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

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13 minutes ago, Khaleesi said:

By the time those 3 transactions have finished, the same XRP’s are available for the next 3 transactions of equal amounts for the purpose of your example.

 

Yes, but the total XRP still needs to be worth $3 even just for that one second for the initial 3 transactions to take place exactly at the same time.

 

If in the next second there are only 2 transactions of $1 each, then XRP needs only to be worth $2. That is true. However, the total XRP value of $3 will not come down immediately to $2 the next second (think of it as bandwidth or pipeline).

 

If I rephrase the conclusion using your example, it can be said that:

As the number of transactions increases such that there are on average 3 transactions every second for $1 each, the total value of XRP will need to be constantly worth $3 for all transactions to take place every second.

 

Similarly, let's say the number of transactions is on average 2 per second for $1 each, then the total value of XRP will likely converge towards $2.

 

Edited by Streamliner

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19 minutes ago, Streamliner said:

As the number of transactions increases such that there are on average 3 transactions every second for $1 each, the total value of XRP will need to be constantly worth $3 for all transactions to take place every second.

 

Yes

 

so if are you trying to work out how many transactions per second and at what value to determine the value of xrp. The answer is...(drumroll)......how long is a piece of string?

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13 hours ago, Khaleesi said:

Yes

 

so if are you trying to work out how many transactions per second and at what value to determine the value of xrp. The answer is...(drumroll)......how long is a piece of string?

 

No, not necessarily to work out transactions per second. Just giving an example by transactions per second analogy.

 

You can look at it this way:

Assume this is the pattern of number of transactions per second ($1 each):

3 2 1 2 3 3 0 0 0 0 1 2 2 3 3 2 3 1 0 0 3

 

As the velocity of money increases, the total value of XRP in the above example will converge towards $3. If the total value suddenly drops to below $3, then the subsequent second with 3 transactions cannot occur.

 

Edited by Streamliner

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2 minutes ago, Streamliner said:

 

No, not necessarily to work out transactions per second. Just giving an example by transactions per second analogy.

 

You can look at it this way:

Assume this is the pattern of transactions per second ($1 each):

3 2 1 2 3 3 0 0 0 0 1 2 2 3 3 2 3 1 0 0 3

 

As the velocity of money increases, the total value of XRP in the above example will converge towards $3. If the total value suddenly drops to below $3, then the subsequent second with 3 transactions cannot occur.

 

Yes, I understand, however the transaction values outside of your model will not be of fixed value.

Anyway, I have always thought of xrp being worth $1000 

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3 minutes ago, Khaleesi said:

Yes, I understand, however the transaction values outside of your model will not be of fixed value.

Anyway, I have always thought of xrp being worth $1000 

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

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

Edited by Streamliner

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1 minute ago, Streamliner said:

Sorry just corrected my estimate to be $100+. 

$1 trillion / $100 billion = $100.. I had that calculation wrong :P

I agree with your logic up to this point however, my thinking is that using 100 billion as total supply is conservative. We have to consider the supply that is being traded on exchanges and thus, unable to facilitate the transactions on the RippleNet. Therefore, there would be a lower total supply available for facilitating transactions occurring on the RippleNet. The supply on the exchanges would have a velocity of zero. Additionally, the burn rate of XRP should lead to a higher price as volume on the ledger (RippleNet) grows. Thoughts?

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13 minutes ago, Mpolnet said:

I agree with your logic up to this point however, my thinking is that using 100 billion as total supply is conservative. We have to consider the supply that is being traded on exchanges and thus, unable to facilitate the transactions on the RippleNet. Therefore, there would be a lower total supply available for facilitating transactions occurring on the RippleNet. The supply on the exchanges would have a velocity of zero. Additionally, the burn rate of XRP should lead to a higher price as volume on the ledger (RippleNet) grows. Thoughts?

Yes, agreed! The total XRP in circulation will actually be less than 100bn because of:

1. XRP burned

2. Some XRP will sit dormant as savings/investment and exchanges as you mentioned and hardly ever be in circulation (i.e. velocity of zero)

Edited by Streamliner

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