The OG

“Ripple is interesting in that it’s the only other system that does something with trust besides concentrate it into a central server.

Satoshi Nakamoto, May 2009”

Source: https://mmalmi.github.io/satoshi/

This is something that comes up a lot. People in crypto get very triggered by it.

Just to Clear Things Up

Post Fiat will be a new L1. It is an XRP token right now. It will use XRP’s security model, and have many of the same properties. But it will replace the UNL selection process. And the tokenomics - which favor a central entity. With an AI based social contract runnable by anyone with a GPU and access to open source AI models.

We are currently developing the mainnet, at which point the Post Fiat Token will leave XRP. Post Fiat Tokens – will convert 1:1 into mainnet tokens. So what I’m writing about here is why I selected XRP as a model for a new network. And while I am long XRP as many of you know, Post Fiat is by far the larger economic interest for me.

Battle Tested

What it boils down to is pretty simple.

XRP is really old. It’s worked for a long time. It’s very liquid. It has not gone down. It has very cheap, fast transactions. It has not - over the course of its history been double spent. The Central Entity, despite being attacked by the US government, has mostly survived and even to some extent merged with the government. Because governments understand that blockchain technology development is important to their long term plans (which involve CBDCs).

The main job of crypto is to be simple enough to store money, in very large quantities, intelligibly and securely. At $2.37, XRP is up enormously since being invented. And it has a fixed supply. XRP and Bitcoin are the only protocols that have proven their ability to execute. Full stop. Proof of Stake simply hasn’t been around long enough for us to say it’s a long term viable security model. And now that ETH is inflationary - it is also unclear if Proof of Stake is a viable economic model.

SOL is currently doing $1.6m a day of fees. It would need about $14m a day to overcome its inflation. High speed, and greater decentralization are very expensive.

Process of Elimination

I actually started experimenting buidling Post Fiat as a SOL token during meme mania - and the Network was going down frequently, and the API tools were failing silently. Transaction costs were also variable and relatively high. I also tried BASE. BASE transaction costs were too expensive and bridging was hard.

XRP python tooling is delightful, transactions cleared quickly, and it just “worked” as a messaging layer for an AI agent to pay humans to do things. And more importantly XRP validators are extremely cheap to run. Because they don’t require the full history and RippleD is scoped down and very efficient software. I would estimate the Unique Node List for XRP (that secures the actual network) spends less than $1m per year doing so with an extremely low energy footprint

A Mixed History

I’m very familiar with XRP. At various points I have been aggressively short – mostly during the Biden Admin, because I thought Ripple Labs would be fined billions of dollars or even worse get hit by some issues with OFAC (they operate in a really weird part of the bank). After Trump won, those concerns mostly went away. And you saw my current incarnation of endless XRP bull posting.

This brings up an important point. XRP has stored value in spite of the fact that it hasn’t really succeeded in the Transaction Bank. The same way that Bitcoin has succeeded in spite of not being ‘digital Cash" as Satoshi Nakamoto envisioned and wrote about repeatedly in his emails. The fact we are here – is actually more a testimonial in favor of the XRP security mechanism. Just as the current Bitcoin price is a good illustration that people appreciate the security guarantees of Proof of Work.

It’s Either BTC or XRP for Money and I Fear Satoshi

But the truth is - I don’t have the audacity to attack Bitcoin or make a fork. My Brother, Travis, does. With Ambient. And I think he has a fighting chance – just because he’s got the hardware macro behind him. So - I genuinely think Ambient will have insane amounts of hash power. And that’s getting even more likely with what I believe will be an on-chain leverage cyclce where people buy GPUs with debt, write off the depreciation, then need something to mine. So they’ll mine Ambient. Which will drive up GPU utilization, increasing the yield of on-chain debt instruments, driving capital into the space and so forth. So - Trump is basically guaranteed to kick off a debt capex AI bubble, which already is well under way in Trad markets. And is about to work its way into crypto.

But – having been in the space for a long time the reason you can’t fork Bitcoin is because it’s, at its core, a sort of Libertarian Cult. And they’re quite rabid.

Non Libertarian Ethos is Good Actually

But AI itself, as Thiel noted in his Forward to the Sovereign Individual - isn’t really a very libertarian technology.

Culturally, XRP is the only valuable cryptocurrency that is not libertarian. That’s why people in crypto hate it so much. But it also makes it the ideal primitive for a Super Powered AGI to live on chain. And even if you don’t believe in the AGI argument. The entire crypto bull run is sponsored by the US government. And banks want in. So - a coin that is ‘part of the system’ - is actually ideal, because it aligns with why crypto market capitalizations are where they are.

I am not a fan of hypocricy. BTC - the anti Bank coin - sponsored by Blackrock has a bad, nonsensical feeling to me. I’d rather just say “I’m working with governments, and with banks. I think that AGI is bigger than all of us, and we’ll need to bring everyone along for the ride”. Or more philosophically, I don’t really buy into the whole “run away with your BTC sovereign individual style”. Because I’d rather just … have basic social ideas like contribution, or people being able to get credit. Call me crazy. But the future of finance - to me, seems like one that is integrated with governmental and banking institutions. Even if they look very different.

The Future of Finance is AI

And sticking on the cultural aspect - I also spent a lot of time studying the XRP army. Talking to people in it. Trying to see why they hold the coin. People really just like being part of the future of finance. They think it’s cool!

They are not, for the most part, crypto anarchists. And I think that’s important. Because the coin I want to build - is fundamentally not anarchic. It is based on a rules based order, proposed by AI.

And I think even inside of finance, people acknowledge that the future of finance is AI. So insofar as the XRP army wants to be part of the future of finance, I feel that I can deliver that to them very effectively by making an AI capital markets coin. In a way that a remittances focused coin would have difficulty doing.

This feels less arrogant than trying to activate the proof of work Bitcoin Maxis. And seems actually coherent.

Low Fixed Investments: A New Network is Actually Sane

The second, massive reason to build an XRP fork – is economic. Both Proof of Stake and Proof of Work require massive fixed investments and when you make a new network, those investments do not follow you. But that is not true of XRP, which is secured by RPCA - and is primarily a Unique Node List. There are not miners, or stake that make XRP more secure. The question is institutional participation in the UNL - something which we are already making a ton of progress on at Post Fiat.

The big change is that investment banks and hedge funds are willing to engage in crypto in a deep, meaningful way. And that wasn’t true for most of XRP’s history. So XRP in some ways had a regulatory moat because it was the only entity with the stones to sue the US govt and operate in the US. And the only org with the warchest. But now - people actually want to do business with crypto companies. And especially with AI companies.

With Trump - however, tariffs and OFAC treatment of Iran - are still going to be hard. So in many ways, the investment bank is a far less spicy part of the bank to interact with. And financial institutions are primarily engaging with crypto in a capital markets capacity (underwriting MSTR debt issuances, SPACs, ETFs, futures products etc). Not in a remittance or actual payments capacity

So Post Fiat – is starting out where the action is. Vs where we thought the action would be in 2013.

Application of Large Language Models to Crypto’s Largest Unstructured Database of Plain English Memos

And the final point - was that XRP itself is a vast unstructured database. With plain english memos. And a doxed Unique Node List validating the chain. And such a configuration was more or less perfect for the application of AI to

  1. Determine who the legitimate validators are (for example, on the XRP UNL, there is 1 validator XRPgoat.com, and one that is the University of Waterloo. AI systems can easily tell that one of those is a lot more legit)
  2. Tell which users are actually using the chain, earning a right to be on the validator list.

And that’s Post Fiat’s biggest difference with XRP. It’s - in a way. A lot more humble. XRP is an all in bet on the transaction bank. Whereas Post Fiat is betting 55% of FDV on “Validators doing cool things”. We have no idea what those things are and are only really betting that AI will be able to determine how cool they are, and reward them fairly. Which given the macro - is a fantastic bet.

Our scoped down equivalent of Ripple Labs is called AGTI - and it’s razor focused on trading use cases, and developing ‘The Task Node’ - which enables AI based vetting of individuals. And self improvement. The task node is a whole separate discussion. But suffice to say, I’m not Brad Garlinghouse. I’m the Janitor of Post Fiat. And if AI isn’t determining the value of the chain and its validators - then I am doing my job very very wrong.

Scoping it Down

So – that sort of brought me to a simple business analysis.

  1. We can deliver the future of finance coin to people who want to be part of that - and if XRP army shows us one thing. People are very excited about the Future of Finance.
  2. Other crypto protocols think this is really stupid despite it being a $230B TAM which means less competition, which is structural due to the anarcho capitalist ideology of most of crypto (including BTC and SOL).
  3. Creating a new version of XRP doesn’t really require forking billions of dollars of stake or infrastructure
  4. But if we create a new version, it still benefits from the time-tested conservative architecture and is somewhere that I can keep my money
  5. We can move the use case of the chain to be in a part of the bank that really benefits from blockchains and is more proximate to token holders (investing /investment banks / trading desks)
  6. And it’s not just a pure fork. We are changing the incentive system fundamentally to align with a future economy driven by AI instead of centralized authorities. Aka Post Fiat. So it’s just a totally different vision

We Will Both Win Because Fiat is Cooked

So that’s the long answer to a question I answer over and over. XRP is the jam. It will do great. The transaction bank use case could unlock trillions of dollars of reserves if executed well. But that’s not our bet. Our bet is that RPCA is an old school consensus mechanism, that “just works”. And is a place I personally would put all my money without losing sleep. It’s battle tested. And when you’re making money, that’s incredibly important.

In the long run, I think XRP will benefit a lot from Post Fiat. Closer to our TGE I think Post Fiat will generate a lot of buy pressure for XRP for reasons that will become apparent in the future. And the work we’re doing on the UNL could be ported in a useful way to proposals at XRP. I’m going to a conference in Singapore soon to kick the tires on the new development initiatives in capital markets to make sure Post Fiat ships with the bleeding edge of what is available (Hooks, especially is exciting).

And like I said in my last post, HSBC can exist at the same time as Goldman Sachs. But do completely different things and still be called finance stocks. The same way that XRP and Post Fiat can exist and both be finance coins.

So that’s a long clarification but I think I just needed to spell everything out both for myself and the community.