Former Ripple CTO: Investing Creates Value, Gambling Redistributes

On June 17, 2026, former Ripple CTO David Schwartz wrote on X that stock and prediction markets are not casinos. He argued gambling moves existing value between participants, while investing directs capital to productive uses that generate returns over time.

Schwartz posted in response to X users who called trading a refined form of betting. He wrote: “A key way to see the difference is this: If you have positive expected value in gambling, something has gone very wrong. If you have negative expected value in investing, something has gone very wrong.”

He added that a gambler who consistently beats the house reveals a flaw in the gambling system. By contrast, an investor who consistently loses in a properly functioning market faces a problem with their strategy or with the market itself.

Schwartz co-architected the XRP Ledger and served as Ripple’s chief technology officer for more than a decade before moving to a CTO Emeritus role at the end of 2025. He remains active in the XRP community and earlier this year used market-cap calculations to challenge viral XRP price targets that implied valuations larger than the global money supply.

At least 12 U.S. states have moved to classify event contract platforms as gambling under state law. Regulators and lawmakers are considering how to oversee cryptocurrency and prediction market platforms.

XRP traded near $1.19 at the time of reporting, down about 3.6% over the prior 24 hours, with a market value near $74.2 billion, placing it among the top six crypto assets by market capitalization.

The posts on X add a technical voice to public discussion over whether prediction markets and certain crypto platforms should be classified as financial markets or as gambling under state law.