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Can the value of XRP be "set"?


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Yes of course it can be set. You need to have an entity that has deep enough pockets and that is willing to act a moderator of value in open market.

So if you are fantasizing about say 100$ per xrp, US government could do that hypothetically. It would be senseless from a speculators point of view to try and speculate against XRP in a scenario like this. However Ripple or BoA etc wouldn't have the money to back it up at these extreme levels.

 

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If used as an intermediary unit on the IOV within ILP, couldn't the governments, central banks, and private banks using it to transfer assets agree to a value for each XRP...speculators and traders be damned?

For instance Bank A wants to send 20 billion yuan to Bank B who wants it in dollars. The network "agrees" that each XRP is worth $1000 so Bank A "sends" the at-the-moment equivalent of said-dollars (yuan) through the IOV via ILP and it comes out on the other side as dollars.

In this example, the value of the XRP used is needed in order for the XRP blockchain to record the amount utilized to perform this transaction. It actually wouldn't matter if the value of each was $0.50 or $10,000...you'll either use a lot of them to move your $$ or relatively few of them.

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12 hours ago, drmount said:

If used as an intermediary unit on the IOV within ILP, couldn't the governments, central banks, and private banks using it to transfer assets agree to a value for each XRP...speculators and traders be damned?

For instance Bank A wants to send 20 billion yuan to Bank B who wants it in dollars. The network "agrees" that each XRP is worth $1000 so Bank A "sends" the at-the-moment equivalent of said-dollars (yuan) through the IOV via ILP and it comes out on the other side as dollars.

In this example, the value of the XRP used is needed in order for the XRP blockchain to record the amount utilized to perform this transaction. It actually wouldn't matter if the value of each was $0.50 or $10,000...you'll either use a lot of them to move your $$ or relatively few of them.

No.  It can’t.  One of those banks is being royally screwed and won’t be happy about it.  

A thing is worth what the market will pay.  

You can decide that dog turds are worth $100 each but good luck getting someone outside your circle of nuttiness to pay that for one.

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On 3/16/2020 at 6:12 PM, drmount said:

I don't know if this could be the case, but could some authority (IMF? Ripple? BIS?) just set the value of XRP at some number, arbitrarily?

I think so.  Look at all the "stable" coins.  The difference is that they are "pegged" to or "backed" by something.  So, in theory, if XRP is "pegged" to gold, then the price set would be whatever the price of gold is.  It would eventually get more complicated, being that the US only have about 8,000 tons of gold.  That is 256M ounces or 7.2B grams.  If they assigned an XRP to the value of a gram, with 100B coins that would only be about 7 cents.

When people say "peg XRP to the price of gold" they are obviously thinking of the $1,500/ounce price, which is worth 384B dollars today, I think they actually want to peg XRP to the dollar as it related to gold.  Even still, with all 100B coins that's only $3.84 and most people aren't getting to park their lambo on the moon.  The math would get even more complicated depending on how many XRP are being HODL'd at any given time.  The price would need to fluctuate to maintain the value.  I guess we'll see what happens, I'm hopeful.

Edited by XRP_Almighty_Q
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On 3/17/2020 at 6:39 AM, ZeeperCreeper said:

You can set any price you want, but that doesn't mean that anyone is willing to buy for that price. In the end people pay what they think it's worth at the moment.

This would entail people are buying it for the wrong reasons. If you wanted to remit $100 worth of XRP then you buy $100 worth of XRP so it doesn't matter if at this point 1 XRP is $1 or $10,000. All that matters to you is you want $100 worth of XRP to make your cross border transaction. 

To the people buying BTC now compared to 5 years ago, does it matter to them if it's $100 or $20,000? No, they are just stacking Sats. 

XRP's use case means the price of a single XRP does not matter as you buy what you wish to transmit however an ever increasing value of XRP is required to sustain a growing demand for ODL. This assumes Ripple's ODL will continue to see growth however the current market price is sufficient in line with current demand. 

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