/biz/ - Business & Finance

Assuming xRapid replaces ALL SWIFT transfers, the price calculated using the equation of exchange [1] is... $0.0023/XRP.

The way xRapid works is that the sender first sells the token (eg. USD from an American bank) he has for XRP, then he sells XRP for a different, target token (eg. EUR issued by one European bank).
The equation of exchange is:
totalSupplyOfXrp*xrpPrice = xrpTransactionVelocity*transactionVolumeInDollars
or
marketCapitalization = howManyTimesEachXrpIsTradedPerSecond*transactionVolumeInDollarsPerOneSecond
The logic is simple: if there are 10 tokens in total, and we know both that the daily transaction volume in tokens is 10 (= daily velocity of 1) and $10 in dollars, then the price of the token is $1. Anything else is mathematically impossible.

SWIFT is used to transfer $5T daily. That's a lot, but for xRapid's 4 second per transaction [3] that's only $231.48M.
When divided by the total supply of XRP (~100B XRP), the fair price is $0.0023/XRP. (That means all 100B xrp are traded each 4 seconds).

Let's be extremely charitable and assume 99B XRP is holded and only 1B XRP is traded by banks. Now the fair price is $0.23/XRP.
Again, that's assuming xRapid fully replaces SWIFT, an extremely unlikely scenario.

What the fair price means is price without speculative money, ie. where it settles at after the bubble ends.
[1] https://en.wikipedia.org/wiki/Equation_of_exchange
[2] https://www.fincen.gov/sites/default/files/shared/Appendix_D.pdf
[3] https://ripple.com/xrp/

>>11271000
Nice digits, those trips are a good representation of your IQ. But no, that conclusion is based on the following analysis:
Assuming xRapid replaces ALL SWIFT transfers, the price calculated using the equation of exchange [1] is... $0.0023/XRP.

The way xRapid works is that the sender first sells the token (eg. USD from an American bank) he has for XRP, then he sells XRP for a different, target token (eg. EUR issued by one European bank).
The equation of exchange is:
totalSupplyOfXrp*xrpPrice = xrpTransactionVelocity*transactionVolumeInDollars
or
marketCapitalization = howManyTimesEachXrpIsTradedPerSecond*transactionVolumeInDollarsPerOneSecond
The logic is simple: if there are 10 tokens in total, and we know both that the daily transaction volume in tokens is 10 (= daily velocity of 1) and $10 in dollars, then the price of the token is $1. Anything else is mathematically impossible.

SWIFT is used to transfer $5T daily. That's a lot, but for xRapid's 4 second per transaction [3] that's only $231.48M.
When divided by the total supply of XRP (~100B XRP), the fair price is $0.0023/XRP. (That means all 100B xrp are traded each 4 seconds).

Let's be extremely charitable and assume 99B XRP is holded and only 1B XRP is traded by banks. Now the fair price is $0.23/XRP.
Again, that's assuming xRapid fully replaces SWIFT, an extremely unlikely scenario.

What the fair price means is price without speculative money, ie. where it settles at after the bubble ends.
[1] https://en.wikipedia.org/wiki/Equation_of_exchange
[2] https://www.fincen.gov/sites/default/files/shared/Appendix_D.pdf
[3] https://ripple.com/xrp/

Assuming xRapid replaces ALL SWIFT transfers, the price calculated using the equation of exchange [1] is... $0.0023/XRP.

The way xRapid works is that the sender first sells the token (eg. USD from an American bank) he has for XRP, then he sells XRP for a different, target token (eg. EUR issued by one European bank).
The equation of exchange is:
totalSupplyOfXrp*xrpPrice = xrpTransactionVelocity*transactionVolumeInDollars
or
marketCapitalization = howManyTimesEachXrpIsTradedPerSecond*transactionVolumeInDollarsPerOneSecond
The logic is simple: if there are 10 tokens in total, and we know both that the daily transaction volume in tokens is 10 (= daily velocity of 1) and $10 in dollars, then the price of the token is $1. Anything else is mathematically impossible.

SWIFT is used to transfer $5T daily. That's a lot, but for xRapid's 4 second per transaction [3] that's only $231.48M.
When divided by the total supply of XRP (~100B XRP), the fair price is $0.0023/XRP. (That means all 100B xrp are traded each 4 seconds).

Let's be extremely charitable and assume 99B XRP is holded and only 1B XRP is traded by banks. Now the fair price is $0.23/XRP.
Again, that's assuming xRapid fully replaces SWIFT, an extremely unlikely scenario.

What the fair price means is price without speculative money, ie. where it settles at after the bubble ends.
[1] https://en.wikipedia.org/wiki/Equation_of_exchange
[2] https://www.fincen.gov/sites/default/files/shared/Appendix_D.pdf
[3] https://ripple.com/xrp/