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Owen1

Future XRP price IF mass adoption happens

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I'm not sure I follow that logic.  Just because there is $27trillion in nostro/vostro accounts to mitigate counterparty/settlement risk with the current Swift setup will not mean that with xrp they will have to hold the same amount of $value in xrp.  From my high level understanding,  xrp will drasitically reduce/eliminate the counterparty/settlement risks associated with crossborder money transfers, so will the need to hold these nostro/vostro balances.  This is the core value proposition that xrp will deliver.  The question is how do we quantify and measure the utility of xrp??? 

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Just now, Owen1 said:

Yes I assumed for now that all XRP were released just to make sense of it all..  Any help in why the original post may be incorrect is welcomed. Thanks.

The assumptions you laid out are for bank use in cross boarder settlements.  I think the 600 lb gorilla is ILP and how it has the potential to facilitate settlement across all platforms and be some multiple of cross boarder payment volume.  I agree, I see XRP at more than $500 10 years out, just stating you were only highlighting one major use while potentially overlooking an even bigger one down the road.

2 minutes ago, Archive said:

You are only trying to calculate ppu for cross boarder payments.  The secret sauce lies in ILP and the interoperability and trustless settlement of value between various chains, ledgers and private systems. The calculation is also assuming 100% of tokens are in circulation and are not held as a reserve currency or for speculation.  $270 is on my lowside 10 years out, but who knows, just my unqualified opinion.

Personally I think you need to take into account total global assets and figure out what the utility is worth for trustless settlement and sourced liquidity across all platforms and divide by current circulation.  

 

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8 minutes ago, nav said:

I think it's the sheer volume of assets transferred over the protocol (while sourcing liquidity from XRP), and bridging ledgers with ILP, that will drive the price up.

This.  The potential value transfer over ILP is multiples of cross boarder payments.

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14 minutes ago, syns75 said:

I'm not sure I follow that logic.  Just because there is $27trillion in nostro/vostro accounts to mitigate counterparty/settlement risk with the current Swift setup will not mean that with xrp they will have to hold the same amount of $value in xrp.  From my high level understanding,  xrp will drasitically reduce/eliminate the counterparty/settlement risks associated with crossborder money transfers, so will the need to hold these nostro/vostro balances.  This is the core value proposition that xrp will deliver.  The question is how do we quantify and measure the utility of xrp??? 

This is a good additional bit of information. Thank you.  What would you forecast the price to be in 12 months?

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13 minutes ago, Archive said:

The assumptions you laid out are for bank use in cross boarder settlements.  I think the 600 lb gorilla is ILP and how it has the potential to facilitate settlement across all platforms and be some multiple of cross boarder payment volume.  I agree, I see XRP at more than $500 10 years out, just stating you were only highlighting one major use while potentially overlooking an even bigger one down the road.

 

I definitely am not knowledgeable enough about XRP or banks to be able to see how it will all work or what it will mean for the price of XRP, or for any other uses, but it serves as a good exercise to just imagine one aspect of its use.  If I am wrong in my thinking then that is fair enough - just needed some input from some people who had more of an idea than myself.  Thanks guys.

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13 minutes ago, Archive said:

This.  The potential value transfer over ILP is multiples of cross boarder payments.

I am sorry but I still do not understand this enough myself to be able to think of what value it will give for XRP - any help would be appreciated. 

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7 minutes ago, Owen1 said:

I am sorry but I still do not understand this enough myself to be able to think of what value it will give for XRP - any help would be appreciated. 

Take a look in the interledger discussion threads and that will help with more background and context.  

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On 1/12/2018 at 7:44 AM, Owen1 said:

Hey guys, I am just trying to get my head around something.  Is this at all correct?  

I have heard that SWIFT sends $5 Trillion worth of money transfers PER DAY and that the banks and financial institutions actually have about $27 Trillion locked away in accounts in order to facilitate these money transactions; to be able to have the money there in order to send it.  I hold my hands up that these are just things I have heard and I am not sure about the figures - a lot of you guys out there are more knowledgeable than me and can either confirm these amounts or not. 

In order to get my head around this I am going to assume for a moment that XRP is a success with banks and gets mass adopted by them to settle payments worldwide.  Just play along for a moment and assume this.

If there are $27 Trillion sitting in accounts to facilitate payments, and they suddenly start using XRP then I am guessing the whole value of XRP that they will need to hold is going to have to be at least 27 Trillion?  if there are only 100Billion XRP units well a figure of $3 per XRP is not going to be enough is it?  So banks are going to have to purchase and HOLD massive amounts of XRP in order to have them available to use to make money transfers, and therefore the circulating supply basically will be shrunk right down for investors like you and me.  In turn this in itself will mean a price increase due to low supply and possibly more demand (good thing for banks as the value of XRP they hold will go up and they will hold the $27Trillion total that they require, and also if they buy them sooner rather than later it will cost than the $27Trillion that they are locking away right now, making it possible to use some of this money - I am just thinking out loud, I may be wrong).

So in effect 27 Trillion/100 Billion = $270.  XRP standing at a value of $270 per XRP is what it would take to cover the value of the USD$ currently being held by banks in accounts to facilitate these cross border payments or money transfers.  And this is IF the banks hold ALL the XRP that will ever exist.  So am I correct in assuming then that if XRP is adopted fully by banks that the price of XRP could in theory climb to at least $270 per XRP.? 

This is without any use by other big worldwide-known companies which may start accepting XRP as payment etc.  Obviously this may bring up the question of  "well if banks use/hold all or most of the XRP how will there be enough left for other businesses to make use of and accept as payments?". The only answer from the top of my head is that the per XRP price actually far exceeds $270 and banks will not need to have so much of it to cover the $270 Trillion needed.  For example if we double the $270 to $540 then the banks would only need half of the total supply of XRP for their own purpose and the remaining 50 Billion XRP units could be free to be used in other ways, e.g investor purchases and acceptance by big companies as payments.

As I said I may be wrong here and I am not at all giving investment advice, but if I am wrong I would love to hear why exactly. 

Thanks.

Dude why are you so smart.....do you have a sister i can marry to get your family gene???

 

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On 12/01/2018 at 6:23 PM, sammy8soete said:

If banks need to hold the same value of xrp in their accounts as they do now (in different currencies) whats the point of xrp? Its supposed to facilitate on demand liquidity... 

because they can source it in real-time, they can move positions whenevr they like and settle it in ~3 secs

you can't up and move funds easily when they're trapped in many accounts around the world

for the xrp ledger all you need is an account reserve and away you go ; having capital tied up in banks around the world in various jurisdictions, all subject to political, fx volatility etc as well as fees, it being slow and hard to access, lacking transparency in-flight... etc etc

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17 minutes ago, zerpdigger said:

because they can source it in real-time, they can move positions whenevr they like and settle it in ~3 secs

you can't up and move funds easily when they're trapped in many accounts around the world

for the xrp ledger all you need is an account reserve and away you go ; having capital tied up in banks around the world in various jurisdictions, all subject to political, fx volatility etc as well as fees, it being slow and hard to access, lacking transparency in-flight... etc etc

Do they even need an account reserve? If a customer wants to send X amount to Timbuktu then the FI can use the customers reserve/deposit.

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