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At what point/year do you think Ripple will see mass adoption and when will XRP also experience mass adoption?

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24 minutes ago, Hodor said:

@Hodlezerper Your comments are critical thinking in action - these are all interesting points.  

First off out of the gate:  I agree that they shouldn't go public until they have time for all of the distractions that it will bring.  My preference would be for them to put this off until well into 2018, but the possibility of massive capital infusion(s) is sometimes too great. 

Point by point:

  1. To benefit from what a massive amount of capital infusion can do for their business - this is the same motivation other businesses have for going public. 
  2. Also, to massively boost the interest in (and price of) XRP.  This would thereby benefit them in two ways - much more than an IPO can traditionally do. 

Investors will not be confused about it; they will be excited about it.  This is what sets Ripple apart - a digital asset in high demand.

I don't think they have problems differentiating their products - can you point to a source for this?  IMO their website is very well-organized for steering potential business partners to the right areas. 

I agree - this is why the "big 4" have practices to guide companies through the process. Snapchat was definitely not equipped to deal with it on their own - they had to hire a firm (Cooley Corporation) to handle the IPO.  Ripple would need to do the same. 

Their product is XRP, and they offer services to clients as well.  A lot of IPOs with novel income streams have set records for IPOs in the tech space (Google and FB with advertising revenue alone, or Uber with driver fees).  You definitely don't need traditional products like tennis shoes or other manufactured items to do a successful IPO.

Not at all.  They've consistently been present at all major industry conferences, and have a very slick ability to market to their target market: banks and financial institutions.  They want to get more high-profile, not less. 

Very much appreciate your thoughtful replies. To be up front, I consider this more of an exercise of my understanding of the platform and therefore my ability to consider various possibilities within that context. In other words, I like these conversations as an exercise to push our knowledge and ways of thinking. So thank you for your time in that regard. :)

Also, apologies, I haven't figured out how to do that multiple quote formatting you do so I'll just stumble through the formatting...lol. And forgive the potential novel here...

 

CAPITAL INFUSION & INTEREST IN PRODUCT

I believe that Ripple has come up with an ingenious way to fund their project. Their first step is traditional venture capital, which they've secured fairly well. As Miguel Vias has said, they're not worried about keeping the lights on. 

The second way to fund their platform is to license their product to banks. This creates an additional revenue stream for them. From what I could deduce based on information released by Mr. Schwartz and others, they're licensing for something between 1-3 million bucks? So, say they sign up 100 banks, they've secured another couple hundred million dollars to keep their lights on. Therefore, I'm not sure they really need the money an IPO would provide, at least not at the moment. (I also don't think it would be successful right now because the public is simply not knowledgeable when it comes to digital assets like XRP.)

The third is simply their asset XRP. Every time the price of XRP goes up $0.01 their worth on paper goes up roughly $600,000,000 (Based on a rough assumption that they're currently in control of 60 Billion zerps. This is misleading of course because they can't simply sell their product off for whatever the market says it is worth. There has to be someone on the other end of the trade. (Which is another reason I have a problem with all the FUD regarding them just selling their asset and bailing. It doesn't make sense as there has to be liquidity around for that to even happen. Their asset is only worth what other people are willing to pay for it.) Point is, down the line, this will effectively be how they source their income without selling their asset...In other words, never erode principle. This leads to...

Their fourth and most lucrative way of generating income will be once the markets are highly liquid and their platform is successful. They will use their remaining XRP holdings to loan out to liquidity providers, banks, and whoever else may have a use for XRP by then. They will become some future version of a commercial bank. They will have effectively created a market for themselves. This is based off of Miguel Vias comments here. https://www.youtube.com/watch?v=d2C0-W0fQWk (end of the video I think)

EXCITMENT IN AN IPO

I think that we have a long way to go before most of the investing public will know enough to even be excited. The vast majority of people still have no idea what the hell any of this stuff is. I agree, when people figure it out they get excited, but we're a ways off from that. @Hodor I'm assuming you've been around this space for quite some time. Years? You're in maybe some of the earliest categories of people to know about this stuff. The general public has no idea what is going on, for the most part. 

CONFUSION IN PRODUCT

I can't find the link I saw one of Ripple's executives talking about their naming conventions, but I think it's fair to say that they've had to be ultra concise about their naming of products and have spent a great deal of time differentiating from the beginning. People still call XRP ripples and so forth. But they are different things. One is a digital asset XRP, and the other is a company that provides software solutions to banks. They are synergistic by design, but are not the same thing. Anyway, I know we know this, but this is a hurdle you would have to overcome in a public marketplace. It might seem pedestrian, but I do not believe it is a small issue when you're talking about the general public within the context of an IPO. 

 

WHAT IS THEIR ACTUAL PRODUCT?

 

I think this is probably a key point for all of us to understand, and I welcome healthy debate here (as always). 

I don't agree that their product is XRP. Right now they're using it as a way to generate income, but I think once Ripple has reached it's "Final Form" their product will actually turn into Software Licensing and Lending Services. Those are two different business models. They will ultimately want to hang onto their assets to generate revenue, but that's not their business model. Just like McDonald's supposedly makes money selling hamburgers, they're ultimately just one of the largest real estate companies in the world. McDonald's has assets on its books (real estate), while their service gives that asset value. 

Ripple creates software for banks, but their ultimate asset is going to be XRP. It isn't their product though. Their product will be some new version of a lending service. Their product will give their asset value, just like McDonald's.

The reason I use Nike as an analogy and you used Google as an example is that those companies have the potential to offer services over and over again. Google can continue to sell ads, Nike to sell shoes, so on and so forth. Facebook, Google, etc..are basically giant electronic billboards and that is a fairly traditional model. They create value by creating product, or having the ability to sell their product again and again and again. Ripple only has a certain amount of XRPs and therefore XRPs will not be their product. Only their asset. How they leverage that asset is a different story. 

 

COMPANY PRESENCE

I totally agree that they have and must continue to assert a strong industry presence. But when it comes to public perception, I don't think they're that interested. They're going to stay in the face on banks, the banking industry and finance in general, but we won't see any billboards on the side of a freeway anytime soon that says "Buy XRPs! They're fast!". 

In the context of an IPO, I don't think that my understanding of their model suggests they will ever go after smaller consumers. Their current business models gives them exposure to consumers via third party companies that may see a need to create a service that utilizes their asset (XRP). It will always be somewhat indirect. Hence my assertion that I don't think they'll ever have a strong public presence. Though, I should've defined what I meant by that, which would be more in line with a company like "google" or "facebook" or "Snapchat". Those are well known in the public. I can't imagine Ripple ever caring all that much whether the average person knows who they are. 

For instance, would anyone who hasn't sent a wire transfer really know about or care what SWIFT is? Even those who do send wires may not know what SWIFT is. It's not essential. They just need their bank to tell them that their value will arrive at their intended destination. If Ripple sticks to their business model (and it seems they are) they're going to be well known within the context of their business, but not much outside of that...

 

CONCLUSION

I really don't know what I'm talking about here, it's mostly just fun to exercise our understanding of this new way of doing business and imaging what the world might look like after it has become ubiquitous. 

I look forward to counter points to my assertions and assumptions.

Thanks!

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@Hodlezerper It appears that you have some very strong feeling anti-IPO!  I didn't really expect another round; @Mercury was looking for candidates for his debate idea - since you feel quite strongly against the idea of an IPO, perhaps you would feel comfortable proposing a debate and letting him moderate?  I am not up for another debate, but I will attempt to summarize for the few readers that may have the stomach to follow a fourth round of responses on this topic. 

I'll summarize your "four ways" to generate capital investment that you discussed in your response:

  1. Traditional Venture Capital
  2. License their Product to Banks
  3. Their asset XRP (NOTE: I didn't follow how they raise money just from the value of XRP increasing however)
  4. Selling XRP once it is in "high demand" by FIs and banks

I do not agree that these choices outweigh the benefits of an IPO.  Just as a benchmark, the IPO for Snapchat raised 3.4 billion dollars. 

3.4 billion dollars is a ton of investment money that Ripple could then pour into new geographic markets, new currency pairing alliances, new products, hiring, advertising, etc... all the things that companies do with IPO money. 

In addition, once an IPO is announced, there will be immense publicity from it.  This will result in immense publicity for XRP.  I would predict XRP price to break into dollars almost immediately upon an IPO announcement, IMO. 

16 minutes ago, Hodlezerper said:

But when it comes to public perception, I don't think they're that interested.

I think this part of the conversation has become circular if I respond yet again.  You and I clearly have different views of Ripple and their ability to clearly communicate.  I'll leave it there.  Readers can research the corporate site and decide for themselves. 

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3 minutes ago, Hodor said:

In addition, once an IPO is announced, there will be immense publicity from it.  This will result in immense publicity for XRP.  I would predict XRP price to break into dollars almost immediately upon an IPO announcement, IMO. 

I agreed with this statement.  IPO would be good for Ripple and XRP.

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9 minutes ago, Hodor said:

@Hodlezerper It appears that you have some very strong feeling anti-IPO!  I didn't really expect another round; @Mercury was looking for candidates for his debate idea - since you feel quite strongly against the idea of an IPO, perhaps you would feel comfortable proposing a debate and letting him moderate?  I am not up for another debate, but I will attempt to summarize for the few readers that may have the stomach to follow a fourth round of responses on this topic. 

I'll summarize your "four ways" to generate capital investment that you discussed in your response:

  1. Traditional Venture Capital
  2. License their Product to Banks
  3. Their asset XRP (NOTE: I didn't follow how they raise money just from the value of XRP increasing however)
  4. Selling XRP once it is in "high demand" by FIs and banks

I do not agree that these choices outweigh the benefits of an IPO.  Just as a benchmark, the IPO for Snapchat raised 3.4 billion dollars. 

3.4 billion dollars is a ton of investment money that Ripple could then pour into new geographic markets, new currency pairing alliances, new products, hiring, advertising, etc... all the things that companies do with IPO money. 

In addition, once an IPO is announced, there will be immense publicity from it.  This will result in immense publicity for XRP.  I would predict XRP price to break into dollars almost immediately upon an IPO announcement, IMO. 

I think this part of the conversation has become circular if I respond yet again.  You and I clearly have different views of Ripple and their ability to clearly communicate.  I'll leave it there.  Readers can research the corporate site and decide for themselves. 

hahaha for sure. Definitely understandable regarding the time it takes to debate these things. Honestly not that important to me so I'm going to bow out here, lol. 

Last couple comments...

I should've been more clear regarding the asset. We all know that they're selling those assets to various companies for the foreseeable future, so the value of XRP would definitely effect the value of those institutional sales. In other words, for the next 55 months (starting? 2018?) they'll have access to 1 billion a month. That could potentially generate billions for them over the course of 5 years, thereby negating the need for public capital. Let's say by the end of that 55 month period they still retain 20 billion or so zerps at, say a market price of $10, that's $200 billion to play around with like a bank. Anyway, just an example. 

I absolutely agree that an IPO would generate a ton of interest and excitement and would likely skyrocket the price of XRP, which would be good for people who hold XRP currently, to be sure, but maybe not the company itself in the long run. Case in point, Snapchat has been crushed since its IPO. It made a few people super rich, but I'm not sure it made a questionable product any more legitimate. Time will tell...

I absolutely agree with you that Ripple communicates clearly and concisely. Not debate there. I'm only suggesting that their aim for that concise communication may not be towards individuals but rather the more valuable institutional players. After all, they are an enterprise solution.

Anyway! Thanks for the exercise! Much respect to everyone!

Exciting times!!!!!!!

 

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8 minutes ago, Hodlezerper said:

I absolutely agree that an IPO would generate a ton of interest and excitement and would likely skyrocket the price of XRP, which would be good for people who hold XRP currently, to be sure, but maybe not the company itself in the long run.

If XRP skyrocket, then Ripple's value will increase.  They both are correlated since Ripple holds billions of XRP.  Ultimately Ripple is working to increase price of XRP.

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9 minutes ago, Hodlezerper said:

I should've been more clear regarding the asset. We all know that they're selling those assets to various companies for the foreseeable future, so the value of XRP would definitely effect the value of those institutional sales. In other words, for the next 55 months (starting? 2018?) they'll have access to 1 billion a month. That could potentially generate billions for them over the course of 5 years, thereby negating the need for public capital. Let's say by the end of that 55 month period they still retain 20 billion or so zerps at, say a market price of $10, that's $200 billion to play around with like a bank. Anyway, just an example. 

I absolutely agree that an IPO would generate a ton of interest and excitement and would likely skyrocket the price of XRP, which would be good for people who hold XRP currently, to be sure, but maybe not the company itself in the long run. Case in point, Snapchat has been crushed since its IPO. It made a few people super rich, but I'm not sure it made a questionable product any more legitimate. Time will tell...

These are very good points.  :yes3:

Unlike snapchat, however, Ripple's use cases are rock-solid.  Transforming worldwide payments is a bit different than an end-user application.  I don't think I'd assume Ripple share price would suffer the same fate; FB's share price faded after the IPO and rebounded to levels that were 8X it's IPO target, so it's all in the use case I think, and the adoption. 

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1 minute ago, theone said:

If XRP skyrocket, then Ripple's value will increase.  They both are correlated since Ripple holds billions of XRP.  Ultimately Ripple is working to increase price of XRP.

An IPO is not "free" by any means, and afterwards the company is listed publicly and has to conform to reporting requirements and some other sometimes-onerous requirements.  However, I agree and IMO the benefits outweigh the costs!

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This is not a "for-or-against" comment on a Ripple IPO... however, if you have never been involved as an investor or as an owner in the hostel take over of a publicly traded company be careful what you wish for. My gut tells me that if Ripple did an IPO it would not take long for a hostile take over to get staged. Ripple has accomplished something revolutionary and there are players with endless amounts of funds who would be happy to come to the table and buy out Ripple. There would be nothing that could be done but hope that EVERY Ripple share holder would vote against a take-over. What might happen after a buy-out is anyone's guess.

 

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6 hours ago, Hodor said:

I agree with this statement.  Ripple (the company) is in the process of scaling quickly IMO, and the bank consortium is quickly approaching being measured in the hundreds.   Almost there!  :good:

We will also ascend to #1 within crypto; the only question is when and how.   I also personally believe that Ripple, due to the fact that it is a US-based company has several advantages and disadvantages associated with it's structure and location.

The disadvantage is that they cannot promote and sponsor XRP as heavily as a nonprofit foundation based in ... Switzerland, but there are several very powerful advantages as well.  One of which never gets talked about, but it could spike the price into dollar ranges within days of being announced.... if it is announced.   Can you guess what I'm talking about?  That's right.  Going public. 

Personally I hope they do not; I think there are several advantages to remaining private for another year or so, but eventually, this will happen IMO.  Just too much money.  It will make Uber look like child's play. 

I agree. It is not started yet IMO. 

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So I got a question for you guys here, since Ripple has 55 Billion XRP that will be placed in escrow at the end of the year with a release of 1 billion XRP to the company for sale with each month, wouldn't Ripple want the value of XRP to be reasonably high ($.24 vs $1) by the time they start selling those tokens that are released from escrow?

Also to tie into this, SBI Holdings currently owns 11% of Ripple and about 60% of Ripple Asia so they would benefit from the increased value of XRP and the sale of the tokens after release from escrow, so wouldn't they drive hard to release information before the end of the year stating that all current members in their consortium currently use the Ripple Protocol in conjunction with XRP in order to drive the value of XRP?

Just something that's been floating around in my head and was wondering what you guys thought. Thanks.

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1 hour ago, Bagheera said:

There would be nothing that could be done but hope that EVERY Ripple share holder would vote against a take-over. What might happen after a buy-out is anyone's guess.

This is another very good point. 

Once a company goes "public" the founders and owners basically lose their power unless they keep 51% percent ownership and vote as a block.  There's also some other unsavory tactics to fight against a takeover, but in general you are correct - one more distraction in the "con" column definitely. 

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57 minutes ago, CryptoJym said:

Also to tie into this, SBI Holdings currently owns 11% of Ripple and about 60% of Ripple Asia so they would benefit from the increased value of XRP and the sale of the tokens after release from escrow, so wouldn't they drive hard to release information before the end of the year stating that all current members in their consortium currently use the Ripple Protocol in conjunction with XRP in order to drive the value of XRP?

They've been pretty vocal about their intention to drive XRP usage, but I think it's just one step short of overt guarantees and the like; the raw number of banks jumping on is impressive, as well as the colossal size. 

Quote

Today, we are happy to announce that the Japan bank consortium continues to drive interest among the banking community in Japan, bringing the total number of members to 61, representing over 80% of total banking assets in Japan.

Also, check out "HSBC."  @Live4xrp found out that:

Quote

"HSBC is adding Chris Larsen, the former CEO of distributed ledger firm Ripple, to its newly minted technology advisory board.According to HSBC, Larsen and other advisory board members will offer "advice and guidance" on a range of issues, including potential applications of blockchain tech."

Quote

 

From Wikipedia:

HSBC Holdings PLC is a British–Hong Kong multinational banking and financial services holding company headquartered in London, United Kingdom. It is the world's seventh largest bank by total assets and the largest in Europe with total assets of US$2.374 trillion (as of December 2016). It was established in its present form in London in 1991 by The Hongkong and Shanghai Banking Corporation Limited to act as a new group holding company.  The origins of the bank lie mainly in Hong Kong and to a lesser extent in Shanghai, where branches were first opened in 1865. The HSBC name is derived from the initials of the Hongkong and Shanghai Banking Corporation.[9] The company was first formally incorporated in 1866. The company continues to see both the United Kingdom and Hong Kong as its "home markets"

 

 

Edited by Hodor

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2 hours ago, CryptoJym said:

So I got a question for you guys here, since Ripple has 55 Billion XRP that will be placed in escrow at the end of the year with a release of 1 billion XRP to the company for sale with each month, wouldn't Ripple want the value of XRP to be reasonably high ($.24 vs $1) by the time they start selling those tokens that are released from escrow?

Also to tie into this, SBI Holdings currently owns 11% of Ripple and about 60% of Ripple Asia so they would benefit from the increased value of XRP and the sale of the tokens after release from escrow, so wouldn't they drive hard to release information before the end of the year stating that all current members in their consortium currently use the Ripple Protocol in conjunction with XRP in order to drive the value of XRP?

Just something that's been floating around in my head and was wondering what you guys thought. Thanks.

I believe that Ripple will be selling these XRPs to companies for a significantly reduced rate.

It is in their interest to get people using the asset, which will increase its value. The company thinks very long term and realistically.

Also, they are targeting market makers and forex type businesses, some of who are new and some of who haven't even been conceived yet. 

These companies will likely not have the capital to purchase a ton of zerps if the price is really high.

Usefulness will drive price, but you can't have use unless the asset has been distributed throughout the world. There are few of any companies willing to drop hundreds of millions of dollars on something that may have no value.

Therefore, Ripple can also give XRP out with stipulations, or loan them with a given set of parameters that must be met by the receiving company.

I believe there is a great deal of work behind the scenes to get their asset into the wild, but they can't generate true value until it's implemented correctly.

Regardless if market price, Ripple has the authority to sell at whatever price they deem necessary to further their interest.

FYI, I believe this is all good news for the overall use case and value of XRP.

They are sowing seeds very carefully right now and we won't know the vast majority of what is happening until it's much later.

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@Hodlezerper I think you're into wild speculation at this point, right? 

Neither you, nor I, nor any reader has any idea what's going on behind the scenes.  There has been a ton of speculation about the prices at which Ripple sells its XRP to market makers and other organizations and individuals; a more likely scenario in my opinion is that XRP is being sold at a premium above market. 

In addition, there many organizations and individuals that would be keenly interested in the ability to buy XRP in bulk at a premium. 

The logic is this:  If I am an investment banker, and I approach a Ripple representative and indicate that I'm willing to purchase 100 million XRP at a 20% premium above market price, then it gives me a distinct advantage over trying to acquire this on the open market if the liquidity isn't high enough to absorb my purchase without spiking the price

The only way I'd be able to beat that deal is if I sipped it through a straw slowly, but then I'm giving up the benefit of timing - markets could go up or down substantially in the time frame it would take me to purchase all 100 million XRP without spiking the price. 

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