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XRPHdlr

Why is XRP destroyed during transaction?

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11/22/17: 99,993,173,757

Today: 99,993,093,880

= 79,877 XRP Destroyed

How does the system compensate for this loss?

Are they replenished by the XRP which is being held, which we are told will be released slowly into circulation?

Can anyone please help me understand? :wacko:

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Good questions, this should help.

1.

Quote

The XRP Ledger has a mechanism for changing the minimum transaction cost to account for long-term changes in the value of XRP. Any changes have to be approved by the consensus process. See Fee Voting for more information.

2.

No. See @tulo answer above.

3.

I perhaps may not be able to help you understand this but this I feel will help you greatly. https://ripple.com/build/transaction-cost/

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Thanks guys, but what happens after a couple of years using xrp for global transactions, billion of xrps will get lost? I mean, it doesn't sound like a very good idea if your goal is to make this a standard. Flooding circulation just to make up for lost currency, won't that cause inflation in the long run?

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4 hours ago, XRPHdlr said:

Thanks guys, but what happens after a couple of years using xrp for global transactions, billion of xrps will get lost? I mean, it doesn't sound like a very good idea if your goal is to make this a standard. Flooding circulation just to make up for lost currency, won't that cause inflation in the long run?

AFAIK the Payment Channels feature significantly reduces the overall rate of XRP burn as the transaction cost is limited to when the channel opens and closes.  Payment Channels are expected to be widely adopted for use with companies like Visa or anyone handling annual transaction rates in the trillions.  The cost can be adjusted over time if XRP's value increases significantly.  Currently default transaction cost is 10 drops (1,000,000 drops = 1 XRP).

Edited by Zedy44
Removed incorrect comment regarding transaction cost being anything other than an anti-spam measure.

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4 minutes ago, Zedy44 said:

In addition to the transaction cost being used as an anti-spam feature (really a side effect) the cost can increase dynamically based on overall network congestion.

No sorry I believe that is incorrect.   The fee exists solely as an anti spam measure.  No one gets paid that fee so it would be a pointless thing otherwise.

Edit:.  So NOT a side effect.         (I originally meant to say that but forgot...    )

Edited by Tinyaccount

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I didn't realise it's that slow, 80K seemed like a big figure for just a couple of months, even if it's just the beginning. HODL those ripplez y' all!

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4 hours ago, Tinyaccount said:

No sorry I believe that is incorrect.   The fee exists solely as an anti spam measure.  No one gets paid that fee so it would be a pointless thing otherwise.

Edit:.  So NOT a side effect.         (I originally meant to say that but forgot...    )

Your right per the transaction cost reference on ripple.com.  I swear I read an article that discussed network congestion as a factor in the transaction cost increasing.  Perhaps it was the way they worded it as "congestion" that confused me.  I can't find the article now unfortunately, but I'll assume they were talking about congestion in a malicious context. :P

 

 

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1 hour ago, Zedy44 said:

swear I read an article that discussed network congestion as a factor in the transaction cost increasing.

Oh yes that's certainly true.  That's is how the anti spam functionality works.  It quickly becomes far too expensive to hit the network with denial of service transactions as the fee ramps up. 

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In addition to the anti spam ddos effect the congestion idea is that if fees rise that will encourage high volume low priority trans to be held back if starting to get congested.  

To be honest I expect Ripple will be tweaking these things over time as the network and ledger trans grow.  

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