1. Say the world has a fear of all fiat drowning in overprinting and inflation. Does it make sense for the average joe to buy and hold ripple to save himself from hyperinflation ? Even With so much ripple in the hands of so few ?
Or
2. Should the world forget ripple as an investment or store of value and just move on to "...ripple as a credit card equivalent ... " ( no one believes that a credit card will save him later )
Or
....is it something else .... ?
Are you asking for investment advice? OpenCoin employees will typically not offer speculation or forward looking statements regarding Ripple or it's built-in currency. Fortunately, I don't work for them so here goes!
Is it worthwhile to hold XRP (Ripple's built-in currency)? I think so. But it's a huge gamble. Who knows if someone is going to find a fatal flaw in the system? Bitcoin is much more established. It's had over 4 years of Russian teenagers beating on it trying to break into wallets via the block chain.
You ask about the "flood risk" of XRP, i.e. "so much ripple in the hands of so few." This is a risk, but only a short-term risk. OpenCoin and the founders disgorging themselves of their XRP can only happen once. Besides, it's not in their best interests to do so. There are other more serious risks. Such as, the software not working as advertised. Or the U.S. government seizing the domains of ALL gateways, preventing them from exchanging between IOUs and fiat. What if OpenCoin has to reset the ledger for some reason, before they release the software? That would suck (although rather unlikely).
The largest threat to crypto-currencies today is that the government will make it impossible to redeem your digital currency for electronic fiat. There are a variety of ways this could happen. Should this occur, the markets would become totally disordered. The only thing you could do with your currency at that point is to buy goods and services priced directly in Bitcoin or XRP. For Bitcoin, there is very little. For XRP practically nothing. Significant price depreciation would occur overnight as everyone panics to get rid of their crypto-cash. Presumably, the market response over time would be to offer more and more things priced in cryptocurrencies but that would take time. In the meanwhile, you're stuck.
Should the world forget XRPs as a store of value? I don't think so. Like any other asset, they have their own risk/return profile. A well diversified portfolio should certainly include at least a small amount of XRP. But it's a huge gamble, there's a significant chance of a total loss. People who sold the 40,000 or 50,000 XRP they got from signing up for the Ripple giveaway in this forum are, in my opinion, fools. They had the equivalent of a free lottery ticket and they exchanged it for a handful of dollars worth of Bitcoins. But to each their own, I suppose.
If you want to protect against hyperinflation there are several ways of doing it. The best protection is to employ all of these methods:
1. Create or buy a going concern (i.e. a business). A business which generates revenues is strong protection against the confiscation of wealth through inflation. Even better if the business is one which is necessary for living, like farming.
2. Own physical gold and silver. This hedges against Bitcoin and Ripple's biggest enemy, the electromagnetic pulse from a nuclear explosion which knocks out electricity and the Internet. Or more likely, the power will go out for economic reasons, which will leave you shit out of luck if you want to spend your crypto-currency.
3. Own Bitcoins. Obvious reasons here, but there are risks such as losing your wallet or as we have seen recently, disruption at the exchanges.
4. Own some XRP. Same reasons as Bitcoin. I wouldn't bet the farm though, Ripple isn't even out of beta yet!
Every individual has to decide for themselves how much fiat they want to hold versus how many other assets, and what the percentage of each asset is.
Disclosure: I own a business, precious metals, Bitcoins, and XRPs.
