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Sagat

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    Sagat reacted to BobWay in Answer: Wen Moon?   
    I don't know.
    As I've mentioned in my introductory thread, I am bullish on XRP in the long term. I own XRP and I also own Ripple stock.
    Ripple stock is not publicly traded and is generally much more illiquid that XRP. However, based on other people's reports of selling Ripple stock on the secondary markets, it appears that the price of Ripple stock is closely correlated to the price of XRP. Based on my back of the envelope calculations, the market value of my investments is split about evenly between stock and XRP. If I could, I'd gladly trade my stock for XRP to gain the added liquidity XRP brings.
    It is important for you to know that I'm not rich enough to be worth kidnapping.
    It is also important for you to know that if I was a savvy trader I would be. I discovered bitcoin when the price of BTC was 5 to a dollar. I didn't buy it then and haven't traded much over the past 8 years at all. I also had someone point me to Microsoft stock in the very early days. I didn't buy that either. I don't gamble when I go to Vegas and I don't even like to follow the price of XRP and BTC because volatility gives me a huge amount of anxiety.
    So it should be absolutely clear to the average observer, that no one should take trading or investment advice from me.
    But if you want to know my personal unsubstantiated opinion I'm happy to tell you.
    In the long term, I expect Ripple as a company and XRP as an asset to succeed big time. Big time, means dramatically transforming and improving the world's financial systems and the way money works today. I'm expecting XRP's longterm moving average to rise as more more and more transactional liquidity flows through a growing RippleNet.
    In the short term, I expect XRPs price to be volatile and prone to spikes. I expect this volatility will be true of all other traditional cryptocurrencies as well. The reason I think so, is that it appears to me that speculators are trading multiple cryptocurrencies at a time using similar buy/sell strategies. I don't have any evidence of this, it just seems so to me from watching correlation (not causation) in the price charts.
    In the long term I expect XRP to be the "winning" cryptocurrency displacing all the others. I've come to this opinion without considering the low level technical details of the coins or their marketing spin. My opinion is based on the observation that all business transactions are circular. And this circle determines how currencies are valued. Here, the concept of circular business transaction means that when Alice buys widgets from Bob in exchange for currency, from Alice's perspective the value of the good equals the value of the currency used to pay for it. That seems obvious to the casual observer, but in the crypto space people rarely talk about it.
    In thinking about this I realized that the return value flow (the goods or services delivered) defines the value of the currency used to make the payment. Not the other way around. (Perhaps the goods or services have intrinsic value while the currency's value is relative, but that starts to sound like philosophy rather than economics.)
    So I began thinking about the business cycle along with the full transactional circle. Of course, no business transaction can take place without the agreement of BOTH Alice and Bob. Alice wants something and Bob wants something. The relationship is circular but it is not symmetrical. What Alice wants (the good or services) drives the transaction. What Bob wants (the money) is secondary. So in the business flow, Alice always decides what she wants first. Only then can Bob tell her what he wants in exchange (Alice's cost).
    So in my mind, the value of a currency is strictly CAUSED by the number of transactional circles it can participate in. If you make the presumption that any given Alice could potentially want something from any given Bob. And also the presumption that any given Bob could deliver to any given Alice. Then return value part of every transactional circle is unconstrained. So then you must focus on how Bob's choice of currency (what Bob wants) constrains the number of circles that can be completed. Which obviously brings us to set theory. 
    That's just a fancy way of saying if Bob wants a currency that Alice doesn't have then they can't do a deal. So if Bob wants EUR but Alice only has  USD then the deal can't be done. And if the deal can't be done, the return value (goods or services that don't trade) can't support the value of either USD or EUR. So both of those currencies subsequently becomes worth less than it would have been if that deal could be done.
    Curiously, if you add a bridge currency like XRP into the transaction in order to complete the transactional circle, then the return value (which now does trade) equally supports the value of all three currencies. Which seems odd so lets do some simple "figurin".
    Alice wants (X widgets) from Bob. Bob wants (Y EUR) from Mak. Mak wants (Z XRP) from Mark. Mark wanting (Q USD) from Alice completes the transactional circle. So as we stated before by definition if Alice pays then she decided it was a fair (equal) trade. And Mark and Mak thought their deals were fair (equal) as well.  So: (X widget) = (Q USD) = (Z XRP) = (Y EUR). But what would happen if both Alice and Bob used XRP?  Well then you'd have: (X widget) = (Z XRP)
    So my lay man's conclusion (I am not an economist) says that XRP being used as a bridge currency supports XRP's value equally as much as XRP being used as a retail currency. But the set of transaction circles that can be created using XRP as a bridge currency is DRAMATICALLY larger than the set of transaction circles that can be created using XRP or any cryptocurrency as a retail currency. And actually, the set of all transactions that can be completed using XRP as retail currency is a proper subset of the transactions that can be completed using XRP as a bridge currency.
    So to maximize XRP's value, you must focus on the XRP bridge use case. And that is exactly what Ripple is focused on.
     
    But, can't the same be said of any cryptocurrency? Meaning if BTC became the de facto bridge currency then it would be the most valuable cryptocurrency.
    Actually, yes. If that came to pass it would be true.
    But, I proved to myself that you can't actually get BTC there from here. It just mathematically can't happen. BTC as a bridge currency will always initially be a more expensive transaction path than an alternative path without BTC. And nobody has enough BTC to force (subsidize or incentivize) BTC into that position. My same logic hold for all the currently popular cryptocurrencies.  
    But, I believe, it is actually possible to force XRP into the position of de facto bridge currency. And that is what that patent is about.
     
    Of course, I could be wrong in my logic somewhere, or Ripple could fail in their execution, or a million other bad things might happen along the way. So let me repeat, no one should take trading or investment advice from me.
  2. Like
    Sagat reacted to BobWay in List: The First Rule of Book Club... (Please Read)   
    I realized a while back that I always had a bunch of "great ideas" that I clung to (very privately) because I thought they were "valuable". The problem was I wasn't acting on those ideas. As I learned more about "value" I realized I was completely wrong. Nothing is valuable unless it is "liquid". Meaning you can trade that value for some other type of alternative type of value more handy at that instant.
    So I changed my entire way of looking at the world! I decided to capture the value of my latent ideas by making them more liquid. In financial terms, I use them to buy a type of "future" benefit.
    Here's how my system works. It's a type of contract or promise between you and me.
    I promise to tell you all my "great ideas" openly and honestly at no charge or up front obligation. You promise that, if you take my great idea and run with it as a business or a project, you'll invite me to help you. (I love cool projects) You further promise, that if you get rich and I don't... I get invited to stay on your yacht. So if you accept these terms (or even if you don't),  please introduce yourself below.
  3. Like
    Sagat reacted to BobWay in Hi! I'm Bob   
    Hello all. Just wanted to introduce myself. I'm Bob Way, formerly of Ripple. Thank you in advance for allowing me to join your forum.
    Back in the early days of crypto I was pretty active in the Bitcointalk and Ripple communities (under the username "Red"). In fact my community participation was what directly led to me going to work for Chris and the gang at OpenCoin. I made a lot of good friend in the forums five years back. I'm hoping to make some new ones now.
    Bob
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