Crystal Ball

Aug 05, 2018

Myself, I love a good debate (<- omg hilarious). The tension, the deep and quick thinking, so much credibility on the line, lol... fantastic sport. The immediate winners are usually (unfortunately) drawn by democracy, whether right or wrong, but without a doubt, time is the ultimate judge.

There's been a number of great debates lately (and a lot of bruised egos), but a wealth of information flows from these discussions that everyone benefits from, even if there are no final conclusions drawn. Thus, in the absense of conclusions, I've decided to stick my neck out and make a few predictions based upon my experiences and some of the information garnered from dozens of Twitter threads; as follows:

XRP hits $589 per unit by end-of-year 2018 - WON'T HAPPEN (And it didn't, EOY was 35 cents!!! You FOOLS!)

We all love Bearableguy's antics and riddles. They were clever, animated, and seemingly well-connected to insider information. That being said, with Bearableguy's disappearance, we're all left with more questions than answers. Disputably the most famous riddle has to do with the statement "$589+". To me, it's blatantly apparent that this means the coming release of the Cobalt edition of the XRP ledger will radically increase the price of XRP. It's not saying the price will climb to $589 USD as some people literally interpret this clue (how would that be a riddle then?), the 589 is actually a reference to Cobalt's atomic weight on the periodic table.

There have been some tweets proclaiming this number is actually derived from $23 trillion in nostro funds globally divided by 39 billion circulating coins, but the actual figure as stated by Brad Garlinghouse is $27 trillion in nostro, so that $589 calculation is nothing more than an urban legend.

EDIT: So I've been straight pwned on the above bold statement. I was pointed to Ripple's Gupta reference of $23 trillion parked in nostro accounts. This, divided by 39 billion circulating coins, results in.... $589. So, I'll have to concede that this has merit in explaining where BearableGuy's infamous $589+ came from. I am literally blown away that it's such a good fit for both theories (Cobalt atomic weight, and this calc).

However, this does NOTHING to change my prediction that $589 EOY is insane. This spastically simplistic calculation means absolutely nothing. I know people are going to scream, "But if you turn all the nostro money into XRP, that's how much it would be worth!!! Are you f-in STUPID!!" Doink! Even just playing out such a ridiculous assumption, do you really expect all nostro accounts in the world to be converted to XRP by EOY?? Really? Really really?

Listen up. First of all, the point of Ripple and ODL (On-Demand Liquidity), is to FREE UP nostro funds, for other purposes; that's a large part of the savings Ripple can bring to banks. Turning all this money into XRP instead, to perform the same function of nostro, DOESN'T FREE IT UP! ODL exists precisely for this reason, so that banks can source XRP when they need it without requiring them to hold it as nostro/vostro. Therefore, the calculation makes no sense, because it would never happen.

Secondly, banks are horrifically risk averse. The very last thing they want to hold is large quantities of a highly volatile speculative asset. They will NEVER hold XRP, not until the day it outweighs most fiat. $589 is a fantasy by this interpretation.

There are others that claim Bearableguy further validated this as a literal prediction in a subsequent tweet/post. I do recall reading that exact message, and I still interpreted it as a riddle, not literal. (if you have the link, please let me know so I can put it here)

A lot of people don't understand that a coin's potential is not infinite. Demand has to be greater than supply for the price to continue climbing. In the beginning, there was a lot more demand and so we've experienced some parabolic price increases. Now that XRP and the market as a whole has completed the introduction phase, there are a lot of early adopters with a shit-ton of XRP, and they all want their lambos and yachts now. This cashout will continue for quite some time, providing ample XRP supply on the market, which will continue to drag on the price until they've all been fed.

Millions upon millions of dollars needs to be taken from new investors and passed to these hungry early-adopters, before any price increase will be possible. Whether Bearableguy was being literal or not, @WietseWind's fantastic charts clearly shows that before we could ever get to $589, there would be about 150,000 millionaires that would likely take all the incoming money, and I'm talking about REAL money, not imaginary MARKET CAP money. This incredible drain on inflows will prevent any likelihood of a sustainable massive price spike in the near future.

Often you will also hear people cite the number of new millionaires minted in the west every single year (e.g. 700,000 in 2017), so 150,000 shouldn't be a big deal. Well, yes, if all the west's economy was funneling through XRP, then it would probably have the same effect, but we don't have the entire economy funneling through XRP, do we? And the parallel doesn't even work because most of these millionaires were 'almost' millionaires in 2016. It might only have taken a couple million in total to push them all over the line. It's not the same as they all together suddenly made a total of $700 billion dollars in one year, and yet that is 'exactly' what would need to happen if an XRP millionaire cashed out; all of that money transferred at once. HUGE difference.

Now I'm not saying $589 can't happen, eventually. I'm just saying it is mathematically impossible for that much money to move into XRP in the next 5 months. Put it out of your head. It's absolutely nutjob impossible. If you want to subscribe to outlandish but still mathematically possible predictions, at least stick with people that have their pulse on XRP's well-being, like Yoshi's famous tweet for $10 EOY. I even think that's pressing the limits of outer-space, but given it's Yoshi, and he can pretty much drive the price from his position of power, I'm curious to see where this goes.

$2000 by 2020 - WON'T HAPPEN

Take your tinfoil hat off. Read the above again, same reasons apply.

SWIFT partnership with Ripple - WON'T HAPPEN (Edit - And now verified and further verified)

There was a time that this may have seemed a great strategy, even endorsed not so long ago by David Schwartz, but since then, Ripple has discovered they have no obstacles to bank adoption anyways. Why partner with SWIFT and share the spoils, if they can just directly sell their products to the banks SWIFT works with?

There's no benefit for Ripple to join forces with SWIFT. It wouldn't accelerate the adoption process, because SWIFT can't 'push' their customers to use RippleNet, nor does SWIFT have exclusivity arrangements with these banks that would preclude Ripple from having them as their customers as well. Quite easily, Ripple can approach any and all of SWIFT's partner banks, and integrate them into RippleNet with no resistance from SWIFT. The illusion is that SWIFT has this pile of connections to banks that are kept a secret and that Ripple would love to get their hands on it, but the reality is, all these banks are known, and most of these banks already are interested in Ripple, if not already proactively pursuing a relationship with Ripple.

Many people profess that Ripple could just plug in their software into SWIFT itself, and voila!, everybody's now using XRP! Doesn't work like that. This approach means all the member banks would still be using the old SWIFT interface to connect to SWIFT. Then SWIFT would convert that cumbersome request to xCurrent/ODL, and then on the receiving side, SWIFT would have to convert the xCurrent/ODL transaction back to SWIFT format, and then the recipient bank would receive the payment via their SWIFT interface.

This makes no more sense than putting a piece of gold in a horse's saddle, taking the horse out of the barn, taking the gold out of the saddle, flying it in a jet to the destination, and then putting it into the saddle of another horse, and walking the horse into its barn, and then taking the gold out of the saddle and giving it to the recipient. Why? Why would any bank want to pay to keep the behemoth of SWIFT alive, when they can just avoid all the damn horses, and just put and receive their money directly with the jet for a fraction of the price?


Then there's people that argue that SWIFT would just hook all their banks up to RippleNet directly... Then what the hell is SWIFT needed for?? It would take EXACTLY as long for that integration to occur with or without SWIFT's help. The adoption rate is technically bottlenecked, not relationship-dependent.

At best, SWIFT eventually admits defeat by 'partnering' with Ripple and assists in integrating their member banks into RippleNet, but there's no benefit to SWIFT because it will in essence be completely destroyed by this action, not a partnership in any mutually-beneficial sense. Ripple's product is to save banks as much money as possible, and most of that savings comes from NOT supporting SWIFT's infrastructure. To try to keep SWIFT alive by integrating Ripple, destroys the point of Ripple!

A 3rd party Rippled amendment gets voted in by validators despite Ripple's objections - WON'T HAPPEN

Very heated topic, not even sure why, but I'd say that no matter how technically possible it is for anyone to submit an amendment to the Rippled software for the validators to vote on, there will never be an amendment passed that Ripple opposes, simply because of the nature of software development.

This isn't to say a 3rd party won't successfully introduce an amendment that is adopted, but the ONLY way that would happen is if Ripple endorsed and incorporated said change. However, as long as Ripple the company is healthy and respected, there will never be an amendment passed by the validators that Ripple disagrees with. End of story. It's not even just political, there are profound technical implications to making amendments that cannot be obscured or neglected. Even the smallest change has the potential to completely derail Ripple's long-term strategy.

The analogy would be this: imagine you're an architect building a 50-story skyscraper for your very rich client. You're halfway finished, and then some other dumbshit architect manages to talk your client into putting an olympic-sized swimming pool on the 25th floor of your building! You didn't plan for that obviously, the weight would crush the building, plus it's wider than the building and would be sticking out on all sides. Preposterous! But the other architect has no idea about the impact, and the client only sees the benefits of having the pool without understanding the consequences. So you have a meeting with the client, explaining to them that this is a very bad idea. It will simply break all the current and future designs.

If Ripple says no to an amendment, the validators will vote no out of fear of the consequences of defying the warnings from Ripple. I'll bet there won't ever be an amendment passed that Ripple strongly disagrees with, ever. I'm not losing sleep over this prediction at all.

You might ask, why have the amendment process at all then? It's there as a safeguard in case Ripple has issues that prevent it from further contributing to the codebase, or they lose favor among the validators. In the short term however, many years at least, it seems Ripple is a sparkling diamond and the bulk of the code will come from them.

The consequences of this unfortunately, are that it creates a FUD-point for the trolls, who can meaningfully claim that Ripple controls the source code, and label it centralized because of this. It's pure ignorance of course, because a couple dozen people control Bitcoin's source code, and of course Vitalek presumably has his eyes pass over all approved Ethereum code. What makes this FUD even more ridiculous is trying to imagine what a decentralized codebase could be. Can anybody just do anything to the code and have it published? Does the whole world vote on proposed code changes? Ya, that sounds workable. So, if something can't be decentralized, then you can't call it centralized.

XRP replacing SDRs in the near future - WON'T HAPPEN (EDIT Oct 8, 2018: I'm right based on this)

For those of you that have no idea what this is, read this link. As the article says, SDRs aren't a currency per se, despite being trade-able like one, but because of the agreements between International Monetary Fund (IMF) countries, SDRs are designed to act more as an insurance policy against fiat collapse. The IMF requires members to hold a minimum reserve of SDR's such that in times of economic crisis, they'll be able to convert SDRs to a different more viable currency, and still be able to operate.

There's been plenty of talk about XRP replacing the function of SDRs, but that fails in understanding what makes an SDR an SDR. SDRs are an 'equalizer' over all IMF member currencies, so they will always hold some value, regardless of how poorly any one of those currencies may perform. XRP, on the other hand, is not an equalizer, and has it's own value set independently by market forces. In other words, SDRs can never be worthless, but XRP can be, thus XRP cannot replace SDRs.

Now, over time, as XRP's potential grows, and market penetration becomes global, yes, then it starts to take on the same equalization characteristics as the SDRs, but that is a very late in the game evolution. Before that conversation can even be had, XRP has to have ubiquitous global adoption so it's stable, and it also has to go through considerable technological evolution because even with Cobalt, 50,000 transactions per second is still insufficient on a world stage when taking into consideration the Internet-of-things, retail, remittances, streaming payments, cross-border transfers, etc., all multiplied by Jevons paradox. XRP is just a baby today. When it's ready to take on the role of SDRs, it will be considerably different than it is today, and worth a fuckload more.

This isn't to be confused with XRP becoming one of the reserve currencies that SDRs can be redeemed for. That's not remotely the same thing as replacing SDRs altogether. Though still not mature enough, XRP can technically become an IMF reserve currency at any time because the risk only presents itself at the time of redemption, so the decision to utilize XRP can be made from current factors. This may be a likely scenario, but replacing SDRs any time in the near future, is not.

XRP ledger becomes officially decentralized - WILL HAPPEN (And it did, Aug 2018)

Keep your finger on this pulse. Ripple is already technically below the 80% dominance required to unilaterally make changes to the ledger, but in the eyes of the world, the magic number is below 50% dominance. It doesn't matter how technically inconsequential that is to those in-the-know, the never-ending saga of Ripple's ledger being castigated as centralized will only see a reprieve when the rest of the luddite-filled world sees less than 50%, and we're almost there.

Should be there quite soon, and then we can celebrate the fact that Ripple did exactly what they promised, they created the world's best truly-decentralized asset, by far. Despite all the risks of needing to trust Ripple from the progenitor stage right up until this epic moment, they were the perfect stewards for the maturing XRP ledger till they could successfully pass the torch to the rest of the world. XRP is all grown up. This of course, leads to..

SEC declares XRP a non-security - WILL HAPPEN

Lots of discussion about why the SEC has yet to declare XRP a security or not. I draw only one conclusion from this glaring lack of clarification, XRP is currently a security. Two reasons I see for this:

  • Almost certainly the historical profit-taking of selling XRP by Ripple
  • Lack of decentralization of the XRP ledger

When the SEC proclaimed both Bitcoin and Ethereum as non-securities, their primary requirements were decentralization and no clear expectation of profit. Over and over and over they repeated these factors, so without a doubt, that focused Ripple to figure out how to get over these hurdles.

The fact that the SEC hasn't passed a judgement on XRP yet, shows me that they are giving Ripple the time needed to transition XRP to a non-security. Ripple is attempting to accomplish this by both the above-mentioned decentralization efforts, and by sharply reducing their XRP sales as reported in the 2nd Quarter 2018 report.

Some would argue, "XRP doesn't pay dividends, and you're not a shareholder in the company, so it's not a security". That's like saying you're not a speeder because you don't pay your speeding tickets. Those consequences would present themselves upon being classified as a security, they're not requirements to be classified as one. Another argument is "XRP will survive even if Ripple disappears". No shit, but that only means it wouldn't be a security any more. Lots of wagging the dog by the tail going on here.

So what would happen if XRP was classified as a security? Well, forget about using XRP as a cross-border payment solution, for the same reasons you can't buy quality porn with shares of IBM. Securities are heavily-laden with regulations, taxes, reporting, etc. It's nightmarish. All that liquidity would dry up instantly, and it would become worthless.

But fear not, I've heard anecdotally that David Schwartz has said (citation please) Ripple would destroy all their escrowed XRP (which is possible apparently) should the SEC push the issue, which would immediately resolve any security designation, and XRP would be saved, and presumably would even enormously benefit from the sudden shock of 60 billion coins insta-burning.

Sure, this would really hurt Ripple's gameplan, but even without Ripple driving adoption, XRP has more stank in the tank than all other coins combined. It's destiny as the world's best cryptocurrency cannot be stopped.

ODL production release and subsequent adoption - WILL HAPPEN

Brad Garlinghouse has said banks WILL USE XRP! Slow and small transfers at first, (because they don't want to blow up the price and pay all that slippage to make us all millionaires) but the adoption will steadily increase. When Brad speaks, I want you to imagine the future flowing out of his mouth, because he's the one person IN THE WHOLE FUCKING WORLD, that knows exactly exactly what's coming down the pipe. There's been many projects we've come to hear about (Moneygram, WU, etc.) that have been in the pipe for at least a year, or more, and now he's telling us that within a year's time, we'll have clear banking customers using ODL. Brad is literally telling us, "I'm not guessing, I'm fucking telling you, ODL is going live in banks, so all you haters out there can chew on deez nuts".. or something like that.

XRP Decoupling and Flippening to top market dominance - WILL HAPPEN

Already called these events in prior blogs, so won't repeat myself. I have no idea when, and don't be fooled by any Bitcoin price recovery, it's only important to watch the relevant faltering Bitcoin datapoints of market dominance and global node count that continue to degrade every single day. Poor Bitcoin, sad sack of shit.

Defections from other coin camps into the XRP camp - WILL HAPPEN

Nothing breeds contempt like losing all your money. You can be a fervent bitcoin maximalist all you want, but slowly and surely, the attrition of starvation will make anyone think twice about their loyalties. The brain-drain from the Bitcoin-camp to the XRP-camp has not gone unnoticed; the typical conversation with a bitcoin maxi has over time become so degenerate, childish, and baseless, that it borders on comical. Truly, nobody who has done any meaningful research, has been able to overlook the stark performance differences between Bitcoin and XRP, nor can they overlook the professional magnificence of Ripple the company, versus a littany of Bitcoin trolls and hacks.

To draw a line, XRP is the smart money, Bitcoin is the fad. That being said, you'll see more of these Bitcoin trolls defecting from Bitcoin into the XRP-space, so I expect the XRPCommunity will be quite busy helping to onboard and educate. Even Roger Ver, and Weiss Ratings, and occasionally a ray of light from @cryptomanran shows that time is the antidote to the ceaseless FUD and fake-news campaigns. Speaking of which..

Fake news continues to come up with even STUPIDER FUD - - WILL HAPPEN

I swear I have PTSD from all this FUD bullshit. I wake up every morning loathing checking my Twitter feed because I just know some mental defect douchebag is going to come up with yet another impossibly insane twist on a meaningless datapoint and turn it into a senseless bash against XRP. It's too fast, lost blocks, freeze your funds, AUGH! It gives me so much anxiety knowing that my OCD won't allow it to fester unanswered. Thanks for ruining another night of sleep, Tushar... asshole.

I know everyone is highly polarized on a lot of these topics, probably ready to claw my eyes out, lol. Tough shit. Make your own predictions and let's see how it plays out. Credibility is best served to those that see what others can't, and only father time can pin that medal.

Comments welcome on Twitter (No tips please!)

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