A message to the XRP apologists overruning this subreddit
Every once in a while this subreddit gets just overrun with XRP apologists. They tell us about how dumb we are for not seeing the genius of XRP and smugly tell us that we must just hate to make money. And once again I find myself explaining why I think XRP's evaluation is completely insane. Obviously it is a free country, and no one is going to prevent you from buying XRP, just please find your own space to talk about how wonderful it is.
First of all, I think Ripple labs is a fairly impressive company, and I would be completely open to buying stock in it, but I don't think that value proposition carries over to XRP. I even think it is completely plausible that Ripple supplants SWIFT's antiquated technology.
But let's assume that Ripple took over for Swift…. what would that mean. According to Wikipedia, SWIFT as of 2015 linked more than 11,000 financial institutions in more than 200 countries and territories, who were exchanging an average of over 15 million messages per day. https://en.wikipedia.org/wiki/Society_for_Worldwide_Interbank_Financial_Telecommunication
That means that SWIFT is doing approximately 5,475,000,000.00 transactions per year (15 million times 365 = 5,475,000,000.00)
XRP has a transaction fee of .00001 XRP (see https://developers.ripple.com/transaction-cost.html) Which means that over the course of a year, $27,375 XRP would be burned IF Ripple Labs took over SWIFT (.00001 * $.5 * 5,475,000,000.00) In addition, each Ripple account is required to have a small reserve of 20 XRP in order to trade. Assuming that all the 11,000 financial institutions in SWIFT had this reserve, that would take 220,000 XRP off the market. So based on these numbers, I am supposed to accept XRPs 20 billion dollar marketcap (which is actually more like 50 billion when total supply is factored in as it should be.) And then there's the risk that SWIFT or a bank consortium would fork the open source protocol and introduce their own fiat tokens
XRP's market cap seems completely ridiculous even if it had already succeeded.