The elephant in the room. SLOW MONEY. Why is that the case in the wonderful year of 2018? We have advanced so far in technology that cars can drive themselves, you can walk into an Amazon Market without having to see a cashier, print houses on giant printers, but we just can’t seem to get sending money to somebody efficiently (and cheaply) just yet.
Here is xRapid (XRP).
XRP can be used by banks to source liquidity on demand in real-time, and by payment providers to expand reach into new markets, provide faster payment settlements, and lower foreign exchange costs. If you have the time to learn about Ripple, make sure you know the difference between the Ripple products. Just as a refresher Ripple provides three products: xCurrent, xVia, and xRapid. All of which help to ease the flow of payments around the system and this article is mainly focused on putting a proper price on XRP, which is the xRapid product. One thing that the Ripple does better than a lot of other digital asset companies is agree that the system in place isn’t going anywhere anytime soon, BUT instead of trying to dethrone the established ways, they instead want to work along side with the status quo and then eventually transition the system. That is what we all deep inside know will happen with these banks, middle men, and other financial service providers.
To get an idea of how much money moves around per day think about how much moves per year. Approximately $155 trillion dollars moves across borders every single year which is $424,657,534,246.57 per day! That is a lot money that has to go through banks, middle men and other financial services all of which are throwing in their little fees and taking their time moving the money to where it’s supposed to go. What a shame that in 2018 fees on the high-end of 2.9% are being added on top of payments being sent to people who already have to wait days to receive money. Let’s try to put a proper price on XRP with the numbers shown above.
Daily movement of money across borders: $424,657,534,246.57
Average RippleNet fees: .04%
How much Ripple charges per day $424,657,534,246.57 x .04% = $169,863,013.70 (This is just for reference in how much more cheaper Ripple is compared to other payment companies).
On an elementary level if $424,657,534,246.57 moves everyday and currently they are 39,094,802,192 that means each XRP token would have to be worth around $10.86. Now hold your horses with this number because you have to realize that 1. Ripple (the company) has more XRP in escrow that releases 1 billion more per month and any left over gets thrown back in the line and waits to be released and 2. XRP has a decay rate that destroys part of a token each transaction. So yes more XRP is on the way every month, but the decay rate will eventually catch up to the supply and cause the price to rise way above $10.86.
Ripple’s success is ultimately tied to the number of partners on RippleNet (which has been growing steadily over the past year), how many people use Ripple’s products, and how effective XRP is. To envision this token as being a success you need to ensure that it has a real world use and while other tokens or coins may seem to have a purpose, until you see progress now like Ripple is doing with its growing list of partners and members, you just have a bunch of hot air going around. Sort of like TRX back in December.
Want my final thoughts on this? I say it’s a keeper. No it’s not centralized, yes it’s cheaper than most other digital assets, and YES it does have a real world application. We as consumers will probably definitely see direct improvement in our lives from xRapid, xVia, and xCurrent (the three products offered by Ripple) because we want to move our money as fast as we can send an e-mail and as cheap as sending a letter (maybe a little bit cheaper than that). The use case is there for Ripple, now all they need to do is convince the old banking system to give up their current comforts in order to catch up with the ever-growing world of technology. We as a planet are evolving VERY fast and if our money can’t keep up with us, then you know we have a problem!
Remember that this is a case situation and no guarantee can be made on the outcome of your investment based on this knowledge. Article written and interpretted by Cole Horton, and influenced by Alex Moskov of Coin Central.