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The Case For XRP by Galgitron


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41 minutes ago, grunish said:

Totally agreed. 

I believe the statement that ODL does not impact the price is only valid in the end game when the whole ecosystem is fully loaded and balanced. Until then, however, increased utility must lead to increased demand.

But for now, we have to wait for the moment that the increase in demand > 1bnXRP/month, because then the ecosystem has to go to the market.

I totally agree but with the huge supply of XRP I`m still in doubt that the demand will overcome supply anytime soon. Maybe it will take 20 years, who knows.

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35 minutes ago, grunish said:

Totally agreed. 

I believe the statement that ODL does not impact the price is only valid in the end game when the whole ecosystem is fully loaded and balanced. Until then, however, increased utility must lead to increased demand.

But for now, we have to wait for the moment that the increase in demand > 1bnXRP/month, because then the ecosystem has to go to the market.

The idea of ODL is going to market and buy there. IIRC Ripple is not selling directly anymore. Can't say anything about the contracts they have to incentivize (potential) partners though.

I do hope we don't need that 1bn XRP /month to be sold out or we're in for a decade :) but yeah, who knows.

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5 minutes ago, Andy_79 said:

I totally agree but with the huge supply of XRP I`m still in doubt that the demand will overcome supply anytime soon. Maybe it will take 20 years, who knows.

That's one of the points on which I'm a bit clueless on what to think about it too. At this rate it'll take a very long time to get these reserves on the market, although the demand could ramp up "quickly". Then again, Ripple is in no way obliged to sell at a certain rate. They could just keep it for 50 years. I also believe they said it's not their goal to sell all XRP in escrow.

Another idea is that some of that XRP might already be allocated in a contract (this is pure speculation) until there's decent custody solutions/...

Anyway, I do feel Ripple can only benefit from a higher value of XRP (especially as Ripple and some employees hold so much of it). So I don't see why they would just dump it. We'll have to see how it unfolds I guess.

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5 minutes ago, SquaryBone said:

That's one of the points on which I'm a bit clueless on what to think about it too. At this rate it'll take a very long time to get these reserves on the market, although the demand could ramp up "quickly". Then again, Ripple is in no way obliged to sell at a certain rate. They could just keep it for 50 years. I also believe they said it's not their goal to sell all XRP in escrow.

Another idea is that some of that XRP might already be allocated in a contract (this is pure speculation) until there's decent custody solutions/...

Anyway, I do feel Ripple can only benefit from a higher value of XRP (especially as Ripple and some employees hold so much of it). So I don't see why they would just dump it. We'll have to see how it unfolds I guess.

This is why I`m not only invested in XRP. In 2017 I thought it was the only crypto to invest but in the last few months I stopped investing in XRP and looked for other projects too.

 

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In order for ODL to work well the price has to be higher than 20 cents.  It has to be at least many multiples higher. Makers/takers can't be transferring millions of xrp to move hundreds of thousands of dollars.  That is not ODL working well. 

The specific mechanism by which the price will march up in order to accomodate an ODL which desires to function well is somewhat beyond me.  I believe Bob Way indicated a patent which can be applied to that problem? 

Regardless, if all the constituent variables for ODL are in place, and parts of the globe ready to use it, it's hard to believe the price won't be moved up by some means, whether that's artificially, or via some form of manipulation, not to mention possibly speculation prior.  A rising speculative market to me seems far more likely prior to ODL/utility being in place anytime soon. That could change price for XRP right there. 

All depends on how much liquidity flows into the crypto market as economies start to suffer. Liquidity leads as we have seen, and the crypto market has seen a lot of liquidity taken out over the past few years.  That is slowly starting to come back in.  But may still be awhile off.

I am of the strong opinion that "risk on" happens exactly once liquidity evaporates from economies (as opposed to just markets).  And we are beginning to see that now. 

I know there are some here who don't see it this way, but I disagree based upon prior recesssion cycles.  At economic bottoms 'risk on' is the place where money travels time and time again.  There's little yield anywhere else.

I would expect the same for this new, planned, and burgeoning market.  Keep in mind the USA is a laggard as far as economies which are struggling.  The  rest of the world is having immense banking/economic troubles now.  And the banking industry in the US is being propped up every evening by the Federal Reserve throwing money into the system.  Eventually liquidity problems will beset the US as well, and in my view before not too long.  You'd never know by just looking at the stock market.

To the point of the thread the exact mechanism, if any, by which ODL creates a higher price for XRP is yet to be explanined clearly I believe, or at least bc my lack of neurons prohibits me from understanding this mechanism. 

My point here is to say there does not have to be some mathematical mechanism which increase XRP price necesarily.  Other forces are at work in markets.  Many other forces and variables which move markets in wildly opposing ways. This is by no means a complete answer, but a partial one, I know. 

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4 hours ago, SquaryBone said:

The idea of ODL is going to market and buy there. IIRC Ripple is not selling directly anymore. Can't say anything about the contracts they have to incentivize (potential) partners though.

I do hope we don't need that 1bn XRP /month to be sold out or we're in for a decade :) but yeah, who knows.

Actually I meant increase in demand for ecosystem growth. If more players want to be part of the game, they can get their XRP OTC from Ripple, right? Thereby not influencing market price. OTC sales are already in 100s of millions? (I don't have the numbers here). And we're only just at the beginning of ecosystem development. My guess will be not waiting for a decade but trust in the network effect (or gravity like galgitron mentioned).

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I enjoy Galgitron: This article is too long and feels repetitive, but I agree with almost everything he writes.  I am 100% XRP for the same reasons Galgitron cites.  The falling price does not bother me, it simply means I am able to buy more tokens with less money.

Edited by Julian_Williams
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"The gravity center for Bitcoin, for example, is located nearly at zero, because it truly has no value. The price doesn't reflect that because speculators are so confused by the optimistic Bitcoin propaganda campaigns, the widespread promulgation and seemingly deep integration into everything (except you still can't buy a coffee with it 10 years on), that it's easy for the whales to sustain a fake price, literally, a Ponzi. The whales desperately push and pull on the price to try to oppose the value gravity, but any attempt to defy gravity COSTS MONEY, either by the sucker investors continuing to finance the Ponzi, or out of the whales' pockets." 

 

giphy (15).gif

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On 1/10/2020 at 4:35 AM, Tinyaccount said:

  But since the buy and the sell are in totally different exchanges (admittedly indirectly connected by complicated arbitrage) then it’s clearly incorrect to make that statement.  Arbitrage and other third order effects may mean it’s got the correct outcome,  but the argument is specious.  The transaction in total is symmetrical but the components are asymmetric and the buy happens first...  which may be the significant factor.

I like all Tiny has written, especially the above which for me has always been the critical weakness in the argument that ODL transactions will not increase price.  ODL will make XRP slosh around the world accumulating in the wrong places and creating local shortages.  In the  end XRP sold for dollars  and bought in Renminbi have to be redeemed by a buy back in dollars (although not always through a direct route, the Chinese might use the XRP to purchase food from Africa, and America restock from Africa).

It is the slowing down of the completion of the cycle between the buy and the return of the XRP back to the place of origin of the buy order that takes the XRP out of the system and causes shortages that will push price up, (I am guessing it will also push the price of reserve currencies down).  On top of ODL will be Market makers and commercial companies carrying sufficient stock, smart contracts, commercial companies holding XRP in wallets and tokenisation arrangements.  Micropayments are also likely to result in pools of XRP building in the system that will be cashed into fiat at intervals.

XRP has a market cap of 9 billion in a market that is measured in tens of trillions.  The big market makers can easily set aside 5 billion to cut the supply in half, like Bitcoin whales do, and they will because they will make huge profits manipulating the value of XRP by creating shortages.

XRP will be more than just ODL, it will be an asset and currency.  Small companies selling directly to customers across the world (like mine) will be offering the option of using digital currency on my e-commerce site, and XRP is the obvious currency to ask for payment through. 

I do not get this idea that somehow the price of XRP will languish when it is adopted as a primary bridging currency in cross border trade.  In fact I am worried by the opposite effect, the more it gets adopted the more it will be hoarded as an investment tool rather than being left on the market to be used to carry money across borders. Once hoarding begins the cycle of hoarding increasing value through demand will create a bubble which in my opinion will be unstoppable.  Think tulips.

Edited by Julian_Williams
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31 minutes ago, Julian_Williams said:

Once hoarding begins the cycle of hoarding increasing value through demand will create a bubble which in my opinion will be unstoppable.  Think tulips.

Tulips is a bad comparaison imho ( for multiple reasons), I do consider XRP more like oil ( gasoline) or containers.  If, big if, it will be utilised on a big scale,  any ( big) friction between supply and demand will be smoothened out by markets ( marketliquidity will be much, much higher than crypto is atm:  meaning one can sell/buy substantial amounts without moving the price too much).  At what price will XRP reach an equilibrium? Who knows? I see no economic principle that makes a price of $ 0.10 nor $ 10 impossible for enough market liquidity to serve worldwide utilisation.  Note: there’s no real connection between the global market potential and the market cap of an individual stock, DA or any other asset ( is the price of a steel container related to the value of all goods moved by containers? Maybe very very loosely). 

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9 minutes ago, Ripple-Stiltskin said:

Tulips is a bad comparaison imho ( for multiple reasons), I do consider XRP more like oil ( gasoline) or containers.  If, big if, it will be utilised on a big scale,  any ( big) friction between supply and demand will be smoothened out by markets ( marketliquidity will be much, much higher than crypto is atm:  meaning one can sell/buy substantial amounts without moving the price too much).  At what price will XRP reach an equilibrium? Who knows? I see no economic principle that makes a price of $ 0.10 nor $ 10 impossible for enough market liquidity to serve worldwide utilisation.  Note: there’s no real connection between the global market potential and the market cap of an individual stock, DA or any other asset ( is the price of a steel container related to the value of all goods moved by containers? Maybe very very loosely). 

I know from previous posts that you have a high knowledge about how money works.

I agree the big scale is a big if, although 5% of cross border payments would be trillions of cross border payments, so even 1% would surely count as big scale compared with now.

When you have a market cap of 9 billion and liquidity of trillions, someone somewhere is going to notice and buy up stock to artificially manipulate the prices higher?

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8 minutes ago, Julian_Williams said:

When you have a market cap of 9 billion and liquidity of trillions, someone somewhere is going to notice and buy up stock to artificially manipulate the prices higher?

For the record: I’m counting / gambling / hoping on a rise of XRP’s price purely by retail or professional speculation. 

Once utility kicks in on a big scale ( agreed, even 5% marketshare would be big) and price will gravitate towards utility value like Galgitron calls it, I’m not so sure of a very high price for XRP.  So I’m hoping for an irrational speculative anticipation of utility for the price to rise ( please at least one more time, lol). 

A container costs a couple of thousand dollar, but can carry millions of value ( trillions if stocked up with daimonds or gold bars), so no real correlation there. Market Liquidity by definition is the (non-) ability to manipulate prices> high market liquidity = price doesn’t move much when big amounts are bought/sold. 

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59 minutes ago, Ripple-Stiltskin said:

For the record: I’m counting / gambling / hoping on a rise of XRP’s price purely by retail or professional speculation. 

Once utility kicks in on a big scale ( agreed, even 5% marketshare would be big) and price will gravitate towards utility value like Galgitron calls it, I’m not so sure of a very high price for XRP.  So I’m hoping for an irrational speculative anticipation of utility for the price to rise ( please at least one more time, lol). 

A container costs a couple of thousand dollar, but can carry millions of value ( trillions if stocked up with daimonds or gold bars), so no real correlation there. Market Liquidity by definition is the (non-) ability to manipulate prices> high market liquidity = price doesn’t move much when big amounts are bought/sold. 

I love you but why so pessimistic on price here?? Market makers would load up, no?? 

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