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superavd88

Uncertain Future

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Welcome friend, I too am a bit new here, tho I've lurked about since mid 2017. This is prolly the best site you can find for interacting with others sharing your interests with XRP and related topics :)

There are no simple and obvious answers to the deeper of your questions, both of the technical and human behavioral, but we do all (mostly) share an interest in the answers !

Personally, I'm mostly fascinated by the impact and adoption of these disruptive technologies, both in their impacts on our society and monetary systems.

There are many things to keep in mind, one of those is the fact we are still very early to this arena, and NO ONE can predict the routes which will be taken in the months and years to come.

I will try to add to this thread later, as time permits.

Cheers.

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49 minutes ago, superavd88 said:

I like to compare this to buying something at the store and returning it before you leave the store; their inventory levels are quickly replenished.

I thought that was an interesting analogy of this classic concern, and one that will be a main driver of price in the long run.

What if there are only 5 of the "things" (i.e. XRP) in the store (i.e. an exchange), and an order for 50 come in before you return your 1 thing?

Your return isn't going to help the store in that instance.

That store is going to need a supplier parked outside (i.e. liquidity provider) with a huge truck filled with "things" on hand in order to cope with spikes in demand. That supplier cannot source "things" instantly, so they will need to hoard a lot of them. With a fixed supply, this will cause the base price of "things" to increase. Supply and demand.

Now multiply that up to a vast proportion of people in the world needing these "things" in some capacity or other. There's going to need to be an awful lot of trucks parked around to satisfy demand.

That's what I'm banking on anyway.

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Fair play, the analogy may have been a bit laboured. But when I was first getting my head around all this - as someone that never studied economics - the concept of a liquidity provider as a key ingredient of utility pricing was alien to me, and a little hard to wrap my head around.

I was just hoping to make that easier to understand for the OP, extrapolating from their original perspective.

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11 minutes ago, ObeyTheWafflehouse said:

But I haven't touched on why this is good for price. Well, if the volume is exponentially increasing  through the payment rails, this allows for more Market Makers to make the market. MMs are able to reduce the speak on the ask/bid price of the trade currency, commodity, etc. The more MMs, the more institutions that are holding XRP, not as an investment choice, but because they are able to make a profit from a high volume corridor. 

Thanks Waffle san !

(btw: did you mean "speak" or "spread?")

IIRC I remember DS himself mentioning a max possible value for XRP based on total market penetration on their core use case (remittances and FX) - which could never happen of course, could it ? And for only the one use case, that would be a max of $25 USD.

The point you describe, the MMs and their operational behaviors, absolutely DOES include maintaining an inventory of tokens, with is one of the key leaks of the circulating supply.

We see this in action everyday now, just in the Bitso's trade metrics.

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Your example about a transfer of $216 trillion in a 24-hour period not affecting price assumes all that it all happens in a perfectly even manner. Also, if XRP gains utility it will also become seen as a store of value and a very attractive asset to own, especially for people in countries with unstable governments.

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I have to say....I'm pretty impressed with this forum. Thank you all for your responses. ObeyTheWaffleHouse - pretty good references, I'm on page 3 of the Hi! I'm Bob thread and I can already see a huge difference in content to what I had seen in the past. There are a lot of details I don't have knowledge on and even though it has never been my intention to go deep into this rabbit hole, this kind of response is pretty encouraging. I'll be browsing through these threads and see what I can pick up and comment now and again. I love to speak my mind and question arguments, you learn more from being wrong than from being right so please Julian_Williams by all means, let me have it!

 

"Invert, always invert" - Jacobi

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5 hours ago, superavd88 said:

I don’t consider myself as devoted to XRP as a lot of people who I’ve seen are. For this reason, I haven’t spent countless hours researching about it and might not have an expert knowledge to answer some of my own concerns. I do see potential in what is happening with our financial system and because of that I do have a couple of thousand dollars invested in XRP.

Here are some of my concerns:

Part of the XRP community – My only experience so far has been youtube so I'll talk about what I've seen there. I think it’s great that youtubers are posting information of things that are happening with crypto and XRP, I’ve seen several videos that help me go out and read about some of the events mentioned that I wouldn’t have researched on my own; however, a lot of the listeners and followers are incredibly sensible towards any negative comment or mention about XRP which makes the content in YouTube extremely biased.

Critical thinking is all about listening to different facts and opinions to create your own view and judgment. I think a lot of people either have more than they should invested in XRP or are obsessed with the economic bubble that happened back in 2017 and are expecting for that to happen again in order to get rich quick. Not hearing about the challenges, pitfalls and shortcomings is not good for making educated decisions; promoting crazy valuations make me lose credibility on what some youtubers are posting.

This brings me to my next point:

Actual value – I might not know all the technical aspects of what XRP can and cannot do but I know that in any market things usually end up aligning to their intrinsic value (invisible hand). I can see the utility that we can get with quick and inexpensive fiat transfer and conversion however in any practical scenario for the use of XRP I can’t see the value of the coin being greatly affected. This is due to the current supply and the speed of the transactions. My understanding when listening to Brad Garlinghouse talk about volatility is that the value in XRP would be the ability to buy with any fiat currency and sell it within seconds so that your currency maintains the same worth at the end of the transaction without holding XRP a long period of time due to risk of volatility. Based on that assumption let’s say that the whole process takes 20 seconds to complete, let’s suppose that you have accessibility to transact 24/7 and let’s use these variables:

1 XRP = $ 1 USD

XRP Supply: 50 Billion

This would mean that at that price, XRP would have the potential (In an unrealistic perfect and hypothetical scenario) to transfer $216 trillion dollars in a 24-hour day without affecting demand or supply very much due to the 20 second transaction time. I like to compare this to buying something at the store and returning it before you leave the store; their inventory levels are quickly replenished.

Even though this scenario is not possible it still tells me that the price of XRP does not need to be extremely or very high at all to accommodate a ridiculously immense amount of demand. Based on that, the biggest factor that would influence the price would be the supply availability - XRP being tied to either medium- or long-term investors.

Another aspect would be to assess the fact that XRP has competition with other crypto such as Stellar Lumens which further increases the supply of coins that are available to cover the financial demand, and this consequently dilutes the prices of both assets.

My last concern is this one:

Ripple Accountability – To my understanding Ripple does not have any accountability for the price of XRP as they are both separate entities. In my opinion this feels like a company going public to fund their endeavors with the catch that they are not accountable to their shareholders for the value of their stock. This gives Ripple complete freedom to create new technologies separated from XRP without any concern if that negatively impacts the prices as the profit is ultimately theirs.

As most everyone who has money tied to this,  I want XRP to bloom so that I can profit from my investment. I do have a lot of uncertainty however, and I wish that more of these issues where brought up without any biases or feelings involved to better assess what XRP is worth to me at a personal level (How much of my investment money I want to have tied to this).

You want advice

 

Here's one.

 

 

 

RUN WHILE YOU STILL CAN!

 

 

 

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2 minutes ago, Staigera said:

RUN WHILE YOU STILL CAN!

Many have, which is why it has become a graveyard around here, with only a few bottom dwellers and sewer feeders remaining. lol

Edited by KevClem

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