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David Schwartz twitter comment clarification.

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Maybe, but why would ripple want to sell its 50 billion XRP for $30 billion if it can sell the same XRP for $300 billion, or $3 trilllion?

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Posted (edited)

"When xRapid is used, the XRP is bought on an exchange. It's then immediately sold on another exchange. So there's no net increase in demand but there's no net increase in supply either."

Joel Katz. (as copied from twitter).

As the conversation is taking place on twitter I thought I'd ask for clarification on my own thoughts regarding the explanation as it may or may not affect price. wil

It is to my understanding that Xrapid inherently will not cause an increase in price due to the fact that the buy order will equal the sell order, however the use of Xrapid will increase price due to the fact that the usage of Xrapid by corporations will cause the scarcity in xrp.

In another way.

Xrapids function= zero increase in xrp demand as it is a zero sum process.

Usage of Xrapid Increases demand on xrp therefore that creates the scarcity and possible/probable increase in xrp price"

 

X-Rapid participants are able to buy XRP from the escrow/level II markets, and they will also be able to source directly from exchanges. The X-Rapid pathfinding automatically searches for and finds the lowest price on the buy side, and the highest on the sell, hence an organic increase in price with every transaction-

 

As @mDuo13 Posted January 23, 2018:

xRapid uses public exchanges that trade XRP to source liquidity from speculators and other members of the public who're trading cryptocurrencies for fiat and vice-versa. It pairs trades at different exchanges in real time and transfers the XRP between exchanges. It is, in a sense, a really polished standard interface to the exchanges' own APIs.

It automates the following process, which one can do (slower, thereby less profitably) by hand:

Deposit USD at (source exchange)

Trade USD for XRP at (source exchange)

Withdraw XRP from (source exchange), deposit at (destination exchange)

Trade XRP for MXN at (destination exchange)

Withdraw MXN from (destination exchange), send to customer

 

And yes, I've heard that agreements are in place to prevent profit taking for those that source from Level II, whether or not that's true, I dunno-

Edited by PhiGuy

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5 hours ago, Benchmark said:

Well then you haven't paid much attention. I've seen dozens of ways that may increase the price in the past year.

"Seen", "may" , and actual price increase are two different things

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I think David's remark maybe correct but it is a bit of a red herring.

Lots of XRapid transactions going back and forth will net each other off, I can see they might not really affect price much but profits will have been taken and even those would surely have an upward push?  As soon as the transactions are asymmetrical the velocity has to slow down and the liquidity become like treacle.  This in effect traps XRP in the system and reduces supply, and those transactions will push the price up a lot.  Think of smart contracts holding XRP up for weeks at a time. 

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Posted (edited)

So what this boils down to: Bitcoin is the utility and XRP becomes the store of value. I totally didn't see this coming. Haha! No wonder Brad Garlinghouse took a different stance towards BTC.

Edited by Scout

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7 hours ago, whiteout said:

Maybe, but why would ripple want to sell its 50 billion XRP for $30 billion if it can sell the same XRP for $300 billion, or $3 trilllion?

Exactly. Ripple shareholders would weigh in.

2 hours ago, Scout said:

So what this boils down to: Bitcoin is the utility and XRP becomes the store of value. I totally didn't see this coming. Haha! No wonder Brad Garlinghouse took a different stance towards BTC.

 

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Posted (edited)

I read the tweet and it was confusing to me plus it actually strengthen my confusion about the price increase abilities.

I have to say I am not well versed in the ins and outs of economics. however, assuming OTC sales will continue to occour for years and years and are used by all the organizations we OG thought will drive price up when they decide to use xrp, then it seems to me like the speculative phase will continue forever. i cant see how utility will up the price directly, maybe indirectly, which is not what most people though to begin with...

I dont really care about a person thinking XRP is great and wanting to invest in it thus driving the price upwards, I care about large institues with massive amount of transactions using XRP as a utility and directly driving its price up, which does not seem to be the case due to OTC. in this case, one might as well put money on any crypto asset that is well known (like BTC) as it looks like a good brand name will take you higher than hundreds of signed contracts with the monsters of the industry...

so, still confused, and mostly disappointed.

disclamer: was here before the 2017 bull run. like mentioned low undertanding of markets inner works.

Edited by gkatz

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5 hours ago, gkatz said:

I care about large institues with massive amount of transactions using XRP as a utility and directly driving its price up, which does not seem to be the case due to OTC.

If utility occurs in large volumes then the very essence of xrapid is PUBLIC exchanges.  The volume won’t be OTC,  it will be on the public order book.  

I’m like you in that I don’t know much about economic theory,  but everyone I’ve ever read seems to think that large volume will cause upward price pressure.  That certainly seems to be the case in the market so far.  The only time it’s not is when a dump is on and they seem to be deliberately triggered.  That can’t happen as easily once volume dwarfs the whale capacities.

If utility at scale happens everyone seems in agreement that price will be commensurately higher.

Lastly OTC...   right now the demand per month is less than the escrow release.  That shows a trend that indicates it might change in the next year or so...   that too will trigger higher prices because of unmet demand.

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Posted (edited)

Well there's two schools of thought. One Joel Katz's view which XRP has no value or BearableGuy123 where the value = 589+.  If we use a shitcoin like BTC as an example for some insane reason it manages to have an imaginary value associated with it which climbs even though BTC has no real purpose or value except for the fact it's supply is scarce. Eventually XRP through adoption will be the same, hence it too will have speculative value which people will say the value is driven by utility as the big exchanges will need to hoard large amounts for transferring value. Definitely this won't happen over night and this will be an investment of wits.

Should XRP ever get superceided by a newer tech that could be devastating for the long term holders expecting to see a great imaginary value associated with XRP which seems to have an infinite supply.

But there is hope, the more volume the more burning and eventually the supply will dwindle making it a rare commodity like BTC and the value will Increase.

 

Edited by Scout

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11 hours ago, Julian_Williams said:

Think of smart contracts holding XRP up for weeks at a time. 

or billions for years.

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20 hours ago, peanut56 said:

"When xRapid is used, the XRP is bought on an exchange. It's then immediately sold on another exchange. So there's no net increase in demand but there's no net increase in supply either."

Joel Katz. (as copied from twitter).

As the conversation is taking place on twitter I thought I'd ask for clarification on my own thoughts regarding the explanation as it may or may not affect price. wil

It is to my understanding that Xrapid inherently will not cause an increase in price due to the fact that the buy order will equal the sell order, however the use of Xrapid will increase price due to the fact that the usage of Xrapid by corporations will cause the scarcity in xrp.

In another way.

Xrapids function= zero increase in xrp demand as it is a zero sum process.

Usage of Xrapid Increases demand on xrp therefore that creates the scarcity and possible/probable increase in xrp price

Bob Way's first post on this page: 

 

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1 hour ago, Scout said:

 

But there is hope, the more volume the more burning and eventually the supply will dwindle making it a rare commodity like BTC and the value will Increase.

 

from what I understand about the burning of XRP I wouldnt count on it. we are talking fractions of an XRP here

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19 hours ago, MegaNerd said:

In other words, Ripple may become extremely successful but XRP investors may never see a massive price growth.

My feelings exactly. 

 

I have held XRP for several years however David's comments have left me very dishearten, this is the reason I felt the need to join and post today, previously I have just read from the side lines.

 

In effect what David said was XRP is the body that transfers the value, because XRP settles so quickly, and there are more than sufficient XRP available, especially when it seems Libra and other project will take a proportion of the market Ripple were targeting, Xrapid will not increase the value of XRP.

 

XRP has changed in my view. I now view XRP like the ocean. Ships travel internationally using the ocean, without the ocean they cannot reach their destinations, but the ocean itself holds no value, why, because there is plenty of ocean to go around, bit like the supply of XRP. The money is made in docking the ships which is essentially the fee paid to Ripple to get setup on Xrapid. 

 

I welcome any comments explaining why I am wrong, as I still want to believe in XRP but really struggling. I still don't think I can actually bring myself to sell it, in other words I will go down with this ship. 

 

I look forward to hearing, hopefully, some opposing views and reasons why. Or even better if Bob Way, who seems the have gone distantly quite could come and explain why I am wrong? That would be great!!!

 

Regards

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