Bitcoin Forum

My opinion on Ripple is that it's not needed. When you lend bitcoins or fiat, you are also creating debt out of thin air, and when the debt is repaid, it vanishes. Sure a system that allows you to lend/borrow bitcoins based on reputation might have it's use but such system does not need it's own kind of currency like ripple. The market value of ripples is crashing and for good reason I believe. Litecoin shares the same faith in my opinion. I remember a book I read at the time from Sony or Philips and there the mantra is, a new technology needs to have at least 7 big innovations for it to have a chance to succeed. Bitcoin has that over fiat and gold, Litecoin does not have that over bitcoin. Litecoin is a copycat with very few innovations over bitcoin. In a network environment where the value comes from the amount of participants, copycats do not have a chance.

From an investor's perspective the altcoins are like low end real estate. In a real estate boom it goes up even more than quality real estate, but it loses much more value when the inevitable crash comes. And chances are that it will never recover but will be bulldozered down, as no one needs it anymore. Whereas the quality real estate, although highly undervalued, will continue to stand as there continues to be a need for it. I might be totally wrong so counterarguments are very welcome.


Ps: Also note that the analogy made for litecoin that it is silver versus bitcoin gold is not valid. When gold was money, there was not enough of it, so silver was also used as money. There are enough bitcoins to serve the whole world.

Really now? That would only be true for a largescale adoption is BTC price was in the millions. Of course, 'early adopters' would be happy, but little sally would have to be content with her $1 satashi.

Debt, lending, creating out of thin air? Don't deal with those gateways. The gateway dividendrippler.com backs all IOUs with specie BTC/LTC/TRC 1:1 ratio. No BTC are created. While not supported yet, we can easily prove we control all BTC/LTC/TRC and the amount of IOUs are public information. It would be 1:1 ratio at all times.


Why does one need ripple?

What if you trust Bitstamp or DividendRippler more than the guy paying you in BTC? No need to wait for confirms, as all IOUs have gone through the process of confirmation.

Think how exchanges work: Bitstamp, MtGox, Btc-e, etc.. All have their own trading software, their own matching algos, and their own IOU system in place. All have their own rules for depositing and withdrawing. Little redundant, dont you think? Why not have a decentralized system that everyone can use? Now you only need a gateway to specialize in accepting and redeeming IOUs.

Uhmm.

7000 accounts on ripple.com right now. Yesterday when I checked they were 6700. (Source: ripplecharts.com)
Doesn't look to me like they are dying. Not yet at the very least. If that's a bubble it's still expanding not collapsing.

Little sally is perfectly happy with her $1 today too. Or what's the smallest $ today?

This is the altcoin subforum so I am not expecting balanced opinions on replies, but I want to expound a bit on the "copycats do not have a chance" thing.

The way I look at it is, that the digital currency world is actually much more cruel than that of PMs， as there is an inherent risk associated with copying Bitcoin's model of blockchain-you need to survive at the mercy of the Bitcoin network, some Bitcoiners can conduct a 51% attack on your network either with their big GPU farms or through botnets if they really feel the need to protect their stash, the most powerful network always wins, and the smaller ones could fail because no one will be interested in a unusable network.

As for Ripple, it's essentially a centralized network, and if I want to process my transaction centrally, I would rather go to some certified pros to do it in a legally enforceable way.

I don't understand. I'm sorry.

That's another problem of ripple: complicated.

Please explain like I am a 5 year old.

I was referring to the value of the ripple currency.

Thanks for sharing that the amount of accounts is expanding rapidly.

From a critical perspective though it's very low considering the amount of exposure it has had on bitcoin forum and reddit.

In contrast to Litecoin, Ripple looks to me deadborn as the numbers you quote are negligible.

So I'm thinking, most also don't get it, like me.

Again, I might be totally wrong. Just my impressions.

Crashing as in "rocketing up big time" (https://ripplecharts.com/market/XRP/BTC:Bitstamp) you mean?

Litecoin has value over and above bitcoin because transfers are faster. In fact, there isn't really a reason for bitcoin to exist (sacrilege I know) once litecoin becomes mainstream, because it's the same but slower.

Feathercoin, CHNCoin etc offer no benefit over litecoin, however...

As far as I know, this is a misconception of how blockchain works. Correct me if I'm wrong.

edit: Litecoin block-rate is 2.5 minutes on average. My point is: Try to make successfull double-spend on Bitcoin network after 2.5 minutes. (excl. "dust" outputs)

What it boils down to at the end of the day is that there needs to be a fairly standardised and easy to use interface to allow goods to be purchased electronically using altcoins (either one type or a combination of several in one payment) and be able to convert them into fiat at the merchant end fairly quickly to pay suppliers, rent and so forth, or else all cryptocurrencies will become follies. Whether that be Ripple or something else coming up on the horizon, something will be needed and soon. No interface = GAME OVER.

iPhone and iPad are both copycats. Enough said.

Litecoin isn't governed by "the Foundation" therefore it has something that Bitcoin doesn't.

It's the value of Bitcoin that is crashing.
Last week 20,000 xrp could buy 1 bitcoin, now you need less than 10,000 - the value of xrp has doubled against bitcoin.
You need to swap the axes.

(NB - I think these prices are completely irrational  - 7000 people trading their gifted xrp ignoring the other 99.7billion yet to be released to the public).

But Ripple isn't worthless.

I told you XRP gonna take off.

1 BTC is currently worth between 8750 and 5000 XRP. No end in sight....

Did you even read my post? Please try to refute the argument.

Oeps, thanks for correcting.

Still my argument stands. The market is also valuing Litecoin mostly up until now.

Copycats, as in copying a successful product?

If yes, what successful product did they copy?

Good arguments. Thanks for adding these.

And the argument is?

It doesn't matter if the vast majority of it is in the hands of opencoin, it's the same effect with BTC/LTC/Whatevercoin and early miners.

And since it is truly deflationary it will replace BTC as a speculative asset.
Added to this is it is professionally implemented, fully accessible in the web-browser. That goes a long way in our times.

And most importantly it's gonna stay valuable even when Bitcoin plunges to irrelevancy since it neither based on it's source code nor a 'coin' as such.

Translation: "I have more Litecoins than Bitcoins."
LOL  :D

I think that Ripple is here to stay and it has a bright future. Though probably XRP is a bit overpriced currently, but they don't claim it to be a store of value anyway, they say it is just the means to prevent transaction spam, so its price doesn't really mean anything (I expect it to fluctuate a lot due to giveaways, media attention, technical problems, etc).

XRP is as "overpriced" as BTC was in early 2011 when it went to almost dollar parity.

It appears you never really knew Ripple or Litecoin, and you wanted to say bye without even meeting them?

Maybe you are right.

I say that it is overpriced because:
1) its supply is potentially ~4762 times higher than Bitcoin's, and it is not clear how it will be distributed among users, and the issuer claims that XRP is not a currency, it is not intended for investment, it is just a mean to prevent spam.
2) it took 4 years for Bitcoin to reach its current value, there is strong community and infrastructure, it proved itself viable in wild but still requires much much development... whereas Ripple's sources are not published yet and it lives in controlled environment, and of course much less adopted than bitcoin

So I think 4-5K XRP/BTC rate could be a valid long-term goal... But looks like current price doesn't consider risks, it is probably just a result of the short term shortage of ripples, that can be caused by speculation (and can be easily solved anytime by OpenCoin).

Perfectly right. But the bitcoiners intelligible argument is that sally's coin can be divided into a billion subcoins. What a relief for sally. (what economic problem can not be solved by decimals?)

Not today

Hopefully ;)

Regarding ripple, I'm not a fan of large scale handouts and IOUs.  Sounds like the US government to me.

Ripple is a joke, please do not compare it to Litecoin, it really just makes you look clueless: http://ripplescam.org/

Litecoin provides real value and will ride BTC all they way to the top.

Ripple will be gone in a year or two. Its a bad idea that nobody needs.

What a bunch of crap.

Yes LTC is dead.. Sell it to me now for $1 each.  ::)

I did read your post. I don't know about ripple, but in relation to altcoins I agree with your point in general, but wanted to make the point that actually some altcoins have advantages over bitcoin. I don't want to refute the argument in general that some altcoins won't last, just around those altcoins that have some real-world advantage (not just mining advantage) over bitcoin. As for reading a book and needing 7 advantages... not really (just because sony or some other company says it is so, doesn't make it true - betamax? minidisc?).

One important advantage is enough for something to survive, but it has to be sufficiently important to a sufficiently large number of people. I would argue that speed of confirmations may well be such an advantage, not least because it also has a knock-on effect on security (http://www.reddit.com/r/litecoin/comments/1cssqr/the_math_why_litecoin_is_more_secure_than_bitcoin/ ). Is litecoin "faster enough" to survive? Maybe not, but then maybe there will be another altcoin that will take over. Litecoin already has quite a number of participants but time will tell whether it keeps them.

If you genuinely believe it's dead, put your money where your mouth is - sell it to destruct (or me) :)

Thanks for your argumentation :)

What about the network effect? Meaning the value of the network goes up with the amount of participants?

Litecoin has faster transactions and if this alone is sufficiently important to a sufficiently large number of people then indeed it will succeed. But all those people look also at where can I use it? And then Litecoin is far inferior to bitcoin, even with faster transactions. So my argument is, for an altcoin to get those sufficient amount of people, it needs to offer many more advantages over the competitor. Comparable to facebook, windows, or ebay, the more amount of users, the more valuable it becomes and even with serious disadvantages over a new product/service, people will still chose for that due to the network effect.

One important advantage may build a niche market, but does not stand a chance to take over the far larger network. Many important advantages however do stand a chance to take over a much larger network.   

I don't hold any altcoins because of reasons mentioned. However, I was also resistent to bitcoin and it took time for me to see the truth in the argumentations. I might miss something in the altcoins too, hence this discussion.

Short on detail, eg scrypt versus sha, coin number, confirmation time.

It like the navier stokes equation, the beginning parameters can have an entirely different outcome

I stand corrected. Thanks.

Why is ripple not worthless?

Why has it value?

What does it allow me to do?

Indeed. If Litecoin is to prevail over Bitcoin because of its 2.5m block time then Litecoin will itself be toast because Feathercoin and Chinacoin are both much faster than that. One or both of those would prevail instead.

Edit: Chinacoin at least with its 1 min blocks

That is true. I don't invest energy into something where the first rationale is weak already. I debunked the first rationale in my opening post and if someone can show me that I am wrong I am thankful and motivated to research more.

I suspect for many people the first rationale to get started into ripple or litecoin is the idea to make a similar fortune as the first adopters of bitcoin. This however will not work if the masses do not join. And I don't think they will because of the arguments I gave in my opening post.

The reason Litecoin survives is scrypt. But it also opens it up to possibility of botnet attack, at least for now.

I have to admit though that the market disagrees with me. Litecoin is being valued by the market. It's valued around 1/20th of bitcoin. All things being equal this will probably continue in the future.

I don't see the practical use yet though. Maybe Litecoin will be needed for smaller transactions? (if bitcoin indeed allows smaller transactions less and less over time)

It probably will stay efficient to run on retail hardware for a long time, transaction confirmation time isn't really relevant unless it is magnitudes shorter.

wait for mtgox

I think I get how the market values Litecoin.

BTC fx rate / block frequency ratio / transactions per day ratio

So,  approximately: LTC fx rate = $110 / (10 / 2.5) / (60,000 / 8,000) = $3.67

The block frequency ratio covers the inflation aspect, and the transaction ratio covers the measure of utility. Ideally, block reward transactions should be excluded from the transaction ratio.

But I am surprised. Where are most of the thousands of LTC transactions per day coming from?
http://ltc.block-explorer.com/charts

Personally I didn't invest in ripple and i heard about it right when it came out (sorry about that today) cause i didn't believe in it. I see it as a Hawala network gone digital.It doesn't grant the financial freedom bit coin does (i.e. protection from inflation, ease of movement without 3rd parties/payment system, decentralized) to me it looks like any other P2P payment system that already exists, except they claim anyone can become a gateway, they claim it will be open source, and they put it in pretty packaging right when bit coin proved itself, and somehow people confused ripple for a crypto-currency and not a payment processor.

But if we look at the "scoreboard" I'm out of my mind cause it was a big mistake not to invest, so I'm gonna eat my hat like my dad did after bit coin made it and ask you why did you invest in ripple? why do you think its gonna work out? do you believe in the philosophy behind it? do you think its still gonna go up?

True indeed - but that's *because* of the argument above (rather than the other way around). I also have a bunch of feathercoins (more than litecoins), but don't really see what value they add over litecoins

My understanding was that feathercoin is not inherently any faster than litecoin. In fact bushstar (the feathercoin creator?) said so himself:
https://bitcointalk.org/index.php?topic=178286.680

I'm pretty sure Chinacoin is just another litecoin knock-off.

My view is that it is not the *number* of advantages that something offers, but the *value* of the advantage(s) that it offers. That is why I was somewhat dismissive of the "7 advantages" theory.

Network effect is absolutely critical to adoption. It is probably the most important advantage, *most* of the time. However there are exceptions, and empires with massive network effects have fallen in the past. Myspace (or Bebo or Friendster) had a much stronger network effect than facebook (when it first started) in terms of sheer numbers, but facebook was "cooler", dominated by students, and had a great user interface (very clean).

Speed of transactions is very important to the payments industry. 6 confirmations from the bitcoin network is too slow for many applications. It works fine for remittance and ecommerce, but doesn't really work at all for face-to-face retail. Do you want to stand around waiting for 10 minutes for your cup of coffee to be authorised?

Litecoin is probably still too slow for many of the applications that near-realtime transactions would open up. But it's faster than Bitcoin. And it has a decent level of network effect - there are plenty of exchanges between litecoin and bitcoin etc., and plenty of miners, so in my opinion it has a decent shot at hanging around for quite a while (if not overtaking Bitcoin).

The problem with Ripple is that OpenCoin could be raided by the feds and then XRP are worth NOTHING.

Also, it isnt mined - and it isnt even close to being scarce. Its made by a FOR_PROFIT_PRIVATE_COMPANY. They have one goal. MAKE MONEY.

BTC and LTC dont have these problems...

True, myspace was beaten by facebook. Network effects aren't everything and can work in reverse too! But as you say correctly facebook was better. Better interface, cooler clientele, but also better tools and apps, more options, and far superior marketing (everyone that signed up and 'searched friends' via their email account would send automatically a personalized email invitation to all those people to join facebook too). The setup was also very different, myspace was public personalized webpages, whereas facebook was a private network.  

Litecoin does not offer such great improvements over bitcoin. You are hammering on a single advantage in favor of Litecoin 'faster transactions'. By your own admission you say that the value of this is limited as it's also not fast enough for realtime transactions. I've read also many counterarguments that Bitcoin does not allow realtime transactions. Satoshi Dice offers realtime transactions with bitcoin. And for smaller transactions with merchants in the street the risk of not waiting for a single confirmation is acceptable.

I'm sorry but I think, just like facebook did, Litecoin will have to offer much more value/advantages in order for it to even be able to build a niche market, let alone take over bitcoin.

Litecoin today lives at the mercy of speculators. And I think speculators that bid up Litecoin and believe in it long term, will pay dearly for letting hope/greed instead of rational evaluation guide their decisions. I would advise strongly to also listen to your sceptical/fear part, now that you still can lock in most of the value.

I might be totally wrong and will continue to follow this thread in search for better arguments in favor of Litecoin.

I didn't invest in it, I just didn't sell my free XRP and I won't sell them at least till ripple comes out of beta. I think that once ripple is up and running XRP will be the first bitcoin alternative to exceed it in market capitalization.  (It already does if you account for the XRP still hold by opencoin)
If prices go below 1BTC/100k I will probably buy a bunch though.

Ripple has some major venture capital millions of dollars backing it.  Don't sell it short...well maybe the current price is unsustainable but then again it could run up higher. I like it though.

Buying xrp is not the same as buying shares in Ripple - they already have their own business arrangements involving real money with their backers.
You think the venture capitalists exchanged their millions of dollars for xrp?

The value of xrp has nothing to do with the value of Ripple as a payment system.
xrp could be worth 1c per 100000xrp and Ripple would still work as a payment system.

They are almost certainly going to release massive amounts of xrp to reduce the price of xrp to make entry into the ripple system as cheap as possible.
No one will use Ripple if xrp becomes hard to obtain. They will throw xrp around like confetti.

It's their financing model though so don't expect they won't charge for the rain of confetti. Plus the way to lower the barrier of entry already has been established: Lowering the XRP fees instead of flooding the market with additional ones.

I wouldn't be so sure about that. How else is OpenCoin going to make money besides holding XRPs and hoping they go up in value? Once the server code is open sourced, they will have no control over the network.

But you can't use ripple unless you have xrp - they have to give it away. You can't buy ripples unless you have ripples already.
No average Joe will use ripple if Ripple don't give them free xrp.

Yes and no, yes they will give away quite a bunch, but at which rate?
I agree that current market prices are influenced by the sub sequential reduction of the rate they are given away on the forum. And once there is another giveaway prices might drop.

Now the assumption that the average joe won't use ripple unless it's gratis is flawed.
Think of this of how Second Life works: Linden Dollars are both traded on the market and supplied by Linden labs, the most straight-forward way to do this is for opencoin to sell XRP via credit card.
There would also be third party sites which sell them at a semi-fixed rate just like coinlab does.

You're rejecting the gold to silver analogy and substituting a real estate analogy?

How about this: No analogies apply at all, because cryptocurrency is unlike anything that has ever existed before?

Your name speaks for the type of judgment you made. Threads like these have been made since the start if altcoins, and guess what? They're still here. The Litecoin part reminds of all the threads that were going on in December 2011 and nearly all of 2012.

You forgot it was developed by a for profit company, and they have held onto 25% of all XRP for themselves.

They clearly have a long term business model - and I don't doubt the price of xrp plays a big role in this - but they have to reach a point of critical mass, where a good portion of the world's population have enough ripples to do business on ripple.
They are currently taking advantage of bitcoin users who are used to these cryptocurrencies (we enjoy playing this game) - they are using us as guinea pigs (and it's costing us more than a guinea).
Once we build their system with our involvement, and attract more users into an increasingly useful money transfer system, they will start to impart pressure on the value of xrp in order to make it trivial for Joe to enter this payment system.
They will manipulate the currency supply to their hearts content so as to maximize their long term profits.

(I've just persuaded myself that ripple is a scam. But a very useful scam that may change everything.)

It's a scam if they manipulate the currency supply or for something else?

It's a scam the same way Bitcoin is a scam, depending of how you look at it, either all the way or not at all.

The problem is even worse, as the founders, employees, and investors are going to hold at least 50% of all XRPs.

Quite frankly I view such a business model as being disgusting. If they wanted so desperately to make money they should have created a distribution method based on misterbigg's idea, https://bitcointalk.org/index.php?topic=147700.0, or something better, and invested and mined it early on while not trying to monopolize it, instead of premining it and trying to convince the rest of the people that this is a great idea.

I sincerely hope that once it is open sourced, a competitor with a better distribution method is going to be developed.

Also, the argument that Bitcoin is just as centralized doesn't hold. Ripple is significantly more centrally held than Bitcoin when comparing the founders, employees, and investors of OpenCoin with the early adopters of Bitcoin.

You can use your analysis to make an investment decision - it's a free market. You have all the facts, as does everyone else.

There is no doubt that Ripple is going to be succesful despite its drawback, but I still believe that a competitor will come, and that both currencies are going to compete against each other.

Ripple in many ways does seem as the perfect cryptocurrency, except for its distribution method and its supply, which should be multiplied by 100, so as to be usable up to the smallest transactions with a market capitalization of greater than 70 trillion current US dollars, given that the world is undergoing the phase of searching for the most ideal currency, a significant portion of the world still needs to industrialize, productivity can further increase by allowing unlike now for the free market to work, and productivity can increase even further through technology improvements.

Great prediction. :)

YOU make a rational prediciton upon the future of LTC then, right the fuck now, with current knowledge.

I'll be there in half a year to call you out on it and laugh at you.

Yawn.