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eXtRaPolate

Deflationary Value of XRP

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I remembered reading a previous discussion about the naturally constructed deflationary value of XRP a while ago on this site.

@RDS stated on 10/13/2016:

"Small amount of xrp gets destroyed with each transaction and its expected that as demand and transaction will increase that destruction rate will increase which will cause the same effect as inflation because of slowly decreasing supply"

I was wondering where this decreasing supply can be tracked? I have used multiple trade platforms and they always have the "current supply" listed in close relation to the graphs.

CryptoCompare.com currently has the volume at 99,991,850,794.0 XRP. 

CoinMarketCap.com currently has the volume at 99,991,708,587 XRP.

I was under the assumption that this would indicate how many XRP had been destroyed, but the volume on the CryptoCompare site recently increased. 

Shouldn't we be seeing a decrease in the current supply at this point with financial institutions beginning to use xRapid?

I invested quite some time ago, and I feel like this is a question that I should have already known the answer to. Anything helps.

Thanks!

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That is the amount of remaining XRP’s (at start it was 100 billion).

I would use https://xrpcharts.ripple.com/#/

as reference for that. You could see the value of Total (remaining) XRP’s ticking down (normally very slowly).

(Why you saw a higher value  at some site, I imagine it is a problem with that site, or site doesn’t update/ask for current value very often, or you are looking at some old value that was cached by your webbrowser?)

Edited by takida

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It is a cost per transaction (every ledger handles multiple transactions). When you see XRP’s ”ticket down” at xrpcharts, a new ledger was performed (with some transactions performed). A fraction of an XRP was burned for each of those transactions. The cost can also differ as an antispam protection, please see:

https://developers.ripple.com/transaction-cost.html

 

Edited by takida

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12 hours ago, eXtRaPolate said:

Could anyone clarify the specifics on the deflationary value? 

I used https://xrpcharts.ripple.com/#/ per @takida's recommendation and I can see that the counter is ticking down at 1/100 of an XRP at a time.

I thought that 1 XRP was burned for every 2 transactions on the XRP ledger... am I wrong on this?

Very wrong.

Every transaction has a fee. That fee is decided by the person submitting the transaction.  Usually it is around 0.0000015 XRP, but often people think using higher prices will help speed up the tx. But 0.00015 is more than enough for a 5000000XRP tx to go through in 3 seconds.

Also there have been people who have had buggy code or fat finger, burning up to thousands of XRP at a time. I think the biggest fee I saw was 150000 XRP. It was a mistake and the user was contacted and they fixed their code.

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I think pinning any hopes in price rises on the deflation of XRP is futile. In this area what is more likely to drive the price is scarcity. In the news today it is reported that potentially a billion XRP might be lost after an XRP whale died without giving anyone else access to his private keys. Once reliable metrics are available for how much crypto has been lost, I think the circulating supply numbers for many of the older coins will decrease fairly significantly, particularly BTC but also potentially XRP. 

 

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Scarcity is no joke in conventional numismatics - hoards found, hoards lost, can transform a market rapidly. Discoveries of undocumented collections and thefts that are never traced are pretty common. As the world goes cashless, the historical significance of coinage could see a renaissance (or serve briefly as a piece de resistance)

These are fun bits:

https://money.howstuffworks.com/how-much-money-accidentally-throw-away.htm
 

Quote

 

Consider that by various estimates, between 66 and 74 percent of the pennies produced by the U.S. Mint get into the hands of consumers and then vanish from circulation [source: Elder]. Since the U.S. Mint produced $4.16 billion dollars' worth of pennies in 2014, that means that as much as $3.08 billion of them will end up dropped on the sidewalk, slipping between the couch cushions or landing wherever else misplaced coins end up [source: U.S. Mint].

A 2012 online study by a British insurance company, esure, concluded that the average person misplaces an average of 198,743 items over the course of a lifetime, and spends the equivalent of 230 days looking for them.

 

 

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On 2/2/2019 at 5:27 AM, takida said:

That is the amount of remaining XRP’s (at start it was 100 billion).

I would use https://xrpcharts.ripple.com/#/

as reference for that. You could see the value of Total (remaining) XRP’s ticking down (normally very slowly).

(Why you saw a higher value  at some site, I imagine it is a problem with that site, or site doesn’t update/ask for current value very often, or you are looking at some old value that was cached by your webbrowser?)

There always seems to be discrepancies among various sources....my biggest issues is the variance on volume.  The ISO app called CoinCap has a much lower 24 hour volume report vs CoinMarketCap.com

 

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On 2/2/2019 at 5:16 PM, Seoulite said:

I think pinning any hopes in price rises on the deflation of XRP is futile.

I'm just looking for a better understanding of the deflationary value. I'm not getting my hopes up on how that will affect price. 

Thank you everyone who responded.

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On 2/3/2019 at 12:43 AM, retryW said:

Every transaction has a fee. That fee is decided by the person submitting the transaction.  Usually it is around 0.0000015 XRP, but often people think using higher prices will help speed up the tx. But 0.00015 is more than enough for a 5000000XRP tx to go through in 3 seconds.

My calculator says that at 1,500 transactions per second non-stop (the current max capacity) this would account for 0.7% (700 million XRP) over a period of 100 years.

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