My thoughts on Ripple... And why it can only grow so much and won't see the same gains as Bitcoin.
The main problem with Ripple is that there will be too many "coins" in circulation.
Let's say there are around 35 Billion released out of a total of 100 Billion to be eventually released. (Some are being held back out, so its hard to estimate the exact figure out there already).
In contrast, Bitcoin is capped at a total of a mere 21 Million ever to be released.
Let's think about that for a moment...
If Ripple hit $220 that would make it worth $7.7 Trillion market cap.
Do you realize that the total value of all the world's coins and banknotes for all fiat currencies only totals $7.6 Trillion?
Similarly, all the world's above-ground gold reserves are estimated at 187,000 tonnes by the World Gold Council. That puts the total value at around $7.7 Trillion.
How could something overtake the value of almost all the fiat currencies or the even the all the gold reserves on the face of the Earth?
Let's go further...(No pun intended
)
If Ripple at $1 was to one day hit $1,000, even at the current 35 Billion released, that would mean it would have a market capitalization of $35 Trillion!
The national US debt currently stands at $20 Trillion by comparison.
Does anyone really believe that Ripple would be worth nearly twice the current US debt level?
Some say that $1,000 is absurd and Ripple would never go that high....
But remember Bitcoin first traded in 2010 for $1 and went to over $20,000.... So why can't Ripple or any other Altcoin do the same?
Remember ALL Ripple has been "pre-mined" unlike Bitcoin.
Ripple has locked 55 billion (55% of the total possible supply) into a series of escrows. These escrows are on the ledger itself and the ledger mechanics, enforced by consensus, control the release of the XRP.
It will be released at one billion Ripple each month over the next 55 months.
So that's less than 5 years.
Let's say Ripple hit $1,000 on the total 100 Billion to be released....
That would give it a total market value of $100 Trillion!
$100 Trillion is more than the entirety of all the nominal value in earth's economy... This is simply not going to happen guys!
And don't forget, we have not yet taken into consideration the other 100 or so Cryptocurrencies and their total market capitalization into the equation based on growth.
The gains we are currently seeing with Altcoins is not physically possible nor sustainable in the future.
I'll admit I've made money investing in Altcoins, but I realize this unsustainable pyramid scheme cannot go on forever.
My advice is to make money while you can in the short term because it is not a long-term investment by any means.
If in the future the bulk of Cryptocurrencies crash leaving a few still standing, you will see a GFC a magnitude of times bigger than the Great Depression of 1929 - 1939 and will make grown men who drive Ford GT's cry and wish they were never born... Life will be so tough
