Topic: Why are people buying XRP? (Read 1543 times)

Recieved a ripple bounty, sold 2/3rds for BTC's keeping 1/3rd of my XRP's not because I think ripple will be successful, but because I firmly believe there are alot of stupid people in the world that will pump the price up on Opencoin Inc hype

People should worry about this... instead of whining about Generation 2.0 networks.

XRP just keeps rising in a thin, but orderly market...
It's up 30% vs BTC in the last 10 days despite an end-of-May giveaway:

http://bitcoincharts.com/charts/rippleXRP#rg10ztgSzm1g10zm2g25

FTFY

Ripple is bullshit. 

Ripple is some bullshit.

Ripple received funding from Google.  Consequently, XRP have gone up in value because of the hype.

The most important benefit of crypto-currencies is not to act as a store of value, but to improve the way we transmit value between ourselves. The existing banking system is slow, inefficient, and expensive.

Bitcoin was a good first attempt at a new type of transfer protocol, but it has issues:

1) It's been in beta for four years due to lack of funding and organized leadership.

2) You have to buy Bitcoins to be able to transmit value. The average person does not want to go through the hassle of sending money to an exchange and buying Bitcoins just so they can exchange them for a good or service they could've purchased for a small fee. In other words, paying the extra transaction fee associated with using a credit card is less onerous to the average person than the inconvenience of buying Bitcoins.

3) The Bitcoin exchange rate is volatile.

OpenCoin and Ripple solve these problems:

1) A well-funded, for-profit, centralized and organized company called OpenCoin can afford to hire the best and brightest to develop the Ripple software rapidly. Besides R&D, they can also afford marketing, office space, etc. Hardcore Bitcoiners HATE this aspect of Ripple, but only because they hate authority in general. Authority is not always a bad thing as it can achieve goals quicker by focusing the team, especially when backed by significant resources like venture capital.

2) Ripple allows for transactions to take place in fiat currencies, which alleviates the requirement to buy an intermediate, volatile currency like Bitcoin. Once you deposit money to a gateway, you're done.

3) Unless you buy XRP, you don't have to worry about a volatile exchange rate. With Ripple, it is not necessary to hold XRP except a small reserve amount plus a few more. Today, you can access all the features of a Ripple account for less than $2 of XRP.

Ripple also has additional benefits, like built-in distributed exchanges that will let you seamlessly convert one fiat currency into another. Once additional gateways come online and market liquidity improves, you will literally be able to pay someone in JPY, EUR, or CNY, for example, using only your USD, CAD, or whatever it is you hold in your Ripple account.

XRP will become increasingly valuable because it is used as a settlement currency. For example, there might not be a lot of liquidity in a market like CAD/JPY, but there will be liquid CAD/XRP and JPY/XRP markets. Paying someone in JPY using CAD, for example, is then a matter of an automatic swap of CAD for XRP, then XRP for JPY. As a result, XRP becomes a valuable settlement currency that each gateway will require to create liquidity in the market for their IOUs. This will generate demand for millions upon millions of XRP.

Also, each Ripple account requires a certain amount of XRP to be held in reserve or to create lines of trust. This will result in the demand of billions of XRP which are essentially "frozen" and can't be sold, thus making XRP rarer and more valuable.

At the end of the day, if you believe that the OpenCoin team will be successful, and you know that they only profit if XRP increases in value, then holding XRP is a good idea; it's a bet on Ripple's adoption.

Disclosure: I've converted almost all of my BTC into XRP.

There are many tens of billions of XRP...why are people buying them?

Full disclosure, I sold the vast majority of mine for ฿2.5.

There are like, what, 80 billion XRP? Roughly 8,000 XRP per currently existing bitcoin.  If XRP value as a currency equaled Bitcoin, then I guess it makes sense to buy 35,000 XRP for 2.5 bitcoins. But, XRP isn't a currency really, right?

I'll admit to not fully understanding ripple.  I think the IOU idea is very interesting, but skeptical that mixing friends, family, and money will work out well.