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/biz/ - Business & Finance

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11226280 No.11226280 [Reply] [Original]

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/

>> No.11226285

>>11226280
link is shit

>> No.11226289
File: 109 KB, 500x566, retard.png [View same] [iqdb] [saucenao] [google]
11226289

>>11226280
volume / supply

>> No.11226293

>>11226289
that's how quantity theory of money works, it's really not that complicated.
https://en.wikipedia.org/wiki/Quantity_theory_of_money

>> No.11226295

>>11226285
crystal meth

>kids

stay away

>> No.11226304

>>11226293
by that, ETH would be close $1 now KYS
you shouldn't be allowed to post here

>> No.11226315

>>11226304
eth is valued speculatively based on future utility.
Xrp is objectively overvalued even under most optimistic future scenarios.

>> No.11226324
File: 46 KB, 650x487, leave-anon-alone.jpg [View same] [iqdb] [saucenao] [google]
11226324

>Post gets destroyed
>Delete
>Repost
>Post gets destroyed

Leave OP alone!

>> No.11226336

>>11226315
> he believes that 1 tulip can't have value of 1000 Guldens

stop doing financial calculations

are you here to make money or protect your dying shitcoin investment?

>> No.11226340

>>11226324
the price is the same, I only pasted explanation of the equation terms in the wrong order. Now it's correct.

>> No.11226350

>>11226336
Sincerely believing that the asset isn't overvalued stops people from selling at the right time.
This valuation really can't be argued, at best you can try to reduce the amount of XRPs actively traded.

>> No.11226393

>>11226280
If that was true nobody would buy ripple for $0.5, but the price is higher, proving you wrong

>> No.11226394

>>11226280
Replace SWIFT...oh boy, do some people actually believe that is going to happen? I bet they think BTC will be the world currency too. fucking 2018 /biz/

>> No.11226417

>>11226350
your calculation is 99% off from the real world [future] price

by this calculation the dollar would be reduced to paper cost
which we know will never happen ..... how can piece of paper
have any value

you can't calculate the price like this because the value of something
is only given by the fact that someone on this earth is willing to pay
this much Y for it

Y = commodity, currency, goods, any crypto asset shitcoin

>> No.11226418

>>11226280
>assumes ALL XRP is being utilized entirely and ONLY by swift
>assumes all XRP is in circulation and ONLY used for swift volume
>ignores liquidity completely, assumes it's 100% available at his arbitrary price
>and volume has no bearing on market price somehow magically in this scenario
>implies the entirety of the volume can be moved simultaneously in his calculation without any effect on market price


Holy.fucking.shit
I've seen some stupid shit on this board, but this takes the cake.
>"Hey guys, if i just arbitrarily divide the swift daily volume by transaction speed and total supply I get teh rEaL fAiR PRicE

/biz/ everyone

>> No.11226422
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11226422

>>11226418

>> No.11226442

>>11226418
all you're claiming is that a velocity of 1, or even 0.01 per 4 sec is too big, without any argument why. It appears the price just looks too small to you and that's the extent of your problem.
>if i just arbitrarily divide
that's literally the equation used to value currencies.

>> No.11226493

>>11226418
>assumes ALL XRP is being utilized entirely and ONLY by swift
clearly not, because I also calculated for only 1B xrp traded
>assumes all XRP is in circulation and ONLY used for swift volume
swift volume is ~50% of all global money transfers. At best you can multiply by two, which would mean ripple all payments on earth use ripple.
>ignores liquidity completely, assumes it's 100% available at his arbitrary price
>and volume has no bearing on market price somehow magically in this scenario
>implies the entirety of the volume can be moved simultaneously in his calculation without any effect on market price
that's included in the velocity term

this is really disappointing, maybe the hour is wrong.

>> No.11226544

>>11226442
>It appears the price just looks too small to you and that's the extent of your problem.
That's not his only problem, but it is a good point. The price of XRP has been higher than your calculated number every day for over 5 years. That's with no usage of xRapid.

Maybe it's an indication that you're looking at this the wrong way.

>> No.11226556

>>11226544
literally every crypto is overvalued because of speculators, news at 11.

>> No.11226562

>>11226280
Nice one op. Ripplets just don't get that their coin just holds speculative value like all the other shitcoins out there and that's it

>> No.11226568

>>11226280
> doesn't see the big picture
> doesn't understand how the value of something is formed
> is blinded by his delusional calculations
> he doesn't know what are stream payments with XRP (you will pay 50% of the price by watching 1/2 of the video)
> he doesn't know the business potential in fast micro payments
> he doesn't know about YT, Wikipedia web monetization
> he doesn't know about Coil
> he doesn't know about xPring
> he doesn't see that Ripple is really doing something with crypto, trying for the real world usage instead of pure hype train
> he doesn't understand that XRP was donated to Ripple by the original devs
> he complains about majority of XRP being held by Ripple when in fact this is true for any crypto asset
> he repeats the same FUD from pre 2017 era that he learned on Chinese anime image board

======================
YOU WILL NEVER MAKE IT
======================

>> No.11226575

>>11226556
When xRapid replaces ALL SWIFT transfers, the number of speculators will increase by orders of magnitude.

>> No.11226578

Interesting fact:

It only takes 1.9 mil. faggots with 20K XRP purchase to deplete the whole current circulating supply.

>> No.11226631

>>11226442
God there so many stupid assumptions here Im not sure you're even going to grasp it. SO I'll post anyway so others reading this who aren't brainlets can see why this falls down. Here are assumptions you made and ignored to shoehorn the price YOU want.
In your calculation you imply the full 231 million per transaction being made every 4 seconds to cover the swift volume is :

1) taking place in a corridor, point a to b, that has exchanges with enough xrp and order book depth to transact $231 MILLION worth of XRP instantly without it affecting the price AT ALL
2) that this exchange has no less than 1 BILLION xrp MINIMUM on the order book and somehow is transacting the ENTIRETY of the volume without affecting price
3) That XRP is not being held or used for ANY OTHER PURPOSE. Not even investment or speculation. It's all available on this single magic order book

>"If i just ignore liquidity and volatility completely, it can magic itself in there somehow"

It's almost as if there are other determining factors in what moves markets and that liquidity matters. You are a classic example of "if you torture the data long enough, it will confess anything". Except all you did was torture the readers here by ignoring all other market forces to write a narrative YOU wanted to believe.
You can not move volume without liquidity and without affecting the price. History and the market, which is observable right now, shows that the market cap, which is just a basic function of price and supply, is always a magnitude higher than volume. Always. So in order to move your 5 trillion of 24hr swift volume, you show me how you intend to do that with an instrument that has a market cap of $230 million

You demonstrate to me in any market, anytime, anywhere, where there has been $5 trillion consistently traded in a 24hr period by a coin or currency with a circulating supply worth only $231million. You MAY want to consider you've seriously missed something

>> No.11226650

>>11226568
>he doesn't understand that XRP was donated to Ripple by the original devs
What original devs? Ripple (protocol) was invented by McCaleb and Larsen. The latter was ceo when all xrps were generated, and still is.
>he complains about majority of XRP being held by Ripple when in fact this is true for any crypto asset
that's only true for shitcoins, not btc, eth, few others.
>rest
I'm not the one that claims xrp is going to moon because of banks
>>11226631
>1) taking place in a corridor, point a to b, that has exchanges with enough xrp and order book depth to transact $231 MILLION worth of XRP instantly without it affecting the price AT ALL
>2) that this exchange has no less than 1 BILLION xrp MINIMUM on the order book and somehow is transacting the ENTIRETY of the volume without affecting price
Tell that to ripple. You're not arguing against my valuation, you're arguing against the whole design of xRapid.
Yes, I agree that absurd, but without xRapid xrp has no valuation except speculative.
>where there has been $5 trillion consistently traded in a 24hr period by a coin or currency with a circulating supply worth only $231million
That's literally how it's supposed to work. Banks sell their token for xrp, then buy target token using that xrp, all in 4 seconds.

>> No.11226670

>>11226650
Please read:
https://en.wikipedia.org/wiki/Ripple_(payment_protocol)

> claims BTC, ETH has no whales that can manipulate price drastically (Satoshi?)

I mean WTF are you trying to even prove in this post that 1 USD has in fact a value of single piece of paper .. close to nothing?

>> No.11226676

>>11226280
Please OP, this is just pathetic. If you really are interested in this method of calculating price, see https://s3-us-west-1.amazonaws.com/fundamental-valuation-framework-for-cryptoassets/A+Fundamental+Valuation+Framework+for+Cryptoassets_June+2018.pdf

>> No.11226702

>>11226650
>That's literally how it's supposed to work. Banks sell their token for xrp, then buy target token using that xrp, all in 4 seconds.

Close. xRapid sources the XRP from a partnered exchange in the country where the money is being sent from, transfers to an exchange in the destination country and sells it on the exchange there. That part takes about 4 seconds. Banks dont do the selling themselves, xRapid handles that part. Banks just send the instruction.
and before you ask, Market Makers take care of the arb trades but that also has limits

Now how do you do that with $5 trillion in 24/hr volume all over the world, every country, with an asset worth (in your calculation) only $231million? It does NOT work at your valuation because you ignore liquidity. The price has to be higher to service that volume. You cant buy ALL the xrp around the world and transact it instantly for a single 4 second $231million transaction in one market that you arbitrarily boiled this entire thing down to

Volume and liquidity matters here and you are consistently ignoring it

>> No.11226743

>>11226280
Your calculations and assumptions are way of, if you think this is an objective valuation you're retarded.

>> No.11226799

>>11226670
usd has value because the us government forces people to pay taxes in it
>>11226676
nothing in that paper contradicts what I wrote.
>>11226702
>Now how do you do that with $5 trillion in 24/hr volume all over the world, every country, with an asset worth (in your calculation) only $231million?
You're looking at it from the wrong side. The 4 sec holding period means all demand from the banks supports a market cap of $231M. That's it.
Any higher valuations must come from either artificial reduction in supply, or by demand from somewhere else. From where?

>> No.11226825

>>11226799
Except you valuation you fucking brainlet.

>> No.11226828

>>11226280
The first XRP biz poster whom using logic....btw xvia and xcurrent are completely functioning without XRP

>> No.11226866

>>11226280
let these brainlets think this has value.
the xrp site clearly states that its an utility token and that you shouldn't be speculating on the price.

in the end ripplelabs determines the price.

and it wont be fucking LMAO $10 dolla....

i've read some articles about how you don't need a lot of xrp to transfer a few million dollars in the past. like a big bank would have enough with a few 100 xrp to do big transactions all year long.

>>11226417
>>11226418


anyone who buys xrp to hold it is a fucking brainlet.

>> No.11226889

>>11226866
The price is right, you can all pretend to know how much ripple is worth, but in the end the price is right.

>> No.11226893

arguing something has close to no value on the hype driven crypto /biz/

being this retarded in 2018

>> No.11226904

>>11226825
they are assuming xrp is going to be used as a 'store of value' which they call 'storage of demand' to be hip. In other words, they assume xrp is going to have a higher value and get a result consistent with it - shocking. Nothing in that paper contradicts valuation from use in xRapid. You are free to assume xrp is going to be used as the main currency on Earth, making any impact from xRapid completely irrelevant.
That's a fundamentally different narrative than 'xrp is going to go up because of demand from the banks'.

Is there even a dice game that accepts xrp, after all these years?

>> No.11226905

>>11226889
the price is right but any smart person will not use xrp to hold.

I use it to circumvent bitcoin transfer prices between exchanges. at times when there's hype I can even get more bitcoin that way.

I'm glad for XRP and the many retards in the market. it helps me attain my goals faster.

> imagine holding xrp.

>> No.11226959

>>11226825
btw from that analysis
>In the “XRP Success Case,” XRP could secure an estimated 15-30% market share of the total storage demand value for cryptoassets, equivalent to ~$1.6-3.2tn.
>Note that while this estimate for storage demand value for XRP is higher than that for BTC
so xrp becomes the biggest crypto and store of value within gold's order of magnitude due to reasons... their calculated price for that case? $32.91/xrp.
That's only ~9x from xrp's ATH.