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Valuation Models - XRP The Digital Currency Vs. Ripple the Company


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On 6/4/2017 at 0:20 PM, Xrplover said:

Joel, What is your retort to this video?

 

Terrible video. Full of misinformation, FUD, and just plain retarded logic.

Don't invest in crypto because of EMPs? Really? Well, guess we just shouldn't own smartphones, use Amazon/Netflix/Hulu, or mobile banking sites either huh? Because those are all susceptible to EMPs as well...

Man, people are so damn stupid... I mean... Holy crap.

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Hi Joel,

I wrote a post on June 2nd and am waiting for your feedback. You're probably very busy but if you can find the time, I'd really appreciate your feedback.

Best regards

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I like this valuation model, and it makes sense. But it seems to me to rely on two things  (1) XRP being used by FIs in a massive amount daily and (2) normal everyday inefficiencies in human buying and selling behavior requiring FIs to hold certain amounts of XRP in reserve. 

I think when (1) starts occurring (2) will certainly follow and that is what will create demand for the price to rise. 

A big danger as I see it is some kind of reduction in the inefficiencies of currency trading in the future (such as artificial intelligence or some prediction system) where FIs don't need to hold much XRP or any at all because they can predict exactly how much XRP they will need at any one time. The system then becomes one continual flow of 100 billion XRP, and it's value would become very low. 

 

Edited by Quintree
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2 hours ago, CryptoIzzy said:

hey there - maybe already referenced or addressed, but please feel free to check out my note 

https://cryptoizzy.blogspot.com.au/2017/05/xrp-valuation.html

 

also though check out the update i just added. 

 

cheers

izzy

Besides your naiveté about the Chinese government and a few numerical assumptions here and there, this is the best post in this entire forum. It should be stickied above this valuation thread. 

Edited by Mark555
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  • 2 weeks later...
On 5/25/2017 at 2:51 PM, JoelKatz said:

I don't think so. It reflects no change in our strategy. I was originally opposed to the lock up because I didn't think it would make any difference. It just eliminated one silly bit of FUD about how we could destroy the value of XRP if we wanted to -- but we clearly don't.

Actually it could hurt you right? because from what I see the escrows linearly release the XRPS. The very purpose you have the hoard if I understand correctly is to prevent upward shocks so that as new customers join the network you can add liquidity to ease shocks and remove the market impact for the client as a bonus. 

So I am kind of surprised as this linear rate of release every month from the escrow because it assumes linear adoption rate over time and causes undesirable behaviors like cyclicality i.e induced sinusoidal waves due to discrete release of the coins. Could you explain the reasoning behind such a scheme? Maybe it is mentioned elsewhere in which case you could just point me toward it. Thx!.

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2 hours ago, goldstar111 said:

Actually it could hurt you right? because from what I see the escrows linearly release the XRPS. The very purpose you have the hoard if I understand correctly is to prevent upward shocks so that as new customers join the network you can add liquidity to ease shocks and remove the market impact for the client as a bonus. 

So I am kind of surprised as this linear rate of release every month from the escrow because it assumes linear adoption rate over time and causes undesirable behaviors like cyclicality i.e induced sinusoidal waves due to discrete release of the coins. Could you explain the reasoning behind such a scheme? Maybe it is mentioned elsewhere in which case you could just point me toward it. Thx!.

The idea was largely to keep it simple, lock enough to make it meaningful but not so much as to risk making things difficult in the future. The release rate is linear in terms of XRP, but non-linear in terms of value since the price of XRP will change. It's just designed to be very likely to be more than we need. In the unlikely event we ever find ourselves short of XRP we need or want to do something with, we can just buy more from the market. The excess will be re-escrowed to the back of the line.

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7 minutes ago, JoelKatz said:

The idea was largely to keep it simple, lock enough to make it meaningful but not so much as to risk making things difficult in the future. The release rate is linear in terms of XRP, but non-linear in terms of value since the price of XRP will change. It's just designed to be very likely to be more than we need. In the unlikely event we ever find ourselves short of XRP we need or want to do something with, we can just buy more from the market. The excess will be re-escrowed to the back of the line.

Understood thx. I agree over the long term you will have nonlinearity due to price increase. 

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17 hours ago, JoelKatz said:

The idea was largely to keep it simple, lock enough to make it meaningful but not so much as to risk making things difficult in the future. The release rate is linear in terms of XRP, but non-linear in terms of value since the price of XRP will change. It's just designed to be very likely to be more than we need. In the unlikely event we ever find ourselves short of XRP we need or want to do something with, we can just buy more from the market. The excess will be re-escrowed to the back of the line.

Hi @JoelKatz , For my part I would directly ask (and I hope not to shock anyone ;) ): do you use your XRP (when you can release them) to control the price in any way? Probably in order to make it more stable so it can be less frightening for the banks you want to deal with?

Edited by Strovu
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17 hours ago, JoelKatz said:

The idea was largely to keep it simple, lock enough to make it meaningful but not so much as to risk making things difficult in the future. The release rate is linear in terms of XRP, but non-linear in terms of value since the price of XRP will change. It's just designed to be very likely to be more than we need. In the unlikely event we ever find ourselves short of XRP we need or want to do something with, we can just buy more from the market. The excess will be re-escrowed to the back of the line.

I am going to create a new post with just this comment and lock it, pin it and feature it. This is the simplest, shortest and lest technical answer yet.

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  • karlos featured and unpinned this topic

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