What is Ripple and for what is it supposed to be utilized (once they've evolved from growth investors)?
Basically, if you’ve ever done a Wire transfer between banks aka SWIFT payment, that is what Ripple is attempting to replace. So it’s not a full-on ‘currency’ per se, but rather a transport layer in which the currency you want to send is converted to, transferred, and then converted into its output that the recipient wants. Ripple can do in a few seconds what takes wire/swift payments maybe a day or more. Though this advantage is also what makes it overvalued because no one needs to hold ripple longer than a few seconds. This is also why they’ve been forcing Ripple wallet holders to hold a certain minimum amount of Ripple in their wallets in order to use the service.
Why is Ripple mathematically overvalued?
Each day 15 trillion dollars is transported in Wire/SWIFT form according to this US Treasury document. There are 86,400 seconds in a day. Assume that Ripple takes over 100% of that market (that's a stretch but let's go with it just to make a point). Assume that each transaction takes 1 second (though this is easy to adjust and doesn't make much difference). $15,000,000,000,000/86,400 seconds = $173,611,111 needing to be in Ripple form at any given time. You might say "but Ripple doesn't take 1 second, it takes a few seconds." Okay fine, even if you say 10 seconds, that's still less than $2 billion dollars that needs to be in Ripple form at any given time. The current market cap of Ripple $XRPUSD is over $100 billion which is grossly overvalued in my opinion - people are buying it as an investment, not thinking about these numbers.
Can Ripple's management do anything about that?
Again, this is why they force users to keep a certain amount of Ripple in their wallets as a reserve, the amount that they've been asking to keep in it has reduced over time, as they've grown in . This is unlikely to get lower any time soon given that they'd have to justify and keep steady the enormous appreciation of value they've incurred in the last month...in fact it makes me wonder if they will raise the reserve levels to consolidate the expansion. That's very difficult to do. Slow growth was Ripple's friend. It allowed them to lower reserves gradually in an inverse proportional relationship to the of users. That geometric harmony is gone...
Seems like you've left a lot out of your calculations.
I find your argument Intriguing about why banks were a necessity.
I will agree with you that we no longer need a bank vault in the physical sense but it can't be denied that banks provide a considerable amount of security now in other ways like with credit and debit card fraud protection. This protects the money you have direct deposited and spend on a debit card instead of paying in physical money.
We have all heard about exchanges getting hacked and Bitcoin stolen. Was this loss insured? Did these people get their money back? Are the exchanges liable? Isn't it implied that you pay for their service that they secure and protect your currency? Bitcoin has a limited number of coins and we know many have been lost forever from hard drives crashing, going into a landfill accidentally or a paper wallet being lost or stolen. Is that just the unfortunate reality of a decentralized currency?
Didn't we get away from using physical currency because it can be lost, stolen, destroyed and not replaced?
We all can agree that physical money is not convenient. We disagree with what is needed to replace it.
What I see from exchanges is not to leave money in a wallet on their exchange. Of course they still want you to put it on to do business so they came make their money without taking responsibility for the security. They also charge you to move your money off the exchange lol. Does the bank charge you money to withdraw cash at their ATM or physical branch?
Our system with federally backed, insured currency protects you and I. Crypto; without all the security and assurance can't replace our current centralized currencies.
Maybe that is where RFID's come in. Like waving a phone at Starbucks but with an embedded RFID on your person. Of course then you are fulfilling Biblical prophecy about the end of days on earth so you may have some resistance on that.