Jump to content
XRPwatch

Market cap, Xrapid and price

Recommended Posts

Hi Guys

I'm fairy new to Crypto since I FOMO'd in last December, so my understanding is fairly basic. I had always thought that the price of a coin was only determined by it's market cap and the amount in circulation. But I have seen a few posts on here that seem to say Xrapid can increase the price of XRP without the market cap increasing. This is blowing my mind, so can someone help me out and explain how this works, or point me to a good source that explains it? Sorry if this has been done before.

Share this post


Link to post
Share on other sites
On 9/6/2018 at 12:49 PM, XRPwatch said:

I had always thought that the price of a coin was only determined by it's market cap and the amount in circulation. But I have seen a few posts on here that seem to say Xrapid can increase the price of XRP without the market cap increasing

It’s very simple:

Market Cap = price multiplied by #of coins in circulation

So if prices rises, for whatever reason or cause, market cap rises. By definition. 

 

Share this post


Link to post
Share on other sites

XRP is extremely fast and extremely cheap, we do not even know yet what it might be used for in the future. Increased liquidity makes it even better as a tool for both bridging other currencies and settling payments. 100 million XRPs ever to be created, one XRP can be divided into 1 million Drops. A small amount of Drops are burnt out of existence for every transaction.

William Stanley Jevons formulated an economic theory back in 1865 in his book "The coal question" the theory has been labeled Jevons Paradox:

From Wikipedia:

Jevons observed that England's consumption of coal soared after James Watt introduced the Watt steam engine, which greatly improved the efficiency of the coal-fired steam engine from Thomas Newcomen's earlier design. Watt's innovations made coal a more cost-effective power source, leading to the increased use of the steam engine in a wide range of industries. This in turn increased total coal consumption, even as the amount of coal required for any particular application fell. Jevons argued that improvements in fuel efficiency tend to increase (rather than decrease) fuel use, writing: "It is a confusion of ideas to suppose that the economical use of fuel is equivalent to diminished consumption. The very contrary is the truth."

The issue has been re-examined by modern economists studying consumption rebound effects from improved energy efficiency. In addition to reducing the amount needed for a given use, improved efficiency also lowers the relative cost of using a resource, which increases the quantity demanded. This counteracts (to some extent) the reduction in use from improved efficiency. Additionally, improved efficiency accelerates economic growth, further increasing the demand for resources. The Jevons paradox occurs when the effect from increased demand predominates, and improved efficiency increases the speed at which resources are used.

If the internet of value becomes a reality, Jevons Paradox will probably hit the assets that are adopted, and XRP is in a very good position for being among the most used.

Edited by mandelbaum

Share this post


Link to post
Share on other sites
1 hour ago, mandelbaum said:

If the internet of value becomes a reality, Jevons Paradox will probably hit the assets that are adopted,

Because of a lifelong love of looking at the stars I have always despaired at the way our night sky has been steadily brightening and thousands of stars have disappeared to all but a few folk in out of the way places.  The glory of the Milky Way is a real surprise to many when they see it fully revealed in a truly dark sky.

There was a period, a decade or two ago, where we thought that the sky might actually darken again as higher energy costs started to make all participants get 'smarter' about their lighting, and use less powerful lights in more directed-to-target ways.

Indeed I think there was a bit of a improvement for a short while.  But more efficient LED lights came on the scene and now everyone can afford to light up vast areas for less cost.  The result has been an INCREASE in light pollution even as lighting became more targeted and efficient.  A classic case of Jevons Paradox.

Its a real effect folks,  and it would be astounding if it doesn't apply to the massive paradigm change of an Internet of Value.

Share this post


Link to post
Share on other sites
On 9/6/2018 at 11:49 AM, XRPwatch said:

Hi Guys

I'm fairy new to Crypto since I FOMO'd in last December, so my understanding is fairly basic. I had always thought that the price of a coin was only determined by it's market cap and the amount in circulation. But I have seen a few posts on here that seem to say Xrapid can increase the price of XRP without the market cap increasing. This is blowing my mind, so can someone help me out and explain how this works, or point me to a good source that explains it? Sorry if this has been done before.

If the price moves, the market cap moves as market cap is derived from circulating supply multiplied by price.

Also, market cap is not a representation of money invested. Theoretically, there could be a market cap higher than all of the money in the world or a market cap of zero with millions of bag holders.

Share this post


Link to post
Share on other sites
On 9/8/2018 at 1:33 PM, Ripple-Stiltskin said:

I really like how OP is interacting with all posters answering his question. 

Sorry if any offence was caused, I had to deal with a family crisis and have not been back on the board for a while.

Thanks to everyone that responded. I still don't understand it to be honest. I read somewhere (wish I could remember where) that the amount that is burned per transaction is so small that it would take 250 years to burn through, so the price increase would take a long time to happen. Because Xrapid doesn't hold XRP it just uses it for a couple of seconds I still don't see where we get to the huge increases being talked about. I'm hoping I'm wrong of course, and I probably am ?

Share this post


Link to post
Share on other sites
Guest

Sigh..

Bank A has 500,000,000 XRP (given, or bought at an extremely low price from Ripple) that they initially plan to use for remittance. Notice, that each XRP is worth about .28c a piece, so that 500M XRP is roughly worth (140,000,000$ USD) So, if Bank A has a lot of customers to use remittances, they only have enough XRP to send 140M$ initially. The more demand and remittance, the more that bank will have to purchase to send out and meet customer expectations.

You mix this demand across hundreds of banks, and you have a XRP ecosystem that is now booming because of the need for XRP.

Share this post


Link to post
Share on other sites
On 9/14/2018 at 10:01 PM, Mr_McFearson said:

Sigh..

Bank A has 500,000,000 XRP (given, or bought at an extremely low price from Ripple) that they initially plan to use for remittance. Notice, that each XRP is worth about .28c a piece, so that 500M XRP is roughly worth (140,000,000$ USD) So, if Bank A has a lot of customers to use remittances, they only have enough XRP to send 140M$ initially. The more demand and remittance, the more that bank will have to purchase to send out and meet customer expectations.

You mix this demand across hundreds of banks, and you have a XRP ecosystem that is now booming because of the need for XRP.

Thanks @Mr_McFearson this has helped me to understand now. ?

Share this post


Link to post
Share on other sites
On 9/7/2018 at 3:04 PM, Ripple-Stiltskin said:
On 9/6/2018 at 3:49 AM, XRPwatch said:

I had always thought that the price of a coin was only determined by it's market cap and the amount in circulation. But I have seen a few posts on here that seem to say Xrapid can increase the price of XRP without the market cap increasing

It’s very simple:

Market Cap = price multiplied by #of coins in circulation

So if prices rises, for whatever reason or cause, market cap rises. By definition. 

...and coins in circulation has been steadily increasing - I've been taking screen shots as the # has gone up: 08/28/2018, 09/15/2018, 09/28/2018, 10/01/2018, 10/11/2018, 11/15/2018,  11/19/2018, 12/07/2018, 12/19/2018 (slight decrease in supply) and back up today 01/10/2019, and 01/26/2019...

08/28/2018

image.thumb.png.a8cd574c3970d17d0c24f084ca1b2718.png

09/15/2018

image.thumb.png.e1828e374fbc01fa4cdea0332b5d0766.png

09/28/2018

image.thumb.png.f53a03814d776175e8bc5e7c77f915df.png

10/01/2018

image.thumb.png.78fe5686272e55b37c5fe49e36f4fea0.png

10/11/2018

image.thumb.png.7e81ea0434c65aa28856cf0bcfe18736.png

10/25/2018

image.thumb.png.2be8a3490e237ec6d08ce99eaa2cee1f.png

Coins in circulation still going up...

11/15/2018

image.thumb.png.52456ae2736ea518b01126017a9164a4.png

Faster now...

11/19/2018

image.thumb.png.2ef88e0e1b0ff3664d5407267b1de7e6.png

12/07/2018

...another small move up - coins in circulation

image.thumb.png.4027d7f5ee2b57a38203e872fb5be39c.png

12/19/2018

And now circulating supply has slightly decreased...

image.thumb.png.6d69401c26294058a80599a2f7265d99.png

01/10/2019

Circulating supply up again..

 

01/26/2019

image.thumb.png.5b6f313d53b66884ed62467cf9977e27.png

 

 

Edited by GiddyUp
today's number

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×
×
  • Create New...