One ecosystem and token I haven't discussed very much is XRP. The XRP token hasn't had a lot going on the last several years because of the ongoing lawsuit with the SEC. That lawsuit is (hopefully) going to be resolved soon. What will that mean for XRP? Does it have a future? And should you invest in ripple? Join us and find out what's going on with XRP.

I can be reached by email at mcintosh@genwealthcrypto.com and on twitter at @McIntoshFinTech. Looking forward to hearing from you!

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Hey everyone!

Hey everyone, no one on this podcast is financial advisor.

All information presented on this podcast is for informational purposes only.

Now that we have the legal stuff out of the way, let's jump on in.

Welcome to the generational wealth cryptocurrency podcast.

I'm your host McIntosh.

Today we're going to be talking about XRP.

If you've been listening to the podcast since we started last year, you know, I haven't

talked about XRP very much.

I've probably mentioned it here and there, but frankly, I haven't really spent a whole

lot of time on it.

And there's a couple of reasons for that until just a week or two ago, I didn't have any

XRP, hadn't had any for quite a while, several years.

And I just don't talk about things that I don't own.

A lot of times that's not always true, but certainly part of it.

Another reason is that XRP has been involved in a lawsuit, well, Ripple, Ripple Labs, the

company that is behind XRP has been involved in a lawsuit with the SEC for quite a period

of time.

That lawsuit began in 2020, if I'm not mistaken, and yes, that is correct.

And the SEC charged the company saying that they illegally raised $1.38 billion in unregistered

security offerings.

Of course, that case is still in court, being decided.

People keep hoping, it's been going on for quite some time.

People keep hoping that it will be resolved.

In the meantime, it obviously has created a fair amount of difficulty for XRP in terms

of the token's price and use.

In fact, a number of US-based exchanges, such as Coinbase, have actually delisted XRP.

You cannot go on their website and buy it.

However, all that being said, I thought it would be helpful to go back and take a look

at XRP, take a look at its history, briefly go over what its goals are, how it differs

in some fundamental ways from Ethereum, Bitcoin, some of these other blockchains, and where

are we going from here, at least where I think we're going from here.

Not really sure, but we'll see.

XRP, which is the asset or token of the XRP ledger, was a blockchain that was actually

originally developed in 2011 by three gentlemen named Arthur Brito, Jed McCaleb, and David

Schwartz.

It was launched in 2012, officially, and at that time they formed a company that was actually

called OpenCoin, led by a guy named Chris Larson, who joined as CEO.

They then changed their name the next year to Ripple Labs, and then shortened that up

to Ripple in 2015.

That's kind of the company background.

XRP is certainly distinct from Ripple.

Ripple is basically a fintech company, a financial technology company that's building what they

call global payment systems.

One of the things that you'll hear about XRP is they are, well, Ripple is helping banks

develop ways of sending currencies, essentially, back and forth.

You might have somebody, a bank in the United States that needs to send money to a bank

in the Philippines.

The United States, of course, uses U.S. dollars.

The Philippines uses some form of a peso, and that creates challenges while Ripple can

be used to resolve that issue.

Extremely fast.

It normally only takes a few seconds to settle a transaction on the Ripple blockchain, and

I have used it to move things around a bit, and it is as advertised.

It is extremely fast to settle a transfer.

It's also very cheap in terms of transaction fees.

It's like a hundredth of a Ripple, which right now would be about 75 cents, whatever, a hundredth

of a point, less than a cent, right?

Not very much at all.

That's what the goals are of the company and of the product.

The price has been all over the map in 2017 during the buildup of the last bull run.

It ended up around $3.

I had actually bought some when it was quite cheap, and I don't even remember if I sold

or didn't sell or whatever, but after the bull run, during the next crash, so to speak,

it went very, very low.

I had a stat here for that.

Prior to 2017, it was under a cent.

It went up to, like I said, actually $3.40 was the height, January 8th.

It was at 340, but within a few months after that, it had fallen down to 10 cents.

It remained under that until 2021 in April, so last year, less than a year ago, and it

went up to almost $2, and then it went back down below a dollar where it stayed.

Right now, it's at like $0.75, $0.79 range.

I think a lot of what's going on with XRP, frankly, hinges around this lawsuit.

This lawsuit, I can't tell you, frankly, one way or the other, if this lawsuit has a demerits.

I don't know.

I'm not a legal expert.

I don't play one on TV.

From what I understand, I feel like the SEC probably doesn't really have a case, and they're

just kind of dragging this out.

If they do have a case, if they end up winning, I think it could be very bad for crypto overall.

It would certainly be something we would have to monitor and watch.

If they don't win, I think you will see the price of XRP shoot up.

This is not financial advice.

I'm not telling you to invest in XRP.

I did tell you a couple of weeks ago, I bought a small amount.

Well, I bought some.

I bought a small amount, not very much.

I probably really won't add to that unless we see some major price action on XRP.

I've been burned by XRP before.

Fool me once.

Shame on me, fool me twice, shame on you.

But that being said, I think there's a lot of pent up demand for XRP that's really being

held back.

So we'll see how that works out.

I've heard everything from it'll be this January to April to even August and September.

I don't know how much longer they can drag this out.

I mean, it has been going on for quite a while.

A few other things I'd like to mention about XRP.

This will probably be a fairly short episode this week.

But a few other things, XRP doesn't use the same basic methodologies as Bitcoin and Ethereum

and a lot of the other tokens.

This is maybe something you need to keep in mind.

You don't mind XRP.

Some people say this is the basis of the SEC lawsuit.

I don't really believe that, but that's some of the allegations, I guess you could say.

So they pre-mined what they call pre-mined.

So they created at the time of XRP's Ledger's launch, 100 billion XRP tokens.

So this was in 2012.

The founders provided Ripple, the company, 80 billion tokens to fund operation and development.

And then the rest, so 20 billion was divided among the founders.

So they kept 20 billion.

They basically took the rest and put it into an escrow account, if you want to call it

that, to fund operations, development, and so on.

So unlike Bitcoin and other mined currencies like Ethereum, new coins enter the market

in the form of a block reward, that is not the case with XRP.

XRP enters the market, inner circulation, so to speak, whenever Ripple decides to sell

coins.

So they just sell coins out of that 80 billion token stash, and that's how new coins enter

the market.

In 2017, they actually put 55 billion of that 80 billion, so the majority of that, into

an actual escrow account, which has rules saying that they can only sell a maximum of

a billion tokens a month on the secondary market.

And they simply did that to improve, well, like I said, I think they did that because

of a lot of pushback, but it does make things a little more transparent and improve the

predictability of XRP.

I mean, before, you never knew.

They could just dump a bunch on the market because they needed money.

At the end of each month, the unsold tokens out of that billion are returned to escrow

and then they can be redistributed later.

And in fact, I don't know when this article was written, but the 32 months prior, 32 billion

tokens had been released and 26.7 billion had been returned.

So the majority of them actually came back.

I don't know what that means in terms of the price, honestly, but it is the way that they

do business.

So as of a couple of months ago, October 2021, that account held just over 47 billion tokens.

So they still have a lot of room or a lot of tokens to distribute.

So it is a different mechanism and it's a different thought process.

It remains to be seen long-term what that really means.

We know right now, one thing we do know, there's a hundred billion tokens created.

There won't be more, but to an extent, we don't know when those will be released.

So that's kind of it, until this lawsuit is settled, we don't know what's going to happen.

We don't know if the price is going to go up, we don't know if it's going to go down.

They may have a market price of $10 a token, I don't know.

It depends on how much usage they can get out of XRP and until they get this lawsuit

settled, they're not going to be able to make big deals and get that usage out there.

That's kind of the state of things.

I did want to take a few minutes, we'll get to the news and there was quite a bit of news

this week, but we had an email from a listener.

I wanted to take a minute to cover and actually rather than replying to him, I wanted to reply

to everyone or let everyone know about this because I think this is good information.

So Mitch had emailed me and he was wanting to know about kind of an update on Lightning

Network and said, you know, there seems to be more and more adoption of the Lightning

Network.

Mitch, that's absolutely true.

There is more adoption and in fact, we'll have a news item this week showing how that

will be expanding even more.

He said, I understand you run a node or channel.

That actually is not true currently.

I want to, unfortunately, right now my Bitcoin's kind of committed to other things and I can't

pull enough out to build that channel.

I've done some tests.

I've actually done some test setups, but I do not have a production node.

For me personally, this is a way to give back to the Bitcoin community and I will be doing

it in the future.

At least that's certainly my plan.

I see a lot of growth and adoption coming from Lightning and we'll talk about that more

in the news.

And he asked, is there a way to invest in Lightning Network?

Yes, run a node.

That's actually the only way that you can invest.

Are there incentives to run a node?

There are incentives.

They're fairly small.

You're not probably going to get rich unless Bitcoin really does go up significantly because

the Lightning Network is designed to be a low cost, high throughput system.

Now, if you run a lot of traffic through your nodes, yes, you can make decent money.

And it's money in Bitcoin that you could then keep and hodl, hold on to.

And hopefully as the price goes up, your investment, so to speak, would go up.

So that would certainly be an incentive in my book.

Now we'll talk about some more news about Lightning Network.

In fact, kind of covered that, we'll just jump on into the news.

Let's go ahead and talk about that.

Two things about Lightning.

First of all, Strike, the Strike app, is now working in Argentina.

That was announced during the last week.

I believe actually Jack Mollers, who's the CEO of Strike, tweeted earlier today that

the Strike app is now the number five app in Argentina, and that's after less than a

week.

Argentina, and I've not really talked about this, but if you didn't know, Argentina is

a country that has certainly had issues with its currency, with inflation, with hyperinflation

really.

I've read some stories even as recently as the last 20 years where people, there's been

significant hyperinflation.

In fact, one of the developers, one of the people who's pretty heavily involved in Bitcoin

was kind of giving his story.

He got involved in Bitcoin because of this hyperinflation that was going on in the country,

and he started putting his money into Bitcoin because I think it's a peso, but the Argentine

currency would become devalued.

He actually got his company to start paying him in Bitcoin, and he started keeping his

savings in Bitcoin and so on and so forth.

That was certainly since 2009.

I think it was actually even after that, 2015 or something.

I don't know exactly, but historically Argentina has struggled with this.

It's good to see that this is rolling out.

This doesn't mean that Bitcoin is a legal tender in Argentina.

It doesn't even mean that the government is recognizing it.

It's just they are allowing the strike app to be used.

They've made agreements with banks down there.

I don't know exactly what that means, but what it does mean is that the average Argentinian

can go get the app on their phone and receive Bitcoin or receive whatever the local currency

is from people outside, just like they do in El Salvador, and they can start saving

in Bitcoin.

They can save on that strike app just as well.

When I did my DCA for January, my dollar cost average, I was going to buy some Bitcoin,

and I was going to use the strike app to do it.

I actually went through that process.

I'd had the strike app for a couple of months, but I'd not actually set it up.

I connected it up to my account.

It's really easy to do that DCA.

Every hour, if you really want, you can do it by the day or whatever.

Unfortunately, I had a little glitch because of my bank account.

I don't have that sorted out yet, so I'm not actually doing that.

If you don't have the issue which I had, which would be a very uncommon issue, it would be

really easy to use.

If you're looking for a way to DCA Bitcoin, or even if you're looking for a way to send

other people Bitcoin or whatever, Cash App is actually integrating the Lightning Network.

Cash App, you can send and receive money to people, and they're looking at Bitcoin or

Lightning as a way to do that.

You can already buy Bitcoin on Cash App, but this will make it a better experience, I believe.

That was another Lightning thing going on.

So again, going back to Mitch's question about Lightning, I see Lightning is going to be

a player.

They may not be the only player in this field of whatever that field is, these instantaneous

or virtually instantaneous low cost payments, whatever that is, but I do see them as being

a big player, coming out of the gate first, so to speak, gives them a big advantage.

All right, next news item, PayPal.

Everybody knows who PayPal is, big company.

It came out this week that PayPal is exploring ways of creating its own stablecoin, meaning

a coin that doesn't change in price, like a USDT.

It's pegged to the US dollar, so it's basically a dollar.

And I don't know what PayPal's plan for that is.

That's a very interesting thought.

PayPal, of course, they're heavily involved in payments and that kind of thing.

So this would be an obvious crypto, would be an obvious area of growth for them.

You can already buy Bitcoin with PayPal, I think, if I'm not mistaken, but they are continuing

to explore that.

And the final thing is actually about a city.

And that city in 2008, which I think it's gone up since then, but it was the 30th largest

country, municipality, not country, it was the 30th largest municipality or city in the

world, it's Rio de Janeiro in Brazil.

They made a big announcement this week.

So they are going to invest 1% of their treasury, basically their money that they have set aside

for public service and this kind of thing.

They're going to invest that in crypto.

Now that's not the only thing.

Not only are they going to do that, that announcement was made in a joint lecture with the mayor

of Miami, who of course is, Miami is trying to become a major crypto city, but they are

going to allow people to pay for governmental services, taxes, not services, taxes.

They're going to allow that to be paid with Bitcoin.

And if they do, it looks like they're probably getting, and this is maybe a little unclear,

but there is a discount, 10% I've heard, but I'm not super clear on that.

So some kind of discount if they're paying Bitcoin.

So that is a huge thing.

We're talking about a very large city, whether, you know, Rio, where they had the Olympic

Games, the last summer games, if I'm not mistaken.

Just a few years ago, very big, very, you know, growing city.

And there they are.

We're going to invest in crypto.

We're going to allow our citizens to pay their taxes, their bills, whatever, in crypto.

We're going to give them a discount for that.

And so there you go.

That's not the country that the country, of course, would be Brazil.

But I would not be surprised if later this year that Brazil itself doesn't make some

similar moves.

They'll see how things go.

Rio first, I think.

But I think we're going to see a lot of growth in South and Central America.

I think they're going to end up leading the way on this.

And I've made that prediction a while ago, but now we're starting to see that fall in

place.

So that's really good news.

And I guess we can talk about the price for a second.

In terms of Bitcoin's price, yeah, it's the same as it's been for the last few months.

It goes up a little bit, goes down.

It's kind of in this sideways, you know, pattern.

Very boring.

It can be very dangerous for those of us who trade.

If you do trade, please be very careful and stay safe.

Your best bet is to DCA, like we talk about.

Don't worry about what the price is.

Just keep plugging away and understand that this type of news, Rio de Janeiro, Argentina,

there's been lots of good news come out of El Salvador.

The adoption there is going very well.

All of this news is only going to drive the price up.

I will give my opinion, which may or may not be correct.

I feel like I believe, actually, I don't feel like, I believe that the market's being manipulated.

And I don't truly understand why, but I believe that because if you look at the fundamental

market, things like the amount of Bitcoin that people are putting into cold storage,

the overall growth and adoption, the, you know, there's all kinds of metrics that you

can look at that would say that we are in a bullish market or a bull market.

And yet, as you've seen, we've had these periods, at least, at least now three, well, yeah,

three times within the last year where we've been held for these sideways kind of patterns

for extended periods of time, shaking people out, sending a spike down, you know.

And some of it is because people are over-leveraged.

That's something that we didn't have in 2017 with the ability to, for people to do crazy

leverage, right?

You can leverage yourself 100x, which is just ridiculous.

And so some of this is actually because of that, but I don't think all of it is.

In fact, I don't even think the majority of it is.

I do think that there's manipulation games going on by people who control a lot of Bitcoin

and they're trying to shake it out of people, so to speak.

So hold on to that Bitcoin, hold on to your crypto.

We do not know what the market's going to do, but until we know that we're going down

or we know that we're going up, just don't be making any crazy moves, okay?

So stay safe out there, so to speak.

So that's it.

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But thanks for being here.

I hope this has been helpful.

I would love to hear from you.

I'm on Twitter at McIntosh Fintech, and you can reach me by email at mcintosh at genwealthcrypto.com.

And of course, the generational wealth website is at genwealthcrypto.com.