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Why the price of XRP has almost NOTHING to do with utility


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@Worldcryptoboss Do you understand how XRP works as a bridge currency?  If not allow me to explain.  Say you have $1,000,000 in a bank in New York and you want to send it to  your friend's bank account in Thailand.  Using xrp your bank would buy $1,000,000 of XRP transfer the xrp the to the Thailand bank which would then sell the XRP for their local currency the Baht.  This transaction should take a few seconds.  if XRP is worth $1,000 each only 1,000 XRP would needed to be bought and sold.  If XRP is worth .01 then 100,000,000 XRP would be needed for the same transaction.  It's harder to find 100,000,000 XRP  - maybe that much xrp isn't even available, when transactions are larger say $1 billion or more this becomes an impossibility because  at .01 all the XRP available is worth less than $400,000,000.  the Higher the value of XRP the more liquidity in the system, liquidity is necessary for xrp to be successful.  

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14 minutes ago, Eric123 said:

@Worldcryptoboss Do you understand how XRP works as a bridge currency?  If not allow me to explain.  Say you have $1,000,000 in a bank in New York and you want to send it to  your friend's bank account in Thailand.  Using xrp your bank would buy $1,000,000 of XRP transfer the xrp the to the Thailand bank which would then sell the XRP for their local currency the Baht.  This transaction should take a few seconds.  if XRP is worth $1,000 each only 1,000 XRP would needed to be bought and sold.  If XRP is worth .01 then 100,000,000 XRP would be needed for the same transaction.  It's harder to find 100,000,000 XRP  - maybe that much xrp isn't even available, when transactions are larger say $1 billion or more this becomes an impossibility because  at .01 all the XRP available is worth less than $400,000,000.  the Higher the value of XRP the more liquidity in the system, liquidity is necessary for xrp to be successful.  

So we're back to the question...what is a "high price" needed for the volume? And what happens to XRP if that price isn't reached? 

Despite the fact that you know, and I know, the utility of XRP, and despite the fact that there are hundreds of institutions who could easily purchase the escrow amounts to use, why is it that the majority of XRP has been going back into escrow?

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23 minutes ago, Worldcryptoboss said:

So we're back to the question...what is a "high price" needed for the volume? And what happens to XRP if that price isn't reached? 

Despite the fact that you know, and I know, the utility of XRP, and despite the fact that there are hundreds of institutions who could easily purchase the escrow amounts to use, why is it that the majority of XRP has been going back into escrow?

Because it's still early in the game and Xrapid isn't even in full scale production. I don't understand how people, including yourself, seem to miss the crawl, walk, run analogy that Brad has used on several occasions. Are people really so wrapped up in today's world of instantaneous gratification that they can't see the work necessary, over a significant period of time, to produce meanigful results? It's not just smarts that gets people through all the schooling and training to earn an M.D. degree, it's more persistence than anything else - that's my analogy. Hang in there people, the Ripple team is working on laying the groundwork that will ultimately get the results everyone is so impatient about - just saying.....

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54 minutes ago, Worldcryptoboss said:

I believe that XRP, more than any other coin, has the best use case, and the best likelihood of international adoption. 

I respect your opinion but I'm not sure I follow the logic.   Why do you think it has the best likelihood of adoption?  Is it not because XRP has utility (fast, cheap etc. ) within the x-border use case? Seems like utility will influence demand.

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I think that the utility itself maybe will have a minor impact ( 100% marketshare of Swift equals 5 trillion of CB payments a day equals a mathematical price of XRP of $ 0.00145 given 40 billion in circulation and settlement in 1 second > do the math!) but the fact that XRP is utilized will have a huge impact ( speculation / storage / scarcety / time-friction etc etc). 

Edited by Ripple-Stiltskin
Scarcety ? scar city? Lol.
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1 hour ago, Worldcryptoboss said:

But based on THE HARD DATA looking at cryptocurrency trends over the past DECADE, it's quite obvious that the utility of cryptocurrencies has had very little to do with their price.

As I pointed out in my earlier post (that you seem to have ignored....)  that is irrelevant to this situation.

 XRapid moving volume through public exchanges is something that is totally new to the world.  It has never been done before and no one can say with certainty what effects it will have.

For you to claim anything based on your "HARD DATA" is completely specious.  That failure completely undermines your whole point,  and this whole thread.

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32 minutes ago, Ripple-Stiltskin said:

I think that the utility itself maybe will have a minor impact ( 100% marketshare of Swift equals 5 trillion of CB payments a day equals a mathematical price of XRP of $ 0.00145 given 40 billion in circulation and settlement in 1 second > do the math!) but the fact that XRP is utilized will have a huge impact ( speculation / storage / scarcety / time-friction etc etc). 

Is that some sort of semantic riddle? lol

Automatic infraction for changing utility into a verb.

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On 8/21/2018 at 1:19 AM, Worldcryptoboss said:

I just don't think that these [Ripple] products innovation has had, or will have, a significant impact on the price. 

 

On 8/21/2018 at 1:41 AM, Worldcryptoboss said:

I think even IF banks do adopt some sort of Ripple protocol or use their systems en mass, it would still not have a major impact on the price of XRP

 

1 hour ago, Worldcryptoboss said:

If I'm bothering you perhaps you should re read, very carefully, what I've said.

Also if I'm bothering you, I don't care :P 

I did read it - it wasn't as insightful and earth-shattering as you appear to think it was. When you overreach with your opinions as per the first two quotes above, I stop listening. If you'd contained your opinion to "BTC is the primary driver of price for the time being", I'd have agreed with you. 

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2 hours ago, Worldcryptoboss said:

Firstly, I'm not conflating the two. However, it is undeniable that THE biggest predictor of the price of XRP, and other Cryptocurrencies, is how well (or badly) Bitcoin is doing.While this MAY change in the medium to long term, it's highly unlikely it will change in the short term. 

Secondly, the success of XRP is not necessarily tied only to it's price

Go away.  You're a new born baby interested only in the short-term price of XRP - how utterly tedious.

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9 minutes ago, Ripple-Stiltskin said:

You’ll figure it out. 

It will be utilized because of it's utility. 

To the OP, demand via users or speculators or hedging etc. is all based on utility or potential utility.   Sure there is correlation in the market with BTC but that will decrease with real-world adoption.

Ultimately, utility will affect price both directly and indirectly as @Ripple-Stiltskin pointed out.

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You all can argue with the OP about XRP utility, but I am going to ding him on this comment:

On 8/20/2018 at 7:15 AM, Worldcryptoboss said:

 

Are gold and other precious metals useful? Sure. However, they sure aren't used as a regular, day to day basis for most people. Instead, gold has become a store of value.

Because you made this statement, I know you have no idea what you are talking about (both XRP and PMs)

Day to day use of PMs

Use a mirror everyday? - Made of silver
Use a cell phone everyday? - Uses gold and silver
Use a computer everyday? - Uses gold and silver
Use a GPS or Google maps everyday? - The satellite that they connect to uses gold and silver
Work in an office building with tinted windows? - that tinting comes from gold and sometimes silver
Watch TV everyday?  - Uses gold and silver
Know anyone with arthritis? - The medicine to treat it contains gold
Use CDs or DVDs? - Uses silver
Wear deodorant? - Uses silver
Wear a watch? - Uses silver
Use a digital camera? - Uses gold and silver
Fly on a plane? - Uses gold and silver
Drive a car?  - Uses gold and silver
Use LED lights? - Uses silver
Ever see a doctor or go to the hospital?  - Doctor lab coats have silver in them
Drink bottled water? - Filtered with silver
Use laundry detergent? - contains silver
Use anything that is plastic? - Contains silver
Use solar panels? - make out of silver
 

There are a ton of ways PMs are used in everyday life.  Do some research before spouting facts next time....
 

Edited by IAmATroll
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On August 20, 2018 at 10:15 AM, Worldcryptoboss said:

It's crazy isn't it? These crazy fluctuations in XRP (and other cryptocurrencies)

AS much as I, like many other people love the utility of XRP, and how it can change the world of finance, this isn't the biggest reason for our interest.

It's about making money. 

Just like others, I invested and bought a few Zerps because I saw an opportunity to make money. Yes, Xrapid, Xcurrent and all these other technologies might change the banking and finance landscape as we know it, but truthfully, we saw an opportunity to cash in on the rising price of XRP. 

For those like me, let me let you in on a little secret:

The price of XRP has almost NOTHING to do with it's utility. 

That's right. Even though there are a number of new ways in which the Ripple network is bringing innovation, none of these have or will have a major impact on the price of XRP.

That isn't to say that they have NO effect on the prices, but to say that the major driving force of any past, current and future XRP prices is something simple.

Supply and demand of the overall crypto market, especially Bitcoin

That's it. How "hyped" or "dehyped" the overall crypto market is the single largest factor on the price of XRP.

Like ALL other crytocurrencies, XRP's value is largely based on Bitcoin's fortunes. The price of Bitcoin, which is by far the largest cryptocurrency, is the biggest driving factor. 

Bitcoin goes up? In general, all the other coins rise in value.

Bitcoin down? All the other currencies sink.

Of course, this doesn't happen in a "straight line" - but when Bitcoin prices go up, this means that the "hype" for crypto, in general, increases. Which leads to more people looking at other, cheaper options, which means that there is a lot more room for growth and higher likelihood of larger price increases as investors look for a "cheaper" option.

When Bitcoin prices go down, we tend to see the same trend - other crypto are hit even harder as investors who came in at the peak panic as they begin rapidly losing their investment as prices plunge, which has a ripple effect (haha).

I like to compare the crypto market to gold, and other precious metals valuation

Are gold and other precious metals useful? Sure. However, they sure aren't used as a regular, day to day basis for most people. Instead, gold has become a store of value. Gold's value increases simply because OTHER people want another store of value in case of issues with local currency, such as deflation. The price of gold is generally stable worldwide, similar to crypto.

Despite the fact that the vast majority of the world's population have little utility for gold, and do not own any gold, the price of gold has risen significantly within the past 25 years - From $273 in 200 to $1664 in 2012. And although there have been some dips, the price of gold has increased steadily almost yearly

What does this mean 

It means simply that you should be paying less attention (please note I didn't say NO attention) to the developments coming out of the Ripplesphere, and more attention to the sentiment and feeling on the ground of cryptocurrency, especially Bitcoin.

 

Anyone agree/disagrees?

That's pretty much it

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1 hour ago, 2ndtimearound said:

Go away.  You're a new born baby interested only in the short-term price of XRP - how utterly tedious.

And you're a xrp fanboy that can't listen to any argument that doesn't support his narrative.

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