Ripple’s native cryptocurrency, XRP, is on a bull run.

According to CoinDesk data, the price of XRP is up over 1,000 percent in just the last month alone, eclipsing $3.50 per coin Thursday after spending much of 2017 under $0.30. With a market capitalization above $120 billion, the token has usurped ethereum as the No. 2 cryptocurrency after bitcoin, and social media is rife with speculation about when it might take first place.

But where some might see the kind of meteoric growth that’s often associated with a breakout product, industry insiders have been quick to tap the brakes.

Rather than herald the run-up as a success story, some are using the spotlight to revive long-standing controversies that have dogged the Ripple blockchain network, the startup that created it and its fair-weather approach to marketing the cryptocurrency.

Indeed, founded with the mission to bring bitcoin’s decentralized, cryptographic architecture to financial services, Ripple has had a complex relationship with XRP – at times touting it as a way for banks to transact seamlessly across borders, while at other points describing it as a benign value-add to enterprise versions of the company’s software.

Such hot-and-cold thinking has long been on display in the company’s public remarks on the subject.

As far back as 2012, for instance, the founder and former CEO of Ripple, Chris Larsen, spoke of the service as a bitcoin-like payment system. Only a couple years later, Larsen was de-emphasizing XRP’s role, telling the Financial Times, “The world is not going to adopt a new math-based currency.”

Seemingly aligning with a rise in regulatory concerns over bitcoin and other cryptocurrencies, executives at Ripple even explained to Fortune in 2014 that its cryptocurrency is not meant to be a store of value or a medium of exchange.

And there were times when Ripple leadership hesitated to call XRP a cryptocurrency at all.

Asked directly about its use of terminology in 2016, Larsen pegged the decision to marketing, dismissing the term outright. “It’s not powerful,” he said then. “I think sometimes the word ‘crypto,’ branding-wise, is less institutional than ‘digital asset.'”

Yet, as the term “cryptocurrency” has come back into fashion over the past year, that narrative has changed.

In contrast to his predecessor, Brad Garlinghouse, who replaced Larsen as CEO when he stepped down at the beginning of 2017, has proclaimed the value of cryptocurrency, specifically XRP.

And in interview with CoinDesk Thursday, Asheesh Birla, who’s been the vice president of product at Ripple for five years, said he doesn’t remember anyone at the company downplaying the necessity of digital assets. Rather, he said:

“What we did realize is that there is a pragmatic way of developing use cases that will use digital assets. I think that is a very pragmatic approach of building a payments solution. I think the patience, and the pragmatic nature that we’re working towards is paying off.”

And Birla has a point – three years ago digital assets were thinly traded compared to today, so it was hard to market XRP as a liquidity play.

Yet the company’s shift in tone, coupled with the XRP cryptocurrency’s recent boom, has brought out a sea of critics who want to take Ripple to task for its seemingly opportunistic stance.

However, they’re being met by an equally strong force: a new group of crypto adopters who, all of a sudden, see XRP as an affordable way to get exposure to cryptocurrency and relieve their FOMO.

The XRP faithful

Given the passionate support of its online fanbase, it’s perhaps not a surprise that Ripple’s XRP cryptocurrency has attracted interest, especially as new investors seek to diversify in the cryptocurrency market.

For instance, Ripple evangelist and XRP bull Tiffany Hayden wondered in a tweet whether XRP could jump 740 percent to reach $20 a coin, and while that might seem a stretch, it sounds more plausible when considering that XRP gained 30,000 percent over 2017.

Further, according to a tweet from Chris Burniske, a partner at Placeholder VC, if XRP’s price stayed around where it’s at today and bitcoin’s stayed around $15,000 a coin, by the time each of those network’s cryptocurrency units (100 billion for XRP, 21 million for bitcoin) had been released, the XRP Ledger would have a network value greater than bitcoin’s.

Since bitcoin hit $20,000 this past December, a slew of cryptocurrencies have reached new all-time highs, some even outperforming bitcoin by leaps and bounds. But what sets XRP’s activity apart may be the sheer volume of crypto enthusiasts who, seemingly, are working under cloudy impressions of the industry.

In speaking with retail buyers, CoinDesk has found that, for some, XRP is their very first foray into cryptocurrency. In one conversation, a source, who wished to remain anonymous, reported that a friend had pushed him to buy XRP.

This investor also cited other reasons for taking the plunge:

“Surely, because of the advantage of transferring funds very quickly and efficiently anywhere in the world; also its endorsement by [potentially] Amazon and Amex. It didn’t hurt that it went from 20 cents to $1 rather quickly.”

It’s an interesting answer that sheds light on the state of the crypto industry as it moves into 2018.

Bogged down – at least in the eyes of new investors – by a years-long technical debate, bitcoin seems to have lost its hold on the faster, more efficient payment method use case. In turn, cryptocurrencies that seem more mainstream (such as XRP in its proximity to Ripple) are looking more attractive to rookies.

Yet, the partnerships Ripple has forged recently hide an inconvenient truth – that enterprises using Ripple’s services aren’t necessarily using XRP.

And as such, XRP investors might not understand they’re buying into a cryptocurrency very different from bitcoin and the others that have gained widespread attention over the years.

Without XRP

Case in point: While XRP investors might be charmed by the thought of holding a cryptocurrency that one day a large swath of the banking system may use, the vast majority of Ripple’s banking clients are using the company’s xCurrent product – a glorified messaging platform.

This product provides banks with real-time, bi-directional messaging with which they can track and manage cross-border payments, and is superior, Ripple executives say, to SWIFT’s messaging platform, which only allows for one-way communication.

So for instance, if an account number, name or some other data needed to send a payment gets mistyped when sending a SWIFT message, that message must go through its life cycle before the error can be corrected, with the receiving party sending back an error-and-cancellation message. The sending bank then has to go find where it messed up, and once the errors are corrected, a new transaction must be initiated. (However, SWIFT recently revealed a real-time gross settlement platform and is experimenting with blockchain technology to enhance its processes.)

Ripple’s platform, on the other hand, allows senders and receivers to communicate in real time, so simple errors can be fixed quickly, and transactions aren’t canceled, but instead merely put on a momentary hold of sorts.

Laid out to CoinDesk during the company’s inaugural Swell conference in Toronto in October, Ripple’s main product doesn’t involve its XRP token at all.

Onstage during the event, a number of banks using xCurrent asserted that they would not be using XRP anytime soon, contrary to what XRP investors might be banking on today.

And xCurrent is the platform American Express is using. In mid-November, Amex announced that it had partnered with Ripple to connect Amex customers in the U.S. using U.S. dollars to Santander bank accounts in the U.K. using British pounds.

During the launch, Ripple’s global head of strategic accounts, Marcus Treacher, told CoinDesk that Amex and Santander were connected directly with no need for an intermediary cryptocurrency.

Yet, the price of XRP rallied on that news, hitting a high, for the time, around $0.30 per coin.

And now, with the price of XRP continuing its upward momentum, there seems to be another pump based on misperceptions about the Amex relationship and speculation that Amazon will accept XRP sometime this year – both were mentioned by the anonymous neophyte as reasons he’s investing in XRP.

Secondly, many investors new to the cryptocurrency space might not be aware of where all the XRP actually exist. Unlike bitcoin and many other cryptocurrencies, XRP isn’t created on a particular timeline through mining – or the act of securing decentralized networks.

Instead, the 100 billion XRPs (the cryptocurrency’s coded limit) are already available, with most under the control of Ripple itself. Ripple currently controls about 61 billion XRP, although in May (where the price ranged from 5 cents to 41 cents) the company announced it would move to lock up 55 billion XRP is escrow, to be released at a rate of 1 billion a month for at least four and a half years.

According to Birla, that lock-up started in December, and any XRP not used during the month is put back into the escrow accounts.

In May, Garlinghouse told CoinDesk funds were being spent at a rate of 300 million per month, but Birla declined to disclose any updates to that number.

Yet, Birla did say, with the price increase, the company would be re-evaluating what it needs.

What’s wrong?

First and foremost, XRP’s rise on old news and unconfirmed speculation displays one of the challenges within the crypto market – that there’s no foolproof way to value cryptocurrencies.

And not only that, but the definition of cryptocurrency is a bit murky as well. Because XRP’s use is fixed to the Ripple Network, its protocol doesn’t involve any mining and Ripple itself controls the majority of tokens, many long-time crypto enthusiasts would put XRP in a separate (albeit in some ways similar) bucket from bitcoin and other, more decentralized cryptocurrency projects.

“XRP will go down as the Icarus of cryptocurrency,” tweeted Preston Byrne, an outspoken blockchain pundit, referencing a Greek mythological tale about hubris.

In an interview, Byrne said he finds extremely troubling the trend of private companies issuing their own monies, retaining some for employee compensation and working capital, listing them on exchanges for speculation and then selling their monies on those exchanges to fund operations.

Byrne, the founder of Tomram Consultancy and former general counsel of blockchain startup Monax, told CoinDesk:

“The scale of this activity has become distinctly market-distorting. My greatest fear is that these schemes could, if left unchecked, lead to a systemic crisis.”

And chief among the criticisms leveled at Ripple is that the project is not truly decentralized, and so is little more than blockchain hype on a traditional system.

The bitcoin developer and perennial blockchain skeptic Peter Todd has recently taken to tweeting a number of his concerns, and while they’re all focused around the question of decentralization, his real uneasiness with Ripple revolves around the company’s opaqueness.

Ripple relies on a Unique Node List (UNL) – currently encompassing five core validators all run by Ripple – when matters of consensus need to be determined. According to Ripple, it cannot recommend any new validators to this list. In Todd’s interpretation, Ripple has been slow to add new nodes to the UNL primarily because these validators must be trusted entities that stay in consensus with Ripple itself.

And while a number of people and organizations run nodes on the Ripple network, according to Todd, choosing to route transactions through a node that’s not a part of the UNL means that if your node comes to a different determination about the state of consensus than those nodes run by Ripple, it could split you off onto a separate “Ripple” chain.

While Birla seemed to acknowledge the issue in conversation, he also said XRP Ledger (which was rebranded from Ripple Ledger last year) was decentralized in that it is open for anyone to use or build on top of.

“Anyone can download the XRP ledger package and become a validator and start broadcasting immediately, but getting everyone else to listen to you is a second point,” Birla said.

To address the paltry number of trusted nodes on the UNL (in comparison, bitcoin has about 10,000 validating nodes and ethereum has about 30,000), Ripple released a scaling roadmap which stated it intends to increase the number of trusted nodes on the UNL to 16 over the next 18 months.

But according to Todd:

“The really dangerous thing here is Ripple’s technical documentation doesn’t make any of these risks clear – nowhere do they describe in detail how nodes can fall out of consensus with one another if their UNLs don’t match.”

First step

Todd continued, saying that for Ripple’s bank clients, being transparent about it’s model as a centralized system that users can fully validate shouldn’t be much of a problem..

“For some customers that may even be seen as an advantage,” Todd told CoinDesk.

Yet, he alleges that Ripple muddies the waters because “they don’t want the market to lose confidence in XRP.”

This much is clear: right now the market has a lot of confidence in it.

Yet, while it seems people are rushing into XRP ahead of any real use of the cryptocurrency, Birla said that more companies will be announcing their use of XRP in the first quarter of 2018.

Birla said he expects a “full list” of XRP users this year, telling CoinDesk about the xRapid product, which is basically xCurrent with XRP on top:

“There is a whole pipeline of folks now integrating into that product. We’ll release names early this year.”

He continued, saying the success of getting banks to use Ripple’s non-cryptocurrency-related products is positioned as the first step of a bigger plan to move banks to XRP.

And Ripple has had success in getting financial institutions to see the value in its xCurrent product. In total, since it started its “war” on SWIFT and the legacy financial system, more than 100 companies have joined its network.

As far as XRP itself is concerned, though, only one company has publicly revealed its use of the cryptocurrency. In October, Mexican financial services firm Cuallix partnered with Ripple to convert cross-border fund transfers into XRP for easy delivery between currencies.

When asked whether new XRP investors understand the relationships between Ripple, its clients and XRP, Birla said, “Big names like Amex and smaller names, like other companies were signing, are all helping build out the network. We’re adding on the liquidity [part] after that” – that is, the xRapid product that uses XRP.

He continued, “We’ve been really clear. The way that we looked at solving problems was a very methodical approach, a pragmatic approach.”

According to him, XRP’s use case couldn’t be realized until Ripple had built out the network.

“We’ve identified a use case, we’ve identified a pain point, we have real customers using our product,” Birla said, concluding:

“We have continued to get market traction. That has continued to get a lot of interest in Ripple and XRP in general.”

Disclosure: CoinDesk is a subsidiary of Digital Currency Group, which has an ownership stake in Ripple.

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