Ripple: XRP Price Speculation

[misterbigg]

Will XRPs appreciate in value faster than Bitcoins? Specifically, what will grow higher in value: $10,000 worth of Bitcoins today or $10,000 worth of XRPs today?

[HappyScamp]

My guess is that there are so many unknown potential dynamics that it is probably unpredictable:

as the trust system gains fluidity, it should make the fluidity of BTC much much better.

But then, by extension, it should do the same for other currencies as well.

This adds to the already impossible level of unpredictability regarding BTC previous to Ripple.

Meanwhile the world economy is not exactly in a stable state, with currency wars and rumors of currency wars.

Ripple is an interesting idea.  I am holding on to mine for now and using it to help the system by facilitating micro-trusting (see the micro trust thread).

[herzmeister]

XRPs should not become much more expensive than they currently are. They're basically a fee to create an account, and that fee shouldn't be all that high.

[misterbigg]

XRPs should not become much more expensive than they currently are. They're basically a fee to create an account, and that fee shouldn't be all that high.

Then why do Bitcoins have any value? XRP will have as much value as the market will assign to them. XRPs have all the properties of a currency. Just like Bitcoin. You are wrong. Here are some thoughts from others:

A few comments...

XRP as a currency.

XRP are not "just" what you use to send Ripple transactions. They are also the only thing you can hold in Ripple which is not an IOU. I think XRP will most definitely be a currency, with a non-negligible total market cap which floats against other currencies. And to understand why you need to look no further than why Bitcoin is/will be a valuable currency.

Bitcoins are valuable because they are in use, and they are in use because they are scarce, durable, portable, fungible and divisible; that is, a good currency. So are Ripple credits:

Scarce - There's an upper bound of 100B XRP.
Durable - You can store credits as private keys, back them up and encrypt them.
Portable - You can send them easily anywhere using the Ripple system.
Fungible - I don't know enough about Ripple but I'll guess all credits are the same.
Divisible - There are a total of 100 quadrillion drops in the system.

XRPs have all it takes to become a good currency, and I believe it will be used as such. A currency also needs to be current, and here psychological factors play a large role - the fact that many of the early adopters don't perceive it as a currency might slow down the process, but it won't stop it.

The fact that, in addition, XRP are what you use to send transactions in Ripple, will help them gain value as Ripple becomes in greater demand.

[herzmeister]

Post office stamps never became a currency really, although there are/were lots of stamp collectors.

[misterbigg]

Post office stamps never became a currency really

XRPs are not like stamps. XRPs have these qualities:

Scarce - There's an upper bound of 100B XRP.
Durable - You can store credits as private keys, back them up and encrypt them.
Portable - You can send them easily anywhere using the Ripple system.
...
Divisible - There are a total of 100 quadrillion drops in the system.

Stamps do not have these qualities. Did you not read the previous posts?

[herzmeister]

I'd say post office stamps are pretty durable, portable, and divisible too, as well as relatively scarce (as far as central banking goes anyway) being pegged to the national currency. They fulfill all requirements for a good currency.

Back to topic, speculation about XRP Price or the discussion about it is kind of pointless, as OpenCoin acts like a central bank that can issue more of them at will at any time in any amount.

[misterbigg]

Back to topic, speculation about XRP Price or the discussion about it is kind of pointless, as OpenCoin acts like a central bank that can issue more of them at will at any time in any amount.

Well presumably there can never be more than 100 billion of them.

[Ripple Labs]

Back to topic, speculation about XRP Price or the discussion about it is kind of pointless, as OpenCoin acts like a central bank that can issue more of them at will at any time in any amount.

No OpenCoin can never issue any more XRP. In the same way satoshi can never issue more bitcoins.

[interlagos]

There was an article about a year ago from Amir Taaki titled
"Roadmap for the revolution: the future"
http://bitcoinmedia.com/roadmap-for-the-revolution-the-future/
where he described Bitcoin as settlement system while highlighting the necessity for clearing system as well.

He could not imagine at a time how those other parts of the whole ecosystem would look like, but now a year later we can already see how Ripple can become a clearing system that would offload low-value transactions volume from Bitcoin.

So the question boils down to what is bigger - settlement or clearing system?

If in the long run they become equal in their market shares then for 21 bitcoin today (1 millionth of total supply) one can buy 1M ripples (1 hundred thousandth of total supply) which seems like a good deal.

[herzmeister]

sure not more than 100 billion, but until all of them are issued, the value will drop with every give-away. OpenCoin can and probably will regulate the value just like a central bank does.

[ploum]

OpenCoin can and probably will regulate the value just like a central bank does.

Which is exactly the main criticism against Ripple.

I wonder if it would have been a good idea to make XRP different so it cannot be used as money. For example: by having continuous generation of XRPs and a validity: a XRP disappear after a given time.

[Monster Tent]

If satoshi came out with a new bitcoin it would gain some traction based on who he is. I dont think ripple would have the value it does without the founders who are behind it.

In the same way Google coins would have some value because its google backing them. Its the same reason ixcoin is worthless because no one trusts the founder.

[alexkravets]

RFC for a sketch of proposal to eliminate Flood Risk while not depriving founders of just rewards and not slowing down network growth due to account funding becoming too expensive:

https://bitcointalk.org/index.php?topic=148278.msg1574081#msg1574081

[Beepbop]

I wonder if it would have been a good idea to make XRP different so it cannot be used as money. For example: by having continuous generation of XRPs and a validity: a XRP disappear after a given time.

That's an interesting idea. Norway sells perpetual non-denomiated 1st class international mail stamps, quite similar to XRP except that their number is not limited and the weight classes are set by law. These stamps only have to be honored by the Nowegian Postal Service, and have no expiry date. Unspent stamps thus represent an eternal liability for the national postal service, except if some law is passed that makes them invalid in the future. If some day a large holder desides to ruin Christmas by using his hoard of stamps (bought decades ago) to send lumps of coal to every child in the world, they would have to change the postage weight rates (or make the sending of lumps of coal illegal). Since Ripple would only be able to do the first thing (increasing cost) this would make mailing super expensive while the evil santa is sending out coal, but the postal service would still make money. If the postal service could neither ban lumps of coal from being sent, nor change the weight limits, they would either go bankrupt or have to ask the government to help them with a draft or other way to temporarily expand the service volume.

Your proposal, with an expiry date, would look more like an International Reply Coupon. These are redeemable worldwide, for a 1st class international mail stamped letter in the country where it's redeemed, but each coupon has an expiry date stamped on it. I have a couple of those, and I have to send them out soon to allow my correspondent abroad to redeem it and send his reply back to me.

IRCs having an expiry date helps limit the potential liability of the postal services worldwide. If there was no expiry date, they would not be able know if millions of dollars worth of IRCs had been lost, or if that they suddenly would be spent some time in the future.

[Meizirkki]

XRP price is controlled by supply from Opencoin. Why not ask them about it instead of speculating..?

[Raoul Duke]

XRP price is controlled by supply from Opencoin. Why not ask them about it instead of speculating..?

How would they pump the crowd/price if they did that, Sherlock?

[Beepbop]

International Reply Coupon.

Haha:
http://en.wikipedia.org/wiki/Ponzi_scheme

Ponzi's original scheme was based on the arbitrage of international reply coupons for postage stamps; however, he soon diverted investors' money to make payments to earlier investors and himself.

The profit that could be made by taking advantage of the differing postal rates in different countries to buy IRCs cheaply in one country and exchange them for stamps of a higher value in another country was the intended profit generator for a scheme operated by Charles Ponzi, which became the fraudulent Ponzi scheme; in practice, the overhead on buying and selling large numbers of the very low-value IRCs precluded profitability.

The selling price and exchange value in stamps in each country were since adjusted to some extent to remove some of the potential for profit, but ongoing fluctuations in cost of living and exchange rates make it impossible to achieve this completely.

Let the games begin, I guess. Reminds me of the Seinfeld episode with the bottle recycling.

NEWMAN: Wait a minute. You mean you get five cents here, and ten cents there. You could round up bottles here and run 'em out to Michigan for the difference.

KRAMER: No, it doesn't work.

NEWMAN: What d'you mean it doesn't work? You get enough bottles together...

KRAMER: Yeah, you overload your inventory and you blow your margins on gasoline. Trust me, it doesn't work.

[SPOILER]
They end up using a mail truck to transport the bottles.
[/SPOILER]

[Meizirkki]

XRP price is controlled by supply from Opencoin. Why not ask them about it instead of speculating..?

How would they pump the crowd/price if they did that, Sherlock?

Yes. I'm just saying this thread has no purpose.

[misterbigg]

I'm just saying this thread has no purpose.

This thread has shown that 74% of voters believe Bitcoin to be the better investment as of today. Therefore your statement is false.

What has no purpose is your statement that "this thread has no purpose."