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How Big Is The Western Union Deal For Ripple?

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34 minutes ago, Tinyaccount said:

I wonder if Ripple have ever set up a test of xrapid usage to see what it does to price.  There are some who think the instant buys will push price upwards and some who think the instant sells will negate that.  

It would be possible to model this market so I wonder if they have done so.

I am guessing that they think it’s an upward pressure else their whole strategy would be puzzling.  

I got a ‘confused’ response from @XRPHdlr so I may not have been very clear.  

Its a topic of interest to us investors in XRP (note...   not Ripple) that when XRapid volume increases it may affect price.  

It is possible to model a market on a small scale to investigate the interactions and then make inferences about the larger market.

 I just wonder if Ripple have done this research.  Since their core asset is XRP and their end game (for the foreseeable future) is XRapid it would nearly be surprising if they haven’t.  

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Therefore, the value of XRP does not directly translate to the value or net worth of Ripple. The two will most likely always be correlated, but it's very possible to get to the point where trillions of dollars are getting moved through XRP but the company Ripple is only worth billions.


This is an interesting dynamic because ripple owns so many XRP; in order to move a trillion per day the value of XRP will have to be higher and Ripple will either own that value or have sold it on the way up, presumably reinvesting along the way. So based on excessively simple math it seems like the book value of ripple will probably exceed $1T sometime around $30 per xrp.

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16 minutes ago, Tinyaccount said:

I got a ‘confused’ response from @XRPHdlr so I may not have been very clear.  

Its a topic of interest to us investors in XRP (note...   not Ripple) that when XRapid volume increases it may affect price.  

It is possible to model a market on a small scale to investigate the interactions and then make inferences about the larger market.

 I just wonder if Ripple have done this research.  Since their core asset is XRP and their end game (for the foreseeable future) is XRapid it would nearly be surprising if they haven’t.  

I really need to understand how xRapid works. I read a couple of months back, someone in here said that the transaction could as easily be done with the price not changing one bit.

Even high volumes..and it kinda bummed me out.

We only have the (market cap / circulating supply) outcome to wish for?

Way too new to all this financial stuff to even start thinking about it :wacko:

Thank you though for clearing it up!

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1 hour ago, Tinyaccount said:

I wonder if Ripple have ever set up a test of xrapid usage to see what it does to price.  There are some who think the instant buys will push price upwards and some who think the instant sells will negate that.  

It would be possible to model this market so I wonder if they have done so.

I am guessing that they think it’s an upward pressure else their whole strategy would be puzzling.  

Considering the involved value at stake (also for Ripple) I'm sure they have done such simmulations for XRP's value as also for its liquiditity.

Concering WU specific it would be interesting to check on which corridors / currency pairs WU's transfer amounts  exactly are on a yearly basis, and check those against the availabity of the related xrp pairs at various exchanges. This might give some more facts about the potential impact of WU usage if they would go full throttle wih xRapid (the next during the next months will be smaller I guess).

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3 hours ago, XRPHdlr said:

Even high volumes..and it kinda bummed me out.

So far I haven’t seen a definitive analysis of how XRapid affects price.  Tulo (I think it was him) did an analysis of market making and that looked like volume might tend to increase price.  (If I recall correctly)

Stepping back to a wider view.....    in general an asset that is much in demand and has high volumes tend to have good price support.  

David Schwartz has intimated in various tweets and posts that increased volume of XRP trading should trend price upwards.  

We will know for sure by years end I think. It won’t have all played out,  but the general trends should be starting to become clear.

I am hoping for massive adoption early and big price rises,  but I’m not game to retire from work just yet.   :)  

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2 hours ago, Amigo said:

Considering the involved value at stake (also for Ripple) I'm sure they have done such simmulations for XRP's value as also for its liquiditity.

So I guess I think so too....    which makes me a bit confident because David Schwartz has intimated that they think volume will tend to increase price.  And if they have modelled it,  and he thinks that.. well it gives me some confidence.  

Personally it doesn’t matter.  I’ve picked my horse and I’m sticking with it until I’m either wealthy or it fails.  Let’s hope the former.   :) 

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As one shrewd investor recently commented (roughly)-

We as investors have a hard time separating commodity token value from equity value.  And we talk about it as one thing. 

We speak of market caps. Market cap to many in finance means the total enterprise value of a company, and what it might be acquired for. 

Yet when we look at the Market Cap of XRP this isn't market cap in the established sense- this is the total value of the tradeable commodities (tokens). 

So the market cap of a company may not be a good apples to apples comparison,  i.e. market caps can be very misleading to discuss, and are undergoing perhaps a new definition from previous frameworks in business.

 

If for instance, one could say Facebook' is worth X, but if every "Like" on Facebook is worth .1X -- there are certainly way more Likes on Facebook at .1X than the total enterprise value of Facebook. 

And if you somehow put a value on those ".1X Likes" then suddenly you would have to value Facebook differently.  The math is different. So we really don't have an economic framework to really work with here, and that's what makes these discussions so hairy.

Likewise XRP can be worth X as the tradeable commodity token within Ripple, but that "worth" doesn't correlate to Ripple being worth a multiplier of that.

XRP,  as a tradeable token at $30, would have a Market Cap of a trillion, but this doesn't have to mean a trillion dollar book value of Ripple the company.   The asset and the company are oddly in unison, yet also divorced when it comes to valuation. It depends upon who is valuing it, and how they value it from an enterprise standpoint.

Generally speaking this pokes a fairly severe hole in the idea that if XRP is worth X amount of USD then Ripple will be the most valued company on earth (more than Apple, Google, Amazon, etc). 

The valuation of Ripple the company, despite encompassing a tradeable commodity token, XRP, with a market cap in the trillions, may not be valued by simple multiplication.  We may have entered a new era of valuations.  This is complicated.  I'm not sure who does understand it?

Perhaps those who are savvy in the world of high finance have something more to add. 

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2 hours ago, xrphilosophy said:

Perhaps those who are savvy in the world of high finance have something more to add. 

Here in opposite world you get the opposite of your wish:  someone who is totally ignorant of high finance has something to add.   :) 

I think that any valuations of Ripple the company when XRP is at say $10 needs to be aware of realities.  Sure at that price their 55 billion XRP have a nominal value of half a trillion dollars.  

But if you value Ripple at half a trillion you are massively overestimating it’s value.  

A company’s worth is a non-trivial thing to value.  A simple P/E ratio or a Gross Turnover or a Market Capitisation figure does not really value the company.  They give you proxies to the real value but they are not the actual value. 

They might clue you in to how much it might cost you to acquire them if you try a hostile takeover (Ripple are private so that doesn’t apply),  but even then, a host of other factors come in to play that can render the values inadequate or incorrect.  And factoring in future value complicates it immensely.

In the case of Ripple, the company would be no more (or less,) difficult to value than any other disruptive startup but for the fact of their 55billion XRP war chest.  

That sheer number creates its own issues.

For instance there is no way to extract that value wholesale in any short term timeframe without totally destroying the market they trade in.  Also any massive disruption of the market also disrupts the usability of the token,  and therefore it’s value.  So how do you value it?

I don’t know the answer but I do know that trivial formulas won’t get anywhere approaching the real value.  

Used judiciously in pursuit of Ripples agenda they could be immensely valuable.  Used indiscriminately as a revenue source they could be self defeating, and in the worst case,  crash Ripples overall value.

The point is that folk who say Ripple can’t become more valuable than all the other Silicon Valley companies combined are partly correct.  But not for the reasons they think.  And the price of XRP won’t stop at some arbitrary line just because it makes Ripple ‘too valuable’.

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21 hours ago, RTKen said:

I have sent with WU a few times. The reciever can pick money out within seconds.

What does WU use to transfer the money with that speed?

Since it is between WU to WU maybe they have an own vostro nostro account and their own "centralbank" to let the money get transfered in that speed?

This is a good question.

You can chat with people in real-time over the internet, can't you? That is what's called messaging and important to distinguish from money settlement. It is very close to what xCurrent does: xCurrent sends messages in real-time (and a lot more, just generalizing here a bit). What WU does is sending the message, not the actual money. The money they are handing out is already at the message-receiver side, sitting in nostro vostro accounts, as you figured out correctly. With xRapid this accounts would not be necessary anymore. 

Edited by xrp-overflow

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8 minutes ago, xrp-overflow said:

The money they are handing out is already at the message-receiver side, sitting in nostro vostro accounts, as you figured out correctly. With xRapid this accounts would not be necessary anymore. 

You are partially correct. A large percentage of transactions are funded by the WU locations' physical cash. The location is reimbursed by WU shortly thereafter along with commission for enabling the completion of the transfer. Even with XRP usage, cash is still required for the end consumer. One potential advantage for these retail locations might be that they can expect to receive their funds and commission more quickly, improving cash flow.

Edited by AlbertStroller

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