XRP – why it needs a high price


hello everyone
let’s get started first off I have no financial interests I have no sponsored links on my videos
this is just for educational purposes please always check the description of
the videos for additional material with my first two videos XRP – the big
picture and ILP – all the money I may have triggered your appetite a
little but this video will make you really hungry because I am trying to
explain why I think XRP has to reach high prices by high prices I mean 4 digit prices so do your own however this is no financial advice so do your own research to back up your investments if you think about investing into XRP an additional note I want to tell that
my important videos and creating closed captions in four languages English
French German and Portuguese so feel free to share links to my videos or to my channel with people who speak those languages if you’re new to XRP I
recommend you to watch my first two videos XRP – the big picture and ILP – all
the money so that you have a strong foundation to understand what I’m going
to talk about in this video while I was talking mostly about
interoperability in my video ILP – all the money in this video I will be
more talking about cost on the screen you can see the six reasons why the nostro accounts banks have to have in the current or traditional payment systems are so expensive While RippleNet or more explicitly xCurrent addresses foreign exchange payment operations and Basel III compliance the use of XRP can address the cost which arises on liquidity on
Treasury operations and on currency hedging While those terms sound rather
cryptic and are highly financial terms let’s stick with the notion that
nostros are expensive and that the target of ILP RippleNet and XRP is to get rid of the nostros a short recap on what a Nostro account is let’s say I’m in Switzerland and I wanna pay or I wanna send money to the family of
my wife in Brazil so they would want to cash out Brazilian Real I however want to send Swiss francs so my bank needs to have an account in
the bank of the family of my wife in Brazil in Real such that the bank in
Brazil can pay out the Real to the family of my wife enter XRP
now this is way over simplified but just for you to get the concept in the future it’ll
be like that my bank in Switzerland buys XRP with the swiss franc because XRP is decentralized and is rather fast it can be sent to Brazil within seconds to the bank of the family of my wife the Bank in Brazil will sell the XRP for Real such that the bank can pay out the
Real to the family of my wife as you may have noticed in this scenario my bank
doesn’t need to have the nostro account an account on the Brazilian bank in
real anymore because it uses XRP as a bridge asset between the Swiss Franc
and the Brazilian Real well now let’s talk some figures and I hope you won’t
be intimidated by those many many zeroes you will be seeing when XRP was born
a hundred billion XRP were created a hundred billion a 1 with eleven zeros
one XRP is divisible by 1 million those smaller pieces are called drops
so 1 million drops make up one XRP this 100 billion is actually decreasing
because each transaction costs a few drops and there is about I think eight
to ten different transaction types on the XRP ledger
a payment transaction I think the minimum cost is 45 drops now let’s look at some real
figures Swift the traditional system is supposedly transacting about five
trillion a day
that’s a five with 12 zeros now let that sink
you need to put your big-boy pants on now you could argue five trillion
needing to be transacted with a hundred billion even if every XRP were used just once per day a dollar price of 50 per XRP would already be sufficient
to move the five trillion the previous calculation five trillion divided by a hundred billion equals to a XRP price of $50 is not sufficient I have made other videos where I explain why this calculation doesn’t work out
well in this video we will look at the most simple explanation why XRP price
actually needs a four-digit price if high-value payments are to go through
the system this simple explanation works like that David Schwartz the CTO of
Ripple has in the past in several social media confirmed that at the current
price which is below $1 low value high-volume payments are not a problem however we’re looking for high-value high-volume payments now let’s take a
look what that actually could mean through various researches I have done I
came to the conclusion that an upper limit of $10,000 is equally sufficient to assume the maximum value for a low value payment on another research I have
done I figured out that there are payments which are larger than 1 billion
dollars as a matter of fact in Europe and European system over 200
such payments go through the system every day because I don’t want to make
you crazy about price let’s do the conservative calculation let’s take the
upper maximum for low value payment and a rather conservative value for high
value payment 50 million the factor of 50 million divided by 10,000 is five thousand if we apply that factor to the current price which is around 30 cents
then we reach easily a dollar price of fifteen hundred per XRP and that’s a
very conservative estimate as I mentioned before in other videos I show
different perspectives which have basically the same result that a four
digit XRP price will be needed in the long run if high value payments are to
be sent through the system

50 thoughts on “XRP – why it needs a high price”

  1. Hello Michael! Thanks for your explanations and content about XRP and Ripple. I'm pretty sure that 1 XRP can be divided by 100K and not 1 million. So smallest xrp would be 0,00001 drop and not 0,000001. Can you confirm. Grüsse aus Elsass.

  2. Thanks for the simple explanation. The cavemen will hopefully be able to get this. Question is not ‘if’ but ‘when?’

  3. know you don't like riddlers but check this out
    https://twitter.com/bearableguy123/status/1162869339906818050

  4. Michael you should change your name to the XRP Professor 👨‍🏫
    Thank you for all the information you provided.

  5. Hi Michael,
    Du bist sehr aktiv. Vielen Dank dafür.
    Spiegelt sich da in Deinem Buero Fenster die brasilianische Flagge?
    Haeng doch noch eine mit dem ripple Logo drunter.
    😁🍀💰🗽

  6. First and foremost, thank you michael. I think simple acknowledgement speaks louder than words wouldnt you say. I think its great that you actually get feed back from D.S via twitter. The only youtuber who can defend his price statements and high price model. Few of us xrp enthusiasts gets feed back from Schwartz! That itself is a statment. I understand that the people at ripple and who are involved must stay tight lipped about the mass synchronization which i have always correlated as the moon. Shane ellis himself used the word synchronise. Same sheet of music, level playing field ,589 or what have you. Its been fun, but at this point i believe the xrp community cracked the enigma! Xrp can only work with a high price. The enterprize grade liquidity solutions was designed to solve not just some types of payments, but all of them. All the money. Remarkable michael.

  7. Thanks Michael, very clear explanation, however I'm missing how you have calculated the maximum low volume transaction of $10,000 at an XRP price of $ 0,30. I would love to see that calculation ! Bye the way, this implies that up until today XRP is not used for transactions higher than $10,000 yet …. do you have any 'evidence' about that, or is that an assumption ?

  8. Bullseye ! I know you know Michael but for everybody else please consider that 100 billion is not available for utility. Currently 42 billion and change is out of escrow and half of that is in cold storage somewhere, how much is actually available on exchanges to be used is the question and how much more will disappear once fomo kicks into overdrive ?
    I think four digits xrp is just the first step. I played with numbers for a while and came to a conclusion that $ 1,000 xrp will be considered cheap soon. Good luck to all players involved. Thank You Michael for your awesome work.

  9. Hi Michael, to further prove what your saying xrp must be a "higher" price to facilitate what swift transacts daily 5 trillion dollars, I've done some calculations based on real known figures and this also points towards "higher" prices.

    Swift daily total = 5 trillion
    Swift daily average transactions/messages total= 32 million (factual figures)

    5 trillion ÷ 32 million = average value of $156,250 each transaction

    Now to calculate demand on xrp per hour at current price to fulfil swift 5 trillion per day-
    32 million total daily transactions ÷ 24 hours = 1,333,333 transactions per hour

    1,333,333 x $156,250 Average per transaction =$ 208,333,281,250 ( 208 billion dollars ) per hour

    $208,333,281,250 ÷ 0.28 ( current price for xrp) = demand of 744,047,433,035 (744 billion) xrp per hour

    Now as you can see 744 billion xrp per hour demand at 0.28 per xrp to facilitate 5 trillion daily total is ridiculously high demand and the market would never allow thus meaning the price has to be higher. Even when changing the price to $10 or $100 per xrp in these mathematics, demand is STILL VERY HIGH to which you conclude the price has to go up to cope with the demand.
    Also two other points to consider are-

    -In the above maths everything is averaged out, so in the real world it wont be so in actual fact demand will peak up alot higher at given points during the day. Transaction totals would not be averaged out so some will be in millions/billions possibly. So therefore during the day at given points demand will dwarf my calculations given above!

    – Another important part missing is the amount of xrp readily available during a day to transact with. This again will or could massive put demand even higher. The above calculations dont account for this but let's say all 100 billion were available, still puts demand high, but we know this wont happen. But if were to apply say only 10 billion xrp readily available to calculations above again this can only do nothing but drive up price!

  10. This calc was done by Susan Athey, who is a board member at Ripple.

    https://s3-us-west-1.amazonaws.com/fundamental-valuation-framework-for-cryptoassets/A+Fundamental+Valuation+Framework+for+Cryptoassets_June+2018.pdf

  11. This analysis is lacking in explained assumptions, because there’s no reason $0.30 valued XRP can’t already move $50M USD.

  12. Hallo Michael was meinst du ist nicht besser bitcoin verkaufen und kaufen xrp weill ich denke schon bei 10 $ für xrp bitcoin muss zwischen 300000-400000 $ kostet was ich glaube nicht 2019-20

  13. Agreed Micheal, everything You say makes perfect sense, but one thing; the price .25 🥜 at this price there is no liquidity, no serious use case nor utility! With hundreds of growing partnerships with banks, incredible daily news just continues to drive down the price further down? So actually nothing makes sense anymore 🥴

  14. brother may Mars be with you, or was it Jupiter or Juno?… cant recall exactly, all i mean is may you be rich because i want to be rich too. in crypto hodl zerp we trust

  15. Thank you so much! Great explenation! Now the question is not “if”… but “when”? We are here together in this great journey!

  16. The short period of time during the past few days has been the perfect opportunity to accumulate more xrp. Even at current prices, knowing what we know it’s a no-brainer. The only way from here on is forward… There is a lot waiting for is… don’t look back, don’t blink, march forward and breath…

  17. Love your insight brother! Good price research! And the Andreas Vollenweider track at the end perfect! Thanks!

  18. I have been thinking this, I know I can't be the only one. But of course no one want to go around saying a .25-.50 cent coin will be $100-1000 in the near future. You laid it out perfectly. Very easy to understand. Thank You.

  19. If im not mistaking they are talking about streaming large payments in small amount so sorry to say that the high price is not necessary to move large amounts of money around the globe.
    Other than that nice to see some one post vids without all the hyping but with explanation of how things function so john doe gets the picture.

  20. Hi Michael, I don't have twitter so I thought I'd ask you here, I read a comment that you left someone that Ripple plan to have 1000 nodes by the end of the year. Please can you explain what that means in your live stream this evening? Sorry, I'm not too clued up on all the technical jargon haha!

  21. Hallo Michael. Boah jetzt schon mit Untertitel wird ja immer besser 😄 kommen jetzt alle Videos mit Untertiteln? Dann muss ich mir nicht immer ein Szene öfters anschauen um es zu begreifen 😅 mfg

Leave a Reply

Your email address will not be published. Required fields are marked *