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Track 1 xRapid Corridor and earn 500 XRP

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7 minutes ago, Hodlezerper said:

I'm still not convinced here. I could be really, REALLY dumb (most likely scenario) but I haven't heard anything yet that explains it or convinces me. 

Tulo got close with the comment about how many times assets could be sent back and forth, but that was in a theoretical vacuum of space. 

I don't see how a private market that exists somewhere and somehow everyone agreed to be a part of it for minimal returns when there are larger returns to be made in the open market for people willing to take risks. 

Sure, theoretically we could shoot zerps around at high velocity, but will that happen just because we think it will? 

@1todd960 you seem to have had some revelation with what they're saying. 

Could you enlighten me? 

I'm about as clueless as can be myself.  Lol

I keep reading post after post by @JoelKatz and I can see what he's talking about, but can't seem get one plus one to add up to two.  His posts seem to contradict what I'm learning here.  The fact that it's been stated on here that the price will only increase through speculation is what keeps making me more confused.

Per @JoelKatz when ask how the price would increase if banks don't hold xrp.

"If they use XRP to transfer the money, three things happens:

1) Either they hold that XRP to use it when they need it or someone else does. Either way, XRP is held which increases demand.

2) Anyone who wants to profit from other people's payments will hold XRP since that's what people will need to buy the currency they're delivering. Again, increasing demand.

3) If XRP is used as an intermediary in a lot of payments, then anyone who needs to make payments into many of those corridors (like Uber, AirBNB, and Seagate) can halve their payment costs by holding XRP, especially since they can get it cheaply (by buying it from people who are making payments and need to sell it to complete their payment). Again, increasing demand."

Also:

"It would be expected to increase the value of XRP two obvious ways:

1) Someone who has money and wants to be opportunistic will want to hold their money as XRP. That way, they can sell it to any Bank A for any payment bridged by XRP.

2) Someone who needs to make payments out to many different corridors (like AirBNB) will want to hold XRP because that way they can cut Bank A out of the transaction and halve their fees and they only need one pile for every corridor XRP is liquid into rather than one for each corridor.

Imagine if you're Uber in a world where many international payments are bridged by XRP. Instead of having to keep piles of various domestic currencies all over the world and constantly rebalance them and interact with dozens of different payments systems, you could just keep one big pile of XRP and interact with a single protocol.

When you need more XRP, you can facilitate other people's payments by providing them the fiat currency they need to deliver in their payment. You would not only not pay a premium to buy XRP, you could get it at a discount by providing fiat to others when they need it. When you want to make a payment, you only have the XRP->fiat half, so your costs are again reduced. And you only need to manage one pile of funds for all the corridors XRP is liquid to."

Seems to be alot of xrp moving, buying and trading aside from pure speculation.

 

 

 

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25 minutes ago, Hodlezerper said:

I'm still not convinced here. I could be really, REALLY dumb (most likely scenario) but I haven't heard anything yet that explains it or convinces me. 

Tulo got close with the comment about how many times assets could be sent back and forth, but that was in a theoretical vacuum of space. 

I don't see how a private market that exists somewhere and somehow everyone agreed to be a part of it for minimal returns when there are larger returns to be made in the open market for people willing to take risks. 

Sure, theoretically we could shoot zerps around at high velocity, but will that happen just because we think it will? 

@1todd960 you seem to have had some revelation with what they're saying. 

Could you enlighten me? 

But to be more direct.  Tulo and graine are saying that the liquidity is first created by the market makers getting xrp directly from ripple.  Once that liquidity is established, then the bank can contact the MM to purchase xrp and transfer said xrp to the other end (cross border).  Then the transaction would reverse and the same xrp would be exchanged for a predetermined amount and sent back to said MM.  Hence creating a neutral market which won't affect price.

Edited by 1todd960

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I'm just as confused as you guys. And to make matters worse, I'm home drinking a few baileys! I'm drunk typing here.

The way I see it, through xRapid there is an increase in volume. An increase in customer base, creates more demand because of competition. Increase demand equals more XRPs getting burned. As more get burned, then there is less of them on the market, so they become more valuable.

Simple concept is this. You have 90 families but only 100 single family homes. The market matures a reasonable price. The house (the asset) goes up in price when population increases, now we have 150 families in need of a home and only 10 for the remaining group to go around. This example may sound silly, but think of Amazon's new headquarters and what that will do to home prices once it is announced where they are settling.

In sum (sorry I'm drunk at this point ?), less XRP to go around from getting burned through xRapid and a growing client base (banks, FIs and payment providers) will increase the price. Speculation will add to these price swings. But unlike gold, XRP just like an asset that has a use ie. Real estate, will go up in value when demand is high and supply is low. 

Edited by Guest

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31 minutes ago, Hodlezerper said:

I'm still not convinced here. I could be really, REALLY dumb (most likely scenario) but I haven't heard anything yet that explains it or convinces me. 

I think @Graine might have me on his ignore list....   I'm not yet convinced that XRapid is price neutral.

 I mentioned him earlier while proposing that human nature and their interactions with markets will mean the initial price-upwards buys of XRapid transactions should support price and trend it upward.   I do conceded that a strict logical view of the total transaction would seem to make it neutral.

I forgot to mention in that earlier post that fees come into play also.....  market maker spread 'fees' mostly.   I'm not smart enough to work out how they would affect things though.

As I said earlier....  I guess until someone explains it in detail or until it's really happening I will just trust David's apparent belief in it.

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Man, I love XRP chat. Alright guys. I'm out. Bailey's is calling me for a refuel.

#XRPthefrigginStandard ?

Edited by Guest

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3 hours ago, tulo said:

MM1 had 100M XRP before the deal, and after the deal it has 100M USD from the bank. When the payment is reversed, it will offer its 100M USD for 101M XRP. So he get's back the XRP with a gain from the spread ;)

The MM offer is now for cheaper XRP....   He is trying to buy the XRP cheaper.  They were $1 before he started....    now he wants to buy them back at less than a dollar.  Is that going to happen?   What pushes the price down for that to happen?

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4 minutes ago, Tinyaccount said:

 I'm not yet convinced that XRapid is price neutral.

Nor am I. It can only be price neutral in a siloed and simple corridor. As soon as more corridors are added with different currencies, time zones (main hours of doing business) and supply/demand factors then imbalances will arise. I just don't see how all these forces will be price neutral.

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1 hour ago, 1todd960 said:

I'm about as clueless as can be myself.  Lol

I keep reading post after post by @JoelKatz and I can see what he's talking about, but can't seem get one plus one to add up to two.  His posts seem to contradict what I'm learning here.  The fact that it's been stated on here that the price will only increase through speculation is what keeps making me more confused.

Per @JoelKatz when ask how the price would increase if banks don't hold xrp.

"If they use XRP to transfer the money, three things happens:

1) Either they hold that XRP to use it when they need it or someone else does. Either way, XRP is held which increases demand.

2) Anyone who wants to profit from other people's payments will hold XRP since that's what people will need to buy the currency they're delivering. Again, increasing demand.

3) If XRP is used as an intermediary in a lot of payments, then anyone who needs to make payments into many of those corridors (like Uber, AirBNB, and Seagate) can halve their payment costs by holding XRP, especially since they can get it cheaply (by buying it from people who are making payments and need to sell it to complete their payment). Again, increasing demand."

Also:

"It would be expected to increase the value of XRP two obvious ways:

1) Someone who has money and wants to be opportunistic will want to hold their money as XRP. That way, they can sell it to any Bank A for any payment bridged by XRP.

2) Someone who needs to make payments out to many different corridors (like AirBNB) will want to hold XRP because that way they can cut Bank A out of the transaction and halve their fees and they only need one pile for every corridor XRP is liquid into rather than one for each corridor.

Imagine if you're Uber in a world where many international payments are bridged by XRP. Instead of having to keep piles of various domestic currencies all over the world and constantly rebalance them and interact with dozens of different payments systems, you could just keep one big pile of XRP and interact with a single protocol.

When you need more XRP, you can facilitate other people's payments by providing them the fiat currency they need to deliver in their payment. You would not only not pay a premium to buy XRP, you could get it at a discount by providing fiat to others when they need it. When you want to make a payment, you only have the XRP->fiat half, so your costs are again reduced. And you only need to manage one pile of funds for all the corridors XRP is liquid to."

Seems to be alot of xrp moving, buying and trading aside from pure speculation.

 

 

 

Ok here's how I understand it. Assuming banks don't buy cheaper XRP II for this purpose and do it themselves, it will be MM will be buying XRP to do the transactions on behalf of the Banks.

 

People keep talking about velocity velocity velocity. Ok great. Guess what? The USD also has velocity. If Bank A sends 10m USD worth of foreign currency to Bank B. And Bank B sends 10m USD equivalent to bank C and bank C sends 10m USD equivalent to to bank A, then 30m USD has been sent. You could say the 10m USD worth had a velocity of 3 divided by whatever time-period it took.  But in the real-world the currencies are of a different denomination so you must do exchanges between Nostro/Vostro; effectively locking up 30m USD worth for these transactions to banks in different countries which eradicates this velocity. Basically, that velocity of 3/time period we mentioned above doesn't exist unless using a world reserve currency. But banks won't ever agree to a world reserve banking currency otherwise XRP would have no purpose.

Analogously, people seem to think that you would be able to reuse the XRP for all these transactions if using xRapid. But that will only be the case if the banks all commission the same MM for those 3 transactions. That's not going to happen. Imagine how long it will take to find one MM to plan out 3 transactions in advance. No chance! Banks do many many thousands of transactions per second. It would take hours to coordinate each one in advance.

Realistically, MMs will take the place of Nostro/Vostro accounts and each Bank will commission out their own MM to be their private MM. Yes, it will probably be as simple as JPMorgan having a MarketMaker division. So when Bank A wants to send to Bank B using xRapid; Bank A will have a "full-time", let's called it MM.1, that they will use to transact with MM.2 which is the "full-time" MM for Bank B. If MM's can transact with each other quickly, each MM bringing one half of the transaction, instead of trying to coordinate the entire thing themselves, they will be able to lower their costs. What I'm describing is literally the privatization of Nostro/Vostro accounts with the benefit that speculative whales can be making arbitrage when acting as MM while providing banks with instant liquidity without the need for Nostro/Vostro. In a scenario like this I can't help but see Jevon's Paradox occurring; not just from demand side (more people wanting to do Intl payments); but also from aggressive supply side (MM's wanting to acquire more to leverage profits). The largest MM's will only want to transact with the largest MM's to save the most money so there will be a rush to keep acquiring more and more. 

 

@OzAlphaWolf What I just described is exactly what you just alluded to: a non-silo'ed ecosystem with aggressive supply-side competition (race to be the largest holder) that is absolutely not price neutral. Whoever says XRP is price neutral is totally wrong. You can reduce any price neutral argument to its author basically something as ridiculous as the following  "1 XRP would be enough to satisfy the entire world's demand by just moving around the world many times over at hyper speed".  Yeah ok you can say "what about fees?" or "what about max TPS"; my reply to that is they want to examine price-neutrality in a vacuum so I get to consider things in a theoretically perfect conditions to show how ridiculous what they're saying is. The authors of "price-neutrality" are in essence hypocritical by trying to have it both ways. 

Edited by Atomic1221

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Great discussion guys, thanks.

One thing that stands out to me here is the psychological aspect. Are the people here who says xRapid will not increase the price saying that David Schwartz is either mistaken about possible increases or doesn’t understand how the thing he is making is going to affect the markets? A third option is he and all others at Ripple are lying and this really is a scam.

This may be my bias, but it seems like there must be something that the ‘doubters’ here are missing or don’t know, because I don’t think David is lying and I don’t think he knows less about this stuff than we do. 

tldr: there must be more to this that we don’t know

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6 minutes ago, 1todd960 said:

Thank you @Atomic1221 making more sense.  And that rush to aquire more and more will create more demand and increase price.  Correct?

Correct! It has to. There's no way there will be some central middle-man/market maker using his 1 billion XRP to do all the world's transactions. As soon as theres a few MM's and non-agreement between the banks there will be competition. And MM's will start only taking half/one side of the transaction; and it will soon (nearly) always require 2 or more MM's to make every transaction happen.

The entire ILP platform and its existence furthers the notion that Ripple believes it's ledger will be a live marketplace of bids and asks happening for each transaction in real-time. ILP wouldn't be needed at all if just a single MM or a database of a few MM's would suffice to complete all the ledger transactions while keeping XRP price-neutral. It's utter nonsense when people say that. 

Edited by Atomic1221

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4 minutes ago, Atomic1221 said:

Correct! It has to. There's no way there will be some central middle-man/market maker using his 1 billion XRP to do all the world's transactions. As soon as theres a few MM's and non-agreement between the banks there will be competition. And MM's will start only taking half/one side of the transaction; and it will soon (nearly) always require 2 or more MM's to make every transaction happen.

The entire ILP platform and its existence furthers the notion that Ripple believes it's ledger will be a live marketplace of bids and asks happening for each transaction in real-time. ILP wouldn't be needed at all if just a single MM or a database of a few MM's would suffice to complete all the ledger transactions while keeping XRP price-neutral. It's utter nonsense when people say that. 

Excellent job explaining how it all comes together!  Thanks again.

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9 hours ago, Graine said:

Tl;dr you have to sell what you buy or vice versa, in a way that minimizes the xrp/fiat volatility. The only thing that would grow from it is the volume in target markets. Probably

Im not sure i get you. Are you implying that the premise upon which most of us invest in xrp, i.e. xrapid adoption will increase value, is not correct?

I invested with the understanding that the value of xrp liquidity available to be used by xrapid would have to be greater than the maximum amount being transfered at any given moment.

So can the current price of xrp succesfully provide liquidity to support even the most pie in the sky potential future usage? Say all of swifts us$5trillion per day.

If thats the case whats the point of hodling except as a gamble?

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