Bitcoin Forum

I'm beginning to wrap my head around Ripple a little bit and I have some questions.

1. Let's say I own a gun shop and I want to create IOU's based on the most popular bullet sold in my store.  They send me cash and I issue 9MM's-BITACCUMLATION (or whatever they'll be called).  Every one can pick up their bullets on demand from the store during work hours or have them shipped to their home for the cost of postage and delivery.  Would this be a good application of Ripple and what would be the exact procedure to go about this within the Ripple client?    This same procedure could be repeated with other items like gold, silver, etc. - yes?

2. If I am getting this right Ripple is a transaction ledger for RECEIPTS (IOUs).  Yes?  Receipts or IOU money was necessary in the past because it was a pain in the ass and dangerous to keep large amounts of commodities on your person or in your house so you entrusted it to a bank in return for an IOU.  These IOUS circulated.  This bank would have a big ass safe and lots of security to keep your commodity safe.   However, with the creation of Bitcoin, the commodity and safe come in one package, so technically the need for IOUs and banks becomes unnecessary.  This is one of the best things about Bitcoin.  The removal of needing trusted intermediaries that can rob you blind.  So how exactly does this system compliment Bitcoin?  And how is moving BACK towards a trust based system useful?

The problem I have with Ripple is that University-educated people need a long time before they begin to understand how it works. How can it hope to become popular?

Good questions OP, I'm subscribing with the hope someone more knowledgeable will answer them.

This does seem to be an issue.

Lots of hoops to jump through.   You need to get a foreign currency (ripples) to get your account to work.  You need to understand how currency trading works (there is no simply mechanism to buy things).    Not much is intuitive in the interface (although it is pretty slick from my point of view).   Also, they keep using IOUs as their way of explaining things.  They should make a simple analogy (like I did above with the banks issuing notes on hard currency like gold).  Then they should create a simple analogy so people can understand where these ripple things fit into this system other than being a tax.

Maybe it will be a platform that people can build simpler applications on top of it?

That was always a big issue with Bitcoin.   The thing that has made more widespread adoption possible is Coinbase.  People like to be able to do something in the simplest way possible (ie - deposit money like they do in Paypal and be able to buy stuff and Coinbase fulfills that type of role).

These type of things will always start with the more hardcore folk though, which is why they are starting on the Bitcoin forums (I'm assuming).  

I think it could be real useful if there were lots of liquid markets available to trade.  However, having to open an account with an exchange, so that you can then exchange in another interface, is certainly another layer of complication that will never appeal to the average Joe user.

More on the complication part...

When I wanted to set up an account, I realized I needed XRP in order to do anything.   Naturally I came here to see what I could do and saw they were doing a free giveaway of XRP see: https://bitcointalk.org/index.php?topic=145506.0

I have been a member here since 2011 but always lurked so I didn't have the minimum number of posts, so I emailed one of the OpenCoin people to see if I could get some XRP to start.   He sent me a link to a place where I could buy them.   I went to said link and ended up buying 100,000 for 2.3 BTC thinking that this must be a reasonable deal or the employee of Opencoin would not have sent me there.

Now with my ripple in my account, I began messing around and decided to see if I could buy some ripple directly within the interface (I could).   It was then that I realized that I could buy (instantly) 100,000 XRP for 1 BTC.   Needless to say this did not make me feel very warm and fuzzy about being sent to the place that charged me 2.3 BTC.  

The one good thing that happened so far because of this is that I got up enough posts that I can come out of lurking and start contributing some posts.   I also got to put in my Ripple address for the ripple giveaway.

I would feel better if one of the Open Coin people sent me another 130,000 ripples to make up for getting ripped off by the vendor I was referred to.  That would be cool. rNU4JR8bF4P3LTNHshD8UV6dkkUcvJqxUr

In any event,  this is a lot of work (and a quite a bit of frustration over spending the equivalent $182US more than market for ripple because I trusted the recommendation of an Opencoin employee) to have to go through to just get STARTED in the system.  A lot of work.  Plus I had to open an account at Bitstamp (I forgot that), since they are one of the only hubs right now.

How will this process be made easier in the future?   Maybe at this initial stage having people "beg" for XRP is a decent strategy to get early adopters but what is the long-term strategy?

I'm sorry you paid such high premium.

The going rate for BTCXRP on the internal market can be found here: http://bitcoincharts.com/markets/rippleXRP.html

Currently, the only web store I know to buy XRP for bitcoin is xrptrader.com.

Hopefully, your story will encourage competition and better pricing.

See this post by TTBit (https://bitcointalk.org/index.php?topic=149533.msg1588296#msg1588296) where he describes how he is doing something similar with DYM, pre-1965 silver US dimes.

Personally I think the negatives of trying to use one specific type of ammo as currency outweigh any benefit. Rather I'd think you'd just sell all your various types of ammo priced in whatever currencies make sense for you to accept; you'd then use Ripple to allow people to pay you that currency using whatever currencies/credit they have on Ripple (the same way you'd use Paypal as a merchant).

If you did want to do it anyway ...  [The following may seem complicated but if you replace "9MM via Ripple" with "USD via Paypal" it's the same level of complexity for what Paypal lets you do. Ripple lets you do more however and with less fees.] ...

You'd post somewhere (on the store website, here, where ever) what your redemption policy on "9MM" is (as you say above: in store or shipped; probably add that amounts need to be above a minimum and rounded off to whatever the ammo box size is, e.g. multiples of 24 or 50 or whatever, or make the unit "boxes of 9mm" rather than "rounds of 9mm"). This would act kind of like a gift card.

If someone sends you cash or pre-orders in-store a years supply of ammo you could directly send then "9MM" (via Ripple's "Send" interface). However if someone sends you cash they likely want you to send them the ammo and not IOUs; unless they want to trade or resell them or something. Again, this use would be kind of like a gift card.

If you want to directly accept currencies/IOUs traded/used on Ripple you can enter trade offers. For example, on the trading interface type in "9MM/BTC" (you need to type it in because 9MM is not a standard currency type). You select your ripple address as the 9MM issuer and you'd select some gateway as the BTC issuer (e.g. Bitstamp; you could enter multiple offers for multiple BTC issuers, perhaps even yourself) and enter in a SELL order at X rounds priced at Y BTC per round. [Since Y would probably be very small you'd likely flip this around and instead enter a BUY order for BTC/9MM for 1/Y rounds per BTC, the effect is identical; this is why BTC/XRP is used instead of XRP/BTC].

Anyone can now try to redeem/use/pay you "9MM". Lets say they go to your gun store's web page and enter an order form asking for X rounds. You list Ripple as a payment option and if selected you send them to a link (just like paypal works). The link includes your ripple address, an identifier, the amount+currency (X 9MM; but it could be Y USD or whatever). The user then gets the Ripple send interface to send X "9MM". Ripple finds whatever paths are available to the user and either says "no path" or says something like "you could send X 9MM or Y BTC or Z USD or # XRP" the user picks whatever available currency they hold to complete the payment. If they select a non-9MM currency Ripple automatically executes the appropriate trades (perhaps some third party is SELLing 9MM for EUR, this gives the user the ability to pay in EUR). Also note that within a currency Ripple will find paths through extended credit lines without needing trades. E.g. the person can pay in EUR buy redeeming some of their IOUs with the guy trading for 9MM and by owing someone else that had EUR the remainder, the paths can be complicated but the user just sees "pay # EUR ?".

If Joe Schmoe is at the range and "borrows" a box of X rounds from Fred; then Joe could record this debt by sending Fred X "9MM" on Ripple; this would be a 9MM IOU issued by Joe. By themselves they can't do anything with this IOU. However, Joe later trades some of his BTC for your 9MM IOU. Now Fred can send you 9MM to be redeemed for actual ammo (Ripple ripples the payment through Joe basically swapping the Joe-9MM for your 9MM IOUs) thus clearing the Joe's debt.

I recommend you read Ripple, or Bills of Exchange 2.0 (http://jpkoning.blogspot.ca/2013/02/ripple-or-bills-of-exchange-20.html). It might enlighten you on why an automated way of handing IOUs and making them usable/tradable/divisable without the issuer's intervention is not a step a backwards but instead cuts out a lot of what banks do for large fees.

Despite the clear advantages of Bitcoin, a small number of people still find it useful and necessary to transact in fiat currencies like dollars and Euros. Rather than seeing Ripple as a step backwards from Bitcoin, I would submit that you should see it as a step between fiat currencies and crypto-currencies -- a world in which they can coexist and seamlessly inter-operate.

Yes, transacting in fiat currencies will mean counter-party risk. But Ripple does many things to mitigate this risk. For example, issuers cannot freeze or modify balances. An issuer that refuses to redeem balances for one party can't stop them from exchanging their balance for a balance at another issuer. If an issuer refuses to redeem balances or delays them, the instantaneous value of their balances will show in the exchange, driving their customers away. And, of course, each user gets to choose their own issuers with numerous features to keep payments seamless and avoid default chains. (Payment chains exist only for the instant a payment is made.)

Ripple complements Bitcoin in many ways. For one thing, Ripple is becoming a convenient way to buy and sell Bitcoins. In addition, every merchant that accepts Ripple will be one more place you can buy things with Bitcoins. Ripple also offers a faster way to move Bitcoin balances between people and takes transactions off the blockchain.

Okay so ripple is good because there are barely any transaction fees.  It also allows you to issue your own currency which is the second plus.

Very cool, thanks for linking to that.

Say you owe me 0.01 btc. With the way btc prices are going, that could be for something like a coffee or whatever. You send me the btc, it has to sit in my bitcoin wallet for about 100 days before I can send it along without a transaction fee. If, instead, you send me that btc through Ripple, then I can send it along to its next home immediately.

There are still times when it makes more sense to use bitcoins, but ripple adds more flexibility to the whole system

This confuses me if the guy issuing DYMs refuses to send me my dimes on demand, how do I exchange those DYMs to another issuer.  Someone has to lose out on that transaction no?

And when you say "if an issuer refuses to redeem balances or delays them, the instantaneous value of their balances will show in the exchange."  I'm not sure what this means.  Can you give me an example?  I know you are saying it will be clear to everyone that someone is defaulting, I'm just not sure how that happens or what you mean by "their balances." (or where that can be found).

Nobody has to lose out. You trade those DYMs on the Ripple network for, say, USD from an issuer that is redeeming for you. Those DYMs either go to someone who owes something to the issuer they can cancel them against or someone who the issuer is still redeeming for. If the issuer just decides they won't redeem for you because there are too many vowels in your last name, you can just change issuers and/or currencies. So long as the balance itself retains value, you can trade it to someone who values it.

For most issuers, you can transact using their balances without having any formal relationship with them. You can just trade those balances for balances in other currencies or from other issuers when you wish to cash out. You can do this entirely implicitly. In the Ripple client, I can tell it to pay 5 Bitcoins to my Bitstamp account and if I hold sufficient DYMs, I'll get the option to pay with them. I can buy those DYMs for USD and hold them and never have any relationship with the guy who backs the DYMs. He doesn't even have to do business in my country. The fact that he generally reliably redeems for others is enough to give his balances value to me.

Right now, you can take USD from Bitstamp and freely interconvert it to USD from WeExchange on the Ripple network. The same is true for BTC. This is because a number of people hold balances from one issuer but are equally happy to hold a balance at the other issuer. This is because both issuers are reliable and trustworthy and it's more convenient for everyone to value them the same even if they could justify microscopic differences in value. (There are also people intentionally providing liquidity.)

Now, say an exchange were to stop redeeming Bitcoins for some reason. Maybe it's due to a technical problem. Maybe it's because they're broke. Whatever. Suddenly, people would prefer to have Bitcoins issued by WeExchange or Bitstamp rather than them. This will cause a cascade of network effects, all of which will be entirely visible. That is, the fact that an issuer's balances retain near enough to face value that people don't try to discount them acts as a market indicator that they are reliably redeeming generally. Any hiccups in their redemption that significantly affect people's ability to redeem will be visible and will hurt the gateway's bottom line. Nobody's going to send 5 Bitcoins to an issuer whose "5 BTC" balance isn't worth really, really close to 5 Bitcoins when they can instead send them to an issuer whose balances are valued at face value.

If a gateway wants to stay in business, they will need to make it a business objective to have their balances valued at face value by the market. Otherwise, they will not see any inflow.

People worry about PayPal freezing their balances or reversing payments. This is because PayPal can get away with doing this without it hurting them. But how much do you worry that PayPal will close their business entirely? They can't do this without losing all the value they've built as a business. So it's a much smaller risk, though it creates about the same harm to each customer. Ripple gateways can't really target individual customers, because those customers can just trade away their balances.

On the issue of exchanges and transactions...

How will this work in the current US legal framework?

Doesn't transacting in various currencies invoke Fincen and Securities and Exchange regulations?

I understand some of the exchanges might be licensed but once you are transacting inside of Ripple, could violations be occurring that could cause this concept not to work due to regulatory pressures or has this been thought out and accounted for?

Transacting inside Ripple should be okay.  Money isn't actually moving.  IOUs are moving.  BUT gateways need to follow correct rules and anti-laundering stuff.

IOUs are securities no?  There are three broad categories of securities - debt, equity and derivative.

I'm not a lawyer and not up on all the legal ramifications, but I am hoping the OpenCoin and its people have some answers to these type of concerns.  A regulatory attack would put a pretty big damper on a project like this.

The problem with this is that there is a fee for this in Ripple if you are using exchange IOUs (which is what most people will be using).

For small transactions, the Ripple transfer fee will be lower, because it's a percentage. For large transactions, the Bitcoin fee will be lower, because it's a fixed amount (or zero if you're patient).

How much Ripples / XRP's are needed for an account to do things? A minimum of 200 (?) is needed to start, but what is the use and value of having many more ripples? How many do you 'spend'(?) per transaction and where do they go? And yes, I also do have a university degree :)

Can you show us the pitch deck you gave to Andreesen?

You need 200 XRP to open an account. Those XRP aren't spent, they're just held on reserve (you can't transfer them) but you can use them to pay transaction fees.

There is an additional 50 XRP you must have on reserve for each object "charged" to your account. This would include offers to exchange currencies and pathways you permit to hold currencies for you. So if you want to have three offers at a time and trade in two currencies on two exchanges, you'd need an additional 350 XRP sitting in your account. These reserves are released when the object is destroyed, so if you cancel one offer and place another, the required reserve doesn't change.

The only time XRP is destroyed is for transaction fees. Currently, the standard transaction fee is 10 drops, or 100,000 transactions to the XRP. There may be more expensive transactions in the future, and the transaction fee will go up if system load increases.

For most people, we expect that 1,000 XRP would fund everything they would probably want to do with their account for many years. I believe you can currently get 1,000 XRP for somewhere around $1 or so. There will be more XRP giveaways too.

Transaction fees are destroyed -- they simply cease to exist. Transaction fees and reserve requirements can be changed by consensus.

[edit: I didn't see Joel's response when I wrote this, (stupid forum putting it on the next page) so I repeat much of what he said; oh well I'll leave it here anyway]


Depends on what you want to do with the account. Details are available at the Ripple wiki (https://ripple.com/wiki).

• You need 200 XRP in reserve to hold the account.
• You need 50 XRP in reserve for each trust line
• You need 50 XRP in reserve for each open trade offer
• You need 0.000010 XRP for each transaction (action that changes the ledger) (can be dynamically raised by the servers as an anti-spam measure)

The reserves (https://ripple.com/wiki/Reserves) do not come out of your XRP balance, they are just part of your balance you are not allowed to use for anything other than transaction costs.
The two 50 XRP reserves become un-reserved and usable again if you clear the trust line (set the trust to zero) or if the order is canceled of filled. Currently you can't destroy/delete your account so the 200 XRP account reserve can't be unreserved; although theoretically, if you did enough transactions (many millions), you could use up all your reserves and have 0 XRP.

So with, for example, just 450.1 XRP you can have a mix of five trust lines and open/outstanding trade offers. If you're mostly going to use a single gateway this might be sufficient. On the other hand my current required reserves are closer to 3000 (I have a higher than average number of trust lines to friends and a higher than average number of outstanding offers). The 0.1 extra in my 450.1 example lets you do 10000 transactions without going into your reserves. A transaction is anything that changes the ledger and includes:

• Adding, removing, or changing a trust line
• Adding or canceling a trade offer
• Sending a payment

The transaction fees are destroyed. The top of the Ripple Live Graph (https://ripple.com/graph) says "total ripples: 99,999,999,999.23055". There was an initial 100 billion XRP so 0.769450 XRP has been destroyed so far.


You can send Ripples to any other Ripple user without needing a trusted path or gateway. For this reason some people may ask for payments in XRP.
Since Ripple supports any number of currencies it can be difficult with trade offers for someone to provide currency arbitrage (https://en.wikipedia.org/wiki/Triangular_arbitrage) between many currencies, they can use trades to/from XRP for each currency to facilitate arbitrage across many currencies (https://ripple.com/wiki/Arbitrage#Scaling_Cross_Currency_Arbitrage); this would require extra XRP be available in their account to cover the trades.
Occasionally a very good trade price for something comes up (just today the BTC/XRP was nice and low and lagged the rebounding BTC/USD prices at exchanges) and having spare XRP hanging around means you can take advantage of such offers without liquidating other currencies you may be holding.

Thank you JoelKatz & dchapes, much appreciated.

I have some ripples and some BTC in my Ripple wallet and have traded back and forth.
I see how I can receive, send and trade Ripples, but how do I remove/withdraw the BTC from my Ripple account to my local wallet?

Sign up with an account at Bitstamp or WeExchange (preferably the one who issued the BTC you hold, if possible) and select Ripple under their deposit options. This will let you deposit Bitcoins into your Bitstamp or WeExchange accounts from Ripple. Once the Bitcoins are in your account with the gateway, you can select Bitcoin under their Withdraw options and this will let you withdraw them to a Bitcoin account.

I just want to point out here how easy this is (people seem to be taking crap offers for their XRP because maybe they think it's hard or expensive to get bitcoin out of Ripple?).
Both WeExchange (http://weexchange.co/) and Bitstamp (http://bitstamp.net) allow for a quick and easy account signup only requiring a valid e-mail address (for unverified accounts). Both charge no fee for the Ripple to gateway "deposit" (as they call in on their websites) (as Joel says, the fee is zero only if you use the gateway matching the BTC you hold in ripple, otherwise there is ~0.7% fee to switch them) and both send the bitcoin to any bitcoin address without any fee. WeExchange does however require a minimum send of 0.1 BTC (don't know about Bitstamp).

Thanks again both of you. Even with the hand-holding it was difficult as it is so counter-intuitive to send BTC to a Ripple account/address. That is what confused me all the time and I am sure I am not the only one.
I can't see why a Ripple wallet that can hold BTC could not just send those BTC to any BTC address (without going through Bitstamp etc again)?

The Ripple wallet doesn't really hold BTC. It holds the fact that Bitstamp (or whoever) owes you BTC. You have to go through Bitstamp because Bitstamp is holding your BTC. We do plan to integrate gateways of all kinds (including inbound and outbound Bitcoin gateways) into the client. So you'll still be doing the same thing, but you'll be doing it in one step right from the Ripple client.

Is this somehow visible on a software/protocol level or such tool is yet to be built?

There are actually several different ways you can see this. One would be to look at exchange rates to some common currency. For example, let's say Bytestash/BTC was trading at 80,000 XRP to the BTC while MeExchange/BTC was trading at 120,000 XRP to the BTC. Assuming both prices are reasonably stable and there's adequate market depth, that indicates that for some reason people are valuing MeExchange/BTC much more than Bytestash/BTC. Of course, there's basically no logical reason for that unless Bytestash is not redeeming BTC reliably.

Another way would be to look at how much a payment costs. Say someone wants 10 BTC and you decide to pay them with Ripple. Say you hold MeExchange/BTC. If the client tells you that you need to pay 14 BTC to make the payment, that means that your "10 BTC" from MeExchange is not actually being valued by the recipient (more precisely, the combination of paths through the network to the recipient) at 10 BTC, indicating that MeExchange is probably not redeeming reliably. (Or that one recipient might have bad paths. But if it happens on many recipients, that points to a problem with your gateway.)

If a gateway wants to stay in business, people will have to be able to use their balances with that gateway to make payments at very, very close to face value. And they'll expect to see exchange rates that reflect the face value of their balances. If not, others will devalue their balances and this will immediately hurt their customers, which they will likely lose.

Nobody wants to give $1,000 to a gateway and get a balance that purports to be "1,000 USD" but won't spend like the cash they traded to get it!

Will it work the same for minor gateways?  Say, I'd like to run a ripple gateway specifically for developers in my company - I doubt there would be much trading of 42cc/BTC


Aha, so client has ways to calculate the expected transaction costs.  Or, more precisely, is it done by rippled?


s/gateway/bank/ and you'll get what we have now with the fiat currencies :) :(

Most likely, to successfully operate a minor gateway, you'll have to make it your business to ensure liquidity to the same currency from a major gateway. So, for example, if you want to be a minor USD gateway, you'll probably try to have a 1-to-1 (or .995 to 1 or whatever) offer available to trade your balances for balances at, say, Bitstamp. That means you'll have to keep cash on deposit at a gateway to "back" your balances.

Over time, as your reliability is proven, people may not bother taking you up on that offer very much. If you provide your offer at 0.995 to 1, someone else may provide an offer at 0.997 to 1 and make some money on the arbitrage.

Correct. The server scans the balances the user holds and the pathways and exchanges in the Ripple network and computes the cheapest paths for each currency the user holds. (Heuristically, it is not perfect.) When the transaction is formed, a set of "best discovered paths" is included. When the transaction is executed, funds can go through more than one of the included paths to get the very best exchange offers, even switching exchanges, available at that moment.

Yes. Ripple is like a cross between Bitcoin and conventional banking. We do unfortunately get some of the downsides of fiat currencies and conventional banking. But lots of people do seem to find them useful, so we can't all move forward to the obviously superior crypto-currencies yet.

 Ok, thanks Joel.  Can't wait to get my hands over rippled ::)

I do believe you can sell your DYM to another Ripple member. There is a secondary market...I think.

It looks like someone is intentionally maintaining liquidity between TTBit's DYMs and USD at Bitstamp. It's possible that it's TTBit himself because he understands that the less you have to trust him to use his service, the more people will use it. If you want to cash out DYMs and don't want to deal with TTBit, you can cash out USD.

Presumably, if TTBit were to go out of business or have all his dimes stolen, this exchange path would rapidly dry up. But so long as his business is healthy, there is likely to be liquidity in the Ripple network for his balances. You don't have to worry much about TTBit targeting you specifically except for amounts in the process of being redeemed. You do have to worry about the health of his business as a whole, but you can judge that at any time just by looking at whether his balances are liquid. Now, they are.

Thanks JoelKatz.

I am in love with the DYM's and would not sell it for US dollars.

I am new with Ripple but I suspect with the internal trading features, (Once you have 300 Ripples) that you could make an offer to buy DYM with XRP's.

Again I could be wrong. I am also biased because I think the DYM idea is brilliance.

Well I am wrong about that.

Darn.

Yes, you can. You can pick a particular currency pair and place or take offers.

You can also create a DYM pathway and then just make a payment to yourself of, say, some number of DYMs and click the 'XRP' payment button. That can take from combinations of exchanges and pathways to get a better deal, if there is one.

Good information.

Okay on advanced I go to trade.

Then...    Base currency
    XRP

    Counter currency
    DYM 

Then it says Counter currency issuer (DYM)
Contact name or rijavascript:void(0);pple address.

If this is an offer to buy what would I put there? TTBit issued the currency but I want to post an offer to buy to from anyone.

I have never used the internal trading. (Waiting on by TT to clear)

I am not sure how to make a pathway. But thank you for giving me something more to learn and figure out.  ;D

First, add TTBit to your contacts. Then under advanced/trust, allow TTBit to hold DYMs for you up to some amount.

You can now just make a payment to yourself of, say, 2 DYMs. You will be given the option to pay with any currency you hold enough of that has sufficient liquidity. (You actually have to paste in your own Ripple address as the destination.)

To place or take an offer to buy DYMs directly, go to the trading section and choose the two currencies the offer will be between. You want DYM/XRP (you can type it in, you don't have to use the pulldown). When it asks for the DYM issuer, enter TTBit and select it. This doesn't mean you want to buy from TTBit, it means you want to buy TTBits DYMs from someone. You can then see the order book (by clicking 'Order Book' at the bottom).

To buy DYMs click 'Buy DYM' if it's not already selected. Then fill in any two of the amount of DYMs to buy, how many XRP to pay for each one, or the total XRP value. Click 'Place Order'. If your offer crosses an existing offer or offers in the other direction, it will fill (or partially fill) immediately. You can always cancel the unfilled portion of the order by clicking 'My Orders' and hitting the cancel button.

For some reason right now, the direct liquidity of XRP to DYM is not great. You'll probably do better paying yourself DYMs.

Thanks JoelKatz,

I was asking just as an example.

I said XRP to DYM's  because that is all I have in my Ripple account right now. Walking through the possess was helpful.

Hopefully in the next day or so my account will be loaded and ready to go.

I really appreciate you sharing your knowledge. Finally some of this is making sense. ;D

When you make a payment to yourself of DYMs (as an example) if there are no people selling DYMs on the market, will it automatically create a new IOU and create an obligation on the issuer of DYMs or does the issuer have to approve the transaction? 

There's no way it could create any such obligation -- what exchange rate would it use? If an issuer wants to sell his IOUs on the market, he has to create an offer to do so at a particular exchange rate in exchange for something in particular. His can sell an unlimited quantity of his own IOUs if he wants, but he has to set the exchange rate.