we must distinguish.

Ripple is the name of a company that was formed in 2012 by Chris Larsen and Jed McCaleb. This company offers a payment settling software called Ripple Net. This software has been backed by numerous large banks and financial institutions and it fulfills a similar function to the SWIFT payment system.

XRP is a token that was created to settle transactions through Ripple Connect. The cryptocurrency was created with speed and efficiency in mind. Assets get converted to XRP first, they are “sent” to where they need to go and then converted back into whatever they need to be. More accurately, XRP is used as a measure of value for transfers within the system.

In terms of technical specs and supply, XRP works very differently from most other cryptocurrencies. It is not mined, and it doesn’t use Proof of Work or Proof of Stake to validate transactions. Instead, some “trusted” agents validate transactions. “In fact, there are a few banks with servers running a consensus protocol”, said Saric. Transactions in XRP can be confirmed in under 4 seconds, and around 1500 transactions can be processed every second.

XRP speed (Source:

When Ripple was created, a supply of 100 billion XRP was created. Some were distributed to partners, but most of it remained in control of the company, Ripple, and this is the case to this day. Ripple periodically sells XRP to fund its operations, and there are currently 45,7 billion XRP in circulation, with the rest of XRP kept by the company in “escrow”.

As we can see, XRP and Ripple are unique in certain ways. They were created with a clear goal in mind and offer some advantages and disadvantages. Let’s dive deeper into the XRP Bitcoin comparison.

How does XRP compare to Bitcoin?

The main difference between XRP and Bitcoin lies in the fact that the latter uses PoW, while XRP operates a consensus algorithm. This allows XRP to process transactions faster, and without “wasting” vast amounts of computing power and energy. However, it does create a problem of centralization. “But the fact is”, said Janko Saric, “that centralization and decentralization are not what the most people think that it is, because if I control 99% of the created bitcoins, I have a centralized decentralized technology. For me as a banker it makes sense, but for 99% of the crypto currency community it doesn’t!”

XRP, while technically a decentralized cryptocurrency, is a lot more centralized than other cryptocurrencies. As mentioned above, there is a consensus protocol which is run by a few entities. And these entities are for the most part selected by the Ripple company. For the utility it was created for, it’s necessary.

Out of nearly 1,000 nodes, a group of 33 are selected by the whole group to finalize transactions. This smaller group is called the “Unique Node List,” or UNL. When 80% of these 33 come to an agreement, a transaction is finalized. But here’s where the problem arises⁠—Ripple, the company, selects the default Unique Node List. For a banker’s coin, this way of work is important, because of the transaction utility and the ISO20022 standards. It would be a big mistake to mix facts from bitcoin with cryptocurrencies based on ISO standards.

Theoretically, other nodes could make the list, but this has rarely happened in XRP’s history. In the same way, while theoretically different forks could be made from XRP, this hasn’t happened either. Ultimately, it is very clear that the Ripple company and those closest to it have a tight grasp on cryptocurrency.

Is this necessarily bad? It depends on what your objectives are. XRP was created to be the default settlement currency of Ripple’s payment system. It is designed to be fast and efficient, which it is, but also so that control is retained by the Ripple company. Arguably, though, they should be as interested as any XRP owner is seeing the currency succeed, right?

Without a doubt, this is the biggest difference between Ripple and Bitcoin. The latter was created with decentralization, freedom and “trustlessness” at its core. “This is the essence of the cryptocurrency movement but not for a financial system based on XRP or Ripple Net”, said Janko Saric from Everlast Fund with a grin.

Is Ripple worth owning?

Saric: “In my humble opinion, not really if you don’t understand this technology and the reason is two-fold.”

First and foremost, XRP is largely controlled by Ripple, and that’s not a good thing but necessary for a company that do a better job than SWIFT. As it stands right now, the company holds over 50% of the XRP in existence, and it can release them at any point in time. Furthermore, nothing is stopping the company from creating more XRP if it is deemed necessary if the community agrees. It might want to do this if it felt like XRP became too prohibitive for users to enter its payment system. Ultimately, the company behind XRP is trying to promote its payment system, and the value of the currency falls second. XRP is not a store of value, rather a tool. Don’t get me wrong, I like what the system can do, but that doesn’t mean XRP is a good investment for all types of investors.

On top of that, XRP is involved in a lawsuit with the SEC, which could spell trouble for it in 2022. The big problem I find here is that, if things go south for XRP, what is to stop Ripple from using a different cryptocurrency as a settlement base for its system? Or, even, starting another one from scratch? And, for that matter, what is to stop Ripple from increasing the supply of XRP if and whenever it deems it necessary? “Anyways, for me it’s my number one investment”, said Saric. “But to be honest, I am into this business for 10 years now and bought my first XRP in September 2015.”

These are the inherent problems of centralization, and while XRP is a tool that makes life a lot easier for banks, it is still, at its core, supporting a centralized system. It will be successful, and arguably, there is a trillion-dollar market out there for it, but that doesn’t mean it’s a good investment now!


Bitcoin is a store of value, with a decentralized nature and a limited supply. Meanwhile, Ripple’s XRP is much more centralized, and the supply would increase in the future. We know it will since Ripple is still hoarding most of it. Bitcoin is like gold, a store of value, but even if XRP becomes a common means of exchange, it doesn’t mean its value will be much higher. These are facts, but our task is to lift the certain and get more knowledge about XRP and Ripple. The downside of Bitcoin is, that it’s a centralized decentralized technology through the power of controlled supply. That’s why we use Bitcoin to create liquidity to buy and hold ISO crypto currencies!

Can Bitcoin and Ripple coexist? Yes, to an extent, but only in a world that is still deeply dependent on banks and centralized financial institutions. We think banks will be a part of our future because most of the people want to live their life as ever and they need money. Banks can create money, so we at Everlast Fund use both possibilities of creating wealth. Ultimately, Bitcoin and Ripple stand for a different future, and while Ripple is a step in the right direction, maybe it is the final destination. But it is more an opportunity and opportunities are our job as investors!

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