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Interesting thought: the higher XRP value, the easier for banks

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Posted (edited)

While I agree that 1) a higher price per unit of XRP will make it easier to move more money because a) you need less XRP per transaction and b ) from my understanding you are paying less in fees per transaction (even though the fee is marginal). And 2) a higher price will result in less volatility since volatility is measured as a % change in price and as the price gets higher it becomes harder to buy and sell in mass quantities thus moving the market.

However, no where did the I see the mention of velocity of money, which has been covered on the forum before. Velocity of money is a critical component in regards to this discussion. Here is a link where the author explains it fairly well:

https://medium.com/@cburniske/cryptoasset-valuations-ac83479ffca7

What does velocity of money mean? Let's explain through an example:

If we have one, $1 and that dollar is exchanged between two people 100 times, in a given year (i.e. velocity = 100x for that time period) then ($1 x 1) x 100 = $100 worth of economic activity created. Now, lets say that same $1 has only been exchanged between those two people 5 times, in a given year (i.e. velocity = 5x for that time period) then ($1 x 1) x 5 = $5. So, in the case of the second example where we have a velocity of 5x, if we want to create that same $100 worth of economic activity then one of two things must occur. 1) the $1 must rise in value to become $20 so that ($20 x 1) x 5 = $100. Or 2) we must increase the supply of the $1 so that we have twenty, $1's so that ($1 x 20) x 5 = $100. 

Hope this makes sense - please keep velocity of money in mind when considering price as it plays a critical role!

Edited by Mpolnet

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3 hours ago, XRPHdlr said:

Then maybe they shouldnt be tweeting...not everything is a race issue take it easy

You are not a racist, just a plain ordinary *******

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15 minutes ago, Insoniac said:

You are not a racist, just a plain ordinary *******

In here, you may call me whatever you want sir (although I think it goes against the rules).

It still doesn't change the fact that this is a garbage tweet.

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16 minutes ago, XRPHdlr said:

In here, you may call me whatever you want sir (although I think it goes against the rules).

It still doesn't change the fact that this is a garbage tweet.

It’s a post not a tweet!

Disclosure: Not a dig, just an attempt to lighten the mood. We’re all friends here.:hi:

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I should have been more careful in posting the thread, agreed, but being used to funny uses of English as a resident of a third-world non-English speaking country

  1. this lapse didn't even cross my mind, and
  2. I couldn't bother less about a fantasy price prediction.

Yet again, the point the tweet made is valid and deserves further thought. Appreciate the deep thoughts some replies provide, going to great lengths, even bringing up the important topic of "velocity" again, which has been dormant in here for quite a while.

Again, apologies, am more careful next time, yet that's no reason to look down on fellow earthlings who might not master one of this beautiful planet's languages perfectly well.

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