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CyberpunkWayne

Blindsided -- Truth, Biases, and Why XRP is Undervalued

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Posted (edited)

Nicely done, and you're absolutely correct.  I particularly enjoyed the part about reconciling your beliefs with your XRP holdings, I've had many of the same thoughts, you're not alone.  I expect I'll continue to have those thoughts and like many others I would assume.

 

*Edited because it's not the place for the rest of the discussion that I had posted*

Edited by sparr0w

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36 minutes ago, cmbartley said:

I agree with many points here but at the risk of being a Debbie Downer I just wanted to express that I'm not sure that XRP is currently undervalued. It was surely undervalued previously compared to the other tokens on the market. The value of essentially all tokens right now is speculative and the speculative promise of XRP was superior than other tokens and its unit price has risen appropriately as the space has grown. However, ultimately the value of XRP will draw from its utility. Right now XRP is not being used to facilitate payments in any significant way that we know of and there are still significant hurdles to implementing XRP as a standard for payments. I continue to be more bullish about XRP's prospects long-term than that of many of other tokens, but should XRP really have a marketcap greater than it currently does? Where do you see the current utility of XRP that argues in favor of a higher unit price/market cap? I think that Ripple is acutely aware that they need to get their car out of the garage and on the racetrack so that it can stop talking about how great their tech is and start to demonstrate it. JoelKatz was pretty clear that part of the reason he may need to switch to part time at Ripple is in order to work at companies that might be able to build tech on top of RCL and XRP to support the growth of the open network. Ripple is limited in this capacity as we all know and the reality is that a large portion of their company is focused on the software for banks. The recent price growth has been great for Ripple as it's allowed for the company to credibly pitch XRP as a potential payment method. Other tokens are also looking to capitalize on bitcoin transaction limits and I think we will actually start to see different tokens competing for payments in the real world. If payment applications get built on top of RCL I think that XRP will have an excellent chance of being dominant, but it's hard to ascribe more value to XRP at this time when it has yet to be used commercially in any significant capacity. Here's what's happening with some other tokens, I think that an ILP remittance ATM that allowed the sender to select the path based on speed, cost, and security would be an amazing opportunity to highlight XRP's superiority.

 

You raise a lot of good points. TBH, I'll have to think on it a while to figure out whether I've got a counter-point, or whether you've blown a gaping hole in one leg of my argument. 

Good, well-reasoned comment, though, in either case. 

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21 minutes ago, diversify said:

So when is XRP supposed to get started in facilitating payments?  End of 2017?

SBI's investment deck indicates that they will offer payment/forex services that run on Ripple and Bitcoin rails. This looks like it will launch in 2017.  Looks like they have one client and others in the wings. Presumably XRP will consistently outcompete BTC where value actually has to move on chain between two different accounts because it is faster and cheaper. BTC will outcompete in those cases where XRP cant provide the needed liquidity. This is part of why Miguel's job is so important and why he stressed building fiat liquidity in the Epicenter interview. It also looks like Ripple is pushing exchanges to shut down gateways and service XRP/Fiat trading on ledger so as not to congest RCL and to provide better KYC/AML. The competition is heating up. Bitcoin just agreed to segwit with a 2MB block increase, it will still be much slower than XRP with less consistency and more wasted energy. Also, even if the block size were increased to 1000 txns per second to compete with RCL, the single block time is around 10 min on average which means the minimum settlement time on RCL will always lower than the minimum settlement time on Blockchain. Wasted energy will always be greater on Bitcoin too, the world.may start to care about this.

 

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Posted (edited)

Cmbartly, i think current market cap of xrp is not too huge. Xrp is not a company, but it is a public asset. If xrp is used as store of value, xrp may represent the floating fund of the world like miguel talked about in consensus. 

If ripple's market cap is 13billion, then i would think the comapany is over valued. I believe xrp is in  different catagory, and should not be looked at in the same perspective as we look at company valuation 

Edited by gastownhero

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I 100% agree with this point gastownhero. 

I touched on this in my other post. 

We cannot view the XRP market cap in the same way we view the market cap of a publically traded company. 

XRP is a form of currency it is not a security. 

To state that XRP or BTC has a higher market cap than Amazon of Microsoft would be like saying that the USD or Mexican Peso has a higher market cap than Amazon or Microsoft.

You cannot compare apples to oranges.

One of the fallacies of the crypto world is that it uses the term market cap in the literal sense to quantify the overall value of a currency. People need reference points so it is understandable. 

However, the economic drivers behind the value of a crypto currency and the value of a company are different. Therefore, the economic factors behind the market cap of a crypto currency and the market cap of a company are different. 

Try googling the market cap of the US Dollar or the Mexican Peso and you will see what I mean. 

I can get into a deeper discussion of this if need be but for now this should do. 

 

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Posted (edited)
3 hours ago, XRPInStillH2O said:

I can get into a deeper discussion of this if need be but for now this should do. 

How much should pay for something has no current utility (other than art)?

Edited by cmbartley

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