XRP can not accrue value even if Ripple detects SWIFT due to the token speed problem

The XRP army is a lively team, it is easily activated by the critical XRP articles. This is not the hate XRP, rather a salient point of the little-discussed speed problem that the XRP token will have to face in a hypothetical mass adoption scenario.

As Kyle Samani of Multicoin Capital explains in this key piece, the speed of tokens is often overlooked in the cryptographic sector. Basically, all token pitches include a line that goes like this: "There is a fixed stock of tokens, as the token demand increases, even the price."

This logic does not take into account the problem of speed.

XRP will be used to pay network charges for the implementation of the xRapid Ripple e protocol can he also be used as a bridge currency between institutions. As such, XRP will change hands very quickly. Buyers will not keep tokens for more than a few minutes at a time. There is simply no incentive to keep them and incur price risks against the dollar.

Here's how token velocity works in the XRP case.

The speed of a token is a measure of the lap time between successive uses of the coin / token. If a payment takes 3 seconds, the daily token speed can reach 24 * 60 * 60/3 = 28800 – this in turn means that "in principle" each XRP can be reused 28,800 times a day.

In practice, we believe that an xRapid transaction is actually holding xrp for 1-2 minutes (say 60s for simplicity). This makes the speed 1440.

The lower speed should lead to a higher price. When the market demand (xRapid traffic flow) is high, there will not be enough xrp available if many are blocked or mistakenly traded. High speed = lowest price. Lower speed = high price (for xRapid transactions). The lack of availability on an exchange will lead to higher prices (liquidity curves). source

At 60 seconds each XRP is used 1,440 times a day (60 minutes X 24 hours). Suppose XRP is priced at $ 1 ….

Therefore, to use up to 1 billion XRP on a permanent basis, a volume of $ 1.44 trillion per day is needed for each exchange / corridor. (1,440 X 1 billion)

At a price of XRP = $ 10, the volume traded should be $ 14.4 trillion. The entire SWIFT network only has a daily volume of $ 5 trillion per day.

Suppose that within 5 years the escrow was issued and the investors / speculators hold half of all XRP, which leaves 50 billion XRP to be used as an exchange transfer. This means that you will need a huge volume of XRP usage to use all XRP and thus increase the price of XRP. source

The above calculations are quite discouraging for the delirious XRP believers who think that XRP can reach unrealistic heights such as $ 5, $ 10 or even $ 589 as a popular and rambling XRP holder on Twitter. The XRP token can not accrue value even if the Ripple protocol actually becomes what the most enthusiastic supporters hope will become the world's leading network for financial transfers.