It makes me chuckle a bit when I see people comparing cryptocurrencies by their prices. Thinking that a crypto that costs only $0.01 is somewhat cheaper and has more potential than a crypto which costs $10.
A recent example that I witnessed was people expecting Ripple to reach $50.
Let's do some calculations what kind of growth Ripple should experience to achieve such a thing. Right now one XRP costs $0.22, but for easier calculations, we will round it down to $0.2. The market cap is around $8,5 billion and there's a circulating supply of 38,343,841,883.
So, to reach $50 per coin let's do the calculations.
Price * token supply = market cap.
50 * 38,343,841,883 = $1 917 192 094 150
If we would compare to the market cap of Bitcoin which is $75,064,008,033. That means Ripple would be 25 times bigger than Bitcoin and that would be 22 500% growth for Ripple.
I'm not saying that Ripple can't reach this, but it's so highly unlikely just because the supply of tokens is so big. I believe it will take at least another decade to see such growth if Ripple continues to grow and becomes the main method of transferring money from bank to bank.
If we would like to compare Ripple to Bitcoin we could give Ripple the same token supply and see how it would compare.
So, if we divide 8 500 000 000/ 16,541,100 (BTC supply) = $513. This means Ripple is at the same level Bitcoin was in June 2016.
This is how you should be comparing cryptocurrencies. The price is only a convenient way to compare how the value of an asset has grown in time, but it can't be used to compare different assets. Market cap is the main thing you should be looking at to evaluate how good is an asset performing compared in the market.
Sėkmės :)
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Ačiū :)
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upvoted & resteemed, cheers! @steemitlietuva
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Thank you :)
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It is rather amusing that people think because a coin is worth a few pennies now that it has the potential to duplicate what BTC has done. Coin count plays a huge roll in determining the market cap. Ripple is never getting to a trillion dollar market cap haha. Nice easy explanation you gave
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They can duplicate, but they are expecting the price to go as high as BTC :DD
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Thanks for sharing mate. I learned something:-) upvoted!
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Thank you :)
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