A Ripple Story

by Cryptopian

I worked at an unnamed crypto company in San Francisco and got a close-up view of this controversial industry.

On second thought, let's name it.  It's Ripple, the "enterprise" crypto blockchain.

Ripple was a funny place to work.  Most startups have a consistent cast of characters, so that one startup's staff is almost interchangeable with another's.  Not Ripple.

Back in the day, Ripple was hiring oddballs, in bulk.  The theory went something like this.  Crypto is a new industry, created by the collision of very different elements: cypherpunks and banking, independent developers and enterprise software, etc.  So our people should reflect this.

For our purposes here, let's focus on developers.  There were people who were super into Bitcoin, who often combined a consultant's mentality - "whatever gets the job done" - with a libertarian ethos (Note: that's different today than what it was).  There were traditional software developers, with pedigrees from elite institutions and blue chip work histories.  There were people who wanted to break into the industry - and found their way in.  And finally, there were journeymen, who'd been in the industry shoveling away for years, hopping from one job to another.

There were also programmers at different levels of mission-critical.  There were the protocol developers, who were C++ (the language) rock stars, and frankly, bored.  They were all extremely skilled, so skilled in fact that they ran out of things to do: the blockchain worked, they had optimized it, and more ambitious goals were walled off by management.  You know those algorithms that Google tests you on?  They had invented some of those.  Then there were the front-end developers, who became more standardized over time, but were a real grab bag back then (and didn't have that depth of knowledge).

Over time, the traditional developers edged everyone else out, and the other groups either found a space on the margins, or quit, or were pushed out.  One of the groups that experienced the most tension was the Bitcoin people, who seemed to be itching at this question almost daily: If you really believe in a decentralized crypto future, what are you doing at a fully establishment, centralized one?  Those were some of the first people to go.

In the beginning, that wasn't a problem, because Ripple, theoretically, was everything and anything you wanted it to be.  It really depends on how far back you go, because its history changed a lot, and is a trip in itself.

It started off - the software equivalent of the Cambrian Age, so far back even the "early people" barely remembered it - as Opencoin.  This bumped along for a little while, maybe of interest to people looking to get in early on something that hadn't yet taken off and become "too expensive" like Bitcoin, then in the tens of dollars (ha).

Ripple, in the words of recruiters - which is how most hires found out about it - was crypto which was going to be the future (this was long before it saturated the media-scape, before Ethereum even existed).  It was fintech.  It was going to help the unbanked - from a comms perspective, the hook into the disruption and revolution perspective that was so popular at the time.

As time went on, Ripple evolved, as a company, from "kind of a crypto play ( \_(ツ)_/¯ )" to "enterprise blockchain."

You might say, "Wait - I thought they were a cryptocurrency?"  And not only would you be right, you would have hit on a fundamental tension that was never really resolved.  Ripple was a cryptocurrency company, but it was also supposed to be selling banking software to enterprise companies, which sometimes led to the funny sight of Ripple talking about its own product in the third-person, as though it was an infrastructure provider when its own bag was the "infrastructure."

Ripple did have market fit, in a way.  But it wasn't a market Ripple really wanted or truly loved.

Ripple, for whatever reason, had caught on in a big way in Asia.  What happened was that brokers would buy up large amounts of XRP, then resell it to investors.  They promised the investors they sold to that, even after a huge markup, the could become rich.  As it happens, they were right: Ripple's price was so much lower back then that this strategy was ultimately vindicated.  If you crunch the numbers, then yes, you could have bought XRP from these brokers at five times cost, and still made two to ten times (or more) on your investment.

A famous zinger about this.

At the time though, that seemed almost unimaginable; we would laugh about Ripple passing one dollar (it eventually, briefly, passed $2.50).  The wholesale sellers were a third-party we never talked about that much.  Sometimes one of them would sweep in and do a tour (including the founder of a very famous project, now).  We also knew the users they sold to got hacked at a horrendous rate, though to be fair that wasn't due to security flaws in the protocol.

If this sounds like indifference, it wasn't personal.  The core problem was: their speculative cottage industry could never float Ripple at a valuation the venture capitalists could accept, so the search was on to find something that could.  The idea that got the most mileage then was that Ripple would replace SWIFT, the world's international banking rails, which... yeah.

So because Ripple didn't have a real business, and didn't have a product market fit (that it wanted or could love), it was totally dependent on personal power and politics, on a knife edge of "value that could be delivered" as opposed to "value being delivered now" (because there was nothing concrete that any desirable customers wanted from it).

Ripple's mission then was about finding something that would combine fintech and cryptocurrency into something even better; the cryptocurrency was the Trojan Horse that was supposed to get Bank of America to buy XRP like bonds.  But why would they, or their peers, do this?  They didn't need us; in fact they thought we should be paying them for the validation their logos would give our brand.

So Ripple never found any real enterprise banking customers, and the only paying customers were the speculative XRP paying kind, who never really had a full place in the overall vision.

There was a small community of people at the company who did care about cryptocurrency, who never really fit in comfortably.  But of course, since Ripple recruited a lot of people with the cryptocurrency promise, it had to have some kind of story for them.  You could get a sense of this in the very strange internal XRP buying process, which you had to ask about, which wasn't volunteered, and which wasn't especially popular among employees.

Of course, that was par for the course of the time; we'd heard stories about employees at one crypto company who'd accepted payment in Bitcoin when it was in the mid hundreds, then got whiplash when Bitcoin sank to the 50s, so much so that the policy was discontinued.  (At the time I'm writing this, Bitcoin is about 30k.)

So Ripple muddled along, as the industry evolved and spread its influence into the culture at large.  And then Ethereum came on the scene.

Ethereum was vaguely talked about in Slack, which was a newfangled thing at the time.  I remember meaning to look it up, forgetting about it (that's how infrequently it was discussed), and then remembering "Oh yeah - I meant to buy that" when I saw a price quote for it on an early exchange, which has probably disappeared by now.  It had reached $10, at which point I thought: I missed that boat - I'll catch the next one.

But Ethereum went on to become a legend.  XRP is still hanging on in the top ten of coins.  Meanwhile, the cryptocurrency industry keeps evolving.  You never know where tech is headed, or where it will end up; cryptocurrency was the most niche of niche things back then, and now it's unavoidable.  Computers themselves have gone from toy to center of the economy in my lifetime.  What will happen after that?  Technologists will still be telling their stories a hundred years from now.  This one was mine.

I hope you learned something from it - and thank you for your time.