XRP should NEVER reach 1/1 USD ratio

[thehedgemon]

I want to first say that I am a firm believer in the Ripple Network and the fully understand the potential it holds. In addition, I am posting this in hopes that maybe someone can convince me otherwise. However, if XRP were to ever come close to the 1/1 USD ratio everyone dreams of then it will immediately lose its edge as a ubiquitous exchange network. For example, if a user that originated from a market whose currency held close to no valuation compared to one of the worlds major monetary systems (USD), than how can this user be expected to pay for an account of 50 XRP??? This starts to resemble a system that Ripple is trying to solve! I understand that transaction fees would still be nothing at a 1/1 ratio, but a user could not even get that far if he could not open an account. It seems to me that XRP valuation would have to stay relatively low for complete world use. Anyways, if someone could elaborate more or possibly if anyone has any other predictions it would be greatly appreciated. Because at the moment, this only seems logical.

[kelsey]

dunno, not saying XRP's are worth anything as they are not, but then again neither should the USD be....so 1:1 sounds about right

[LiteBit]

Opencoin will just lower the reserve. It has already from 300 to 100 to 50.

[melvster]

it's hard to value and valuations overshoot

i dont think ripple should have a higher total market cap than bitcoin at this point

but there's not much float in circulation so you'll see an exaggerated price until that gets released

[thehedgemon]

Ok so I got a more technical response from someone on the Opencoin team.

Validators come to a consensus on the transaction fees and reserve levels every 1,024 ledgers. Prior to the flag ledger (ledger whose sequence is zero mod 1,024), each validator puts in its validation what it thinks the fees and reserve levels should be. After the flag ledger, each validator that wants to change these levels computes whether it can obtain a majority and if so on how much of the change it wants it can obtain a majority. If it can, then it injects a "pseudo-transaction" to change the fees or reserve levels. If the pseudo-transaction survives into the consensus transaction set, the fee/reserve is changed.

I'm wondering why it isn't on the wiki though...