Ripple CTO David Schwartz Defends XRP in Heated Online Debate After Investor Calls It "Vaporware Ponzi"

Discussion stemmed from concerns over the inclusion of XRP in the U.S potential strategic reserves.

A heated online debate unfolded between Ripple CTO David Schwartz and an investor, Jonnie King, after the latter called XRP a “vaporware ponzi” in an opinion piece. The discussion arose from concerns over the inclusion of XRP in the U.S potential strategic reserves.

The debate, which took place on X (formerly Twitter), stemmed from a recent article in TheStreet discussing the possibility of U.S. strategic reserves holding cryptocurrencies. In his article, King expressed skepticism over XRP’s suitability for such an inclusion.

King argued that XRP was still under centralized control, in contrast to Bitcoin (BTC), which was designed to be decentralized from the outset. He asserted that Ripple’s influence over XRP’s supply made it unfit for the U.S. strategic reserve.

“They have 50% of the supply locked in an escrow system and release large amounts of tokens monthly to be sold, allowing them to manipulate the price and make revenue,” King said.

He also alleged that Ripple could alter the release schedule of escrowed tokens at any time, giving it undue influence over market dynamics.

Moreover, King pointed to Ripple’s political involvement, noting that Ripple’s executive Chairman, Chris Larsen, donated to Kamala Harris’s campaign. Following Donald Trump’s victory, the company itself contributed to Trump’s inauguration.

Schwartz challenged King to discuss XRP’s actual technology instead of its market mechanics or corporate governance. He asked King to highlight any aspect of XRPL that he found interesting, steering the conversation away from the popular FUD narrative about XRP.

“I’d rather discuss any aspect of the XRP Ledger’s technology that interests you,” Schwartz said.

However, King dismissed the request, arguing that XRP’s technology was irrelevant if Ripple maintained control over the asset. He went on to repeat his statements about pre-mined tokens, missing ledger entries, and a lack of smart contract capabilities, calling XRPL “a highly centralized ledger with missing entries.”

Schwartz countered by questioning whether King understood XRPL’s consensus model, decentralized exchange (DEX), and how it prevents network reorganizations. He also pointed out contradictions in King’s arguments, noting that XRP was labeled “vaporware” and “outdated tech from 2012” in the same discussion.

“It’s interesting that you call the world’s third-largest blockchain technology ‘vaporware’ and claim it’s ‘outdated tech from 2012’ in the same comment,” Schwartz said.

Centralization vs. Decentralization

King went on to insist that XRP’s design made it inferior to Bitcoin. He claimed that its consensus mechanism was based on centralized trust and could be compromised if bad actors colluded within the Unique Node List (UNL).

“Anyone can become a validator in Bitcoin’s PoW system, but in XRP’s system, only the 20 nodes decide who can participate in validation,” King said.

He contrasted this with Bitcoin’s proof-of-work model, which allows anyone to become a validator. Schwartz pushed back, emphasizing that XRPL’s features, such as its DEX and non-native asset support, provided functionality that other blockchains lacked.

However, King dismissed the XRPL DEX as “trust-based” and lacking programmability.

No matter how much Schwartz tried to shift the focus to XRPL’s tech, King held firm that governance and control problems were more important than any tech XRP might offer.

The debate highlights the gap between XRP supporters and critics, including Bitcoin enthusiasts. While XRP fans believe the token deserves inclusion in the U.S. strategic reserve, Bitcoin purists (maxis) believe only BTC qualifies for such an initiative.