Jump to content
Guest1

My Valuation of XRP by Mathematics - I think it's worth $100+

Recommended Posts

Okay, so I can't seem to find an answer for this... Somebody on Reddit claimed that all transactions performed on the XRPL will cause XRP coin burn, even if they are non-XRP transactions. He said that ICOs built on the XRP Ledger would burn XRP and so he concluded that it will be great when we one day have dozens of high volume ICOs trading on the XRPL.

Is this true? That would definitely affect coin burn if true and will most certainly be a mathematical factor to consider, albeit hard to predict.

Share this post


Link to post
Share on other sites
On 12/16/2017 at 10:26 AM, Guest1 said:

 

I have the following mathematical valuation of XRP that I was pondering on and would appreciate your feedback and correction if possible.

Perhaps @JoelKatz Could you kindly comment? Very interested in hearing your thoughts.

Also other logical thinkers and mathematicians or statisticians on the forum.

 

Hypothesis

As the velocity of money increases, XRP is worth as much as the sum of all monies that flow through it.

 

Proof

This can be proven by considering three people (Person A, B and C) with $1 each and with XRP as the transfer medium in the middle.

 

1. Consider a situation where Person A sends $1 to person B. You need total XRP to be worth $1 for the transfer to take place.

2. Consider a new situation where Person A sends $1 to person B and person C sends $1 to person B exactly at the same time. You need total XRP to be worth $2 for both transfers to take place.

3. Consider a new situation where each person sends $1 amongst each other exactly at the same time. You need total XRP to be worth $3 for all three transfers to take place.

4. Therefore by mathematical induction, as the velocity of money increases (i.e. converges towards the "exactly at the same time" above), the total value of XRP then converges towards the sum of all monies that flow through it.

 

In this regard, I would put a valuation in the order of tens of trillions for XRP market capitalization given all the current and future partnerships and with all the monies that will flow through it.

For example, SBI partnership alone is worth roughly 80% of $20+ trillion USD of all Japanese wealth x percentage of assets that are in circulation (i.e. not dormant - e.g. savings). Then we have to add other partnerships and banks on top of that as well assuming South Korea, USA, UK, UAE, Singapore, etc. all come on-board + cross border payments and domestic payments from other use-cases as well.

 

So that would be $100+ per XRP I think if the partnerships that are in pursuit all materialize and use xRapid.

 

I agree with you. A question is the current XRP market cap is about 25 billion dollars. To support this price from the real uses of XRP, there must be 25 billion dollar transactions via XRP on average. 

An interesting point is that the SBI partners manages 80% of more than 20 trillion USD, and this excludes dormant savings (it would be appreciated if you provided where you found this information). 

I wonder if anyone knows the daily global money transaction in USD (or other fiat money).  If we know this, then we can assume the XRP market cap base on the expected market share of XRP in the international money transfer. 

Share this post


Link to post
Share on other sites
On 12/16/2017 at 11:13 AM, Guest1 said:

Sorry just corrected my estimate to be $100+ in the original post. 

$10 trillion / $100 billion = $100.. I had that calculation wrong :P

where did you get the number, $10 trillion? Is that the global daily volume of international transactions in USD?

Share this post


Link to post
Share on other sites

You're all making the assumption that the total amount of XRP in existence at any given time is finite. This is a grossly inaccurate assumption, since I'm going to be introducing a fractional reserve system for XRP. As part of the scheme, I'm going to reserve the right to create new XRP whenever I wish and loan it out with interest. If anyone wants to join me in financing and executing my plan, I propose that we arrange a time to meet up at Jekyll Island sometime during October.

Share this post


Link to post
Share on other sites

My concern is that XRP is not used in all Ripple products, but only in xRapid. 

In short, if Ripple takes a large market share of the total global cross border transactions (15 trillions USD + ), the size of actual transactions using XRP (like in xRapid) may be low.  

For example, if Ripple takes 20% of the total market share (15 trillion UDS) and xRapid takes 10% of the total transactions through all Ripple products, then XRP will be used for 2% of 15 trillion USD, which is 300 billion USD (15 trillion x 0.2 * 0.1). 

In this case, if the velocity of XRP is 10, then XRP would be worth 30 billion USD (while the current XRP market cap is about 15 billion USD).

As would be expected, xRapid will increase the velocity, so the future true XRP value can be lower than 30 billion. 

Please enlighten me, if I am missing something. 

Share this post


Link to post
Share on other sites

I think it's worth at least 20 bucks. 1 trillion worth of xrp will move a lot of value. The really wild card is internet payments with coil/spring. It's a fabulous gamble. 

Share this post


Link to post
Share on other sites
5 hours ago, Karl said:

It's not only about cross border payments. The number of use cases of XRP is indefinite and so is the market price.

Yea. Amazon just launched a computer microwave. Here comes internet of things. IOT will bring with it all kinds of use cases for XRP. We will have billions of devices, probably more devices than humans on the planet that will need a way to transact and inter operate with different payment networks. You need some more milk? Tell your fridge to buy some and have it delivered to your doorstep. It’s very hard to see the future. When the model T was invented the average person could probably not envision a world with major interstate highways making us more connected and enabling what came to be our modern economy. This is the Internet in 1994. Social media does not exist yet. There will be many industries rising from this asset class and the possibilities are unlimited. We are living in a modern day revolution. As Chris Larsen said, the final piece of globalization.

Share this post


Link to post
Share on other sites

If banks accept XRP as a value transferring asset  this will have a cascading effect throughout the financial system and in the future it might be enough to transfrer xrp in its own right as the standard digital currency. I can see when crypto market becomes stable would you keep your value in a limited supply digital asset accepted by the finacial system or fiat that the goverment can just print more off...

Edited by sharpn

Share this post


Link to post
Share on other sites

×