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jag216

A brilliant little exercise (IMHO) in breaking down how we think about money

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Folks may remember I asked a silly question a few weeks ago - with all the use cases of XRP, did they provide enough? Other users pointed out how far the decimal places go - how small a subdivision of a single XRP there can be.

I had a hard time wrapping my head around the implications of this, but thankfully someone on reddit did this for me!

The beauty of this is that the formula breaks down both BTC and XRP into their smallest priceable quantity and extrapolates that into order to get a proper coin count.

We are used to valuing whole coins out of convenience, but in truth the decimal place is immaterial to the discussion. How many of the smallest priceable pieces of BTC and XRP exist?

This is the true coin count of any cryptocurrency, and a windows into the actual purchasing power of the cryptocurrency from a technical perspective.

The fact that the difference between BTC and XRP is only a factor of 23 is astounding. It means that - all psychological barriers to owning less than a coin aside - If you take the current price of a single bitcoin and divide it by the number of potential pieces of BTC that can exist and then multiple that by the total number of potential pieces of XRP that could exist...

Well, $15000 BTC translates to $650~ / XRP.

From a computational perspective, XRP is way - WAY undervalued. Or BTC is ridiculously overpriced. It should be only $50~ a coin.

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No, $15000 / BTC does not "translate to" $650 / XRP. The XRP ledger would be valued at $65T in that case, whereas a $15000 BTC values the Bitcoin ledger at around $315B. Math fail.

 

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