Bitcoin Forum

While I'm not a fan of Ripple, and I was all for the 'free market' letting things sort themselves out, I start to get the feeling that Ripple really is a threat to Bitcoin. Not because it offers any true superior functionality, but they seem to have a very cohesive message that now in the context of appearing before the government seems to BE dangerous. Ripple seems to want to woo the government into a virtual currency that can be controlled and centralised. It also seems like team Ripple seems to think that maybe the government can be tricked into fighting their battle with bitcoin for them.

I think 'team bitcoin' should perhaps be a bit more proactive about pushing the message of Satoshi's system. We have been relatively "live and let live" for quite some time, and maybe it's time to make a change in that. Ripples developers sit on an unfairly large pile of their own 'currency' designed to make themselves fabulously rich and fund their own future enrichment. Imagine if Satoshi was still around and funnelling his million coins into buying people off with Bitcoin, which as far as we know, he's not.

Following the second senate hearing, it seems like ripple is getting a disproportionate amount of airtime in relation to their user base and makes me extremely suspicious about who their 'funders' are.

To that end, I would like to propose that we petition Bitstamp to drop ripple support and to be vocal towards other Bitcoin supporting business to not work with Ripple. Ripple threatens bitcoin not through functionality but by appealing to the naturally authoritarian and centralised nature of the government, banks, and existing financial system. They also seem to be funded by money with the right connections that can get a relatively unused centralised system in front of the Senate and I think this makes them dangerous. By being thus far relatively neutral on Ripple, I think we are making a big mistake and letting a cancer grow that is sucking off the popularity of bitcoin to launch itself into a limelight that it does not deserve.

Ripple is bad for bitcoin and bad for exchanges like Bitstamp to support. I think we should be vocal about this and I encourage bitstamp users (I am a VERY happy bitstamp user in particular) to ask Bitstamp to drop Ripple support, even if this means returning whatever payoff from Opencoin they may or may not have received. 

So what does make Ripple more dangerous to Bitcoin than e.g. PayPal or Amazon? That Ripple Labs invented their own (shitty) currency instead of implementing only balances in USD and BTC?

Ripple is a decentralized exchange and market, not a currency - XRP are and as you said, they are easy to get.

I think Ripple is more dangerous because it seems as though they have a disproportionate amount of access to important legislative bodies and regulatory agencies it seems. Correct me if I'm wrong but they are not a decentralized exchange and market, they are 'distributed' but still largely run by OpenCoin. Certainly Opencoin holds the vast majority of the coins to buy potential collaborators involvement.

Decentralized would be if the people who used it also ran it and also owned it, but thats not ripple. Ripple is OpenCoin and they have pre mined billions, the vast majority of which they keep themselves. I am coming to believe that Ripple is attempting to use it's connections to perhaps push the government in a direction that favors government support of Ripple like systems over bitcoin.

It's always seemed to me Ripple is just waiting for somebody huge to buy them out. I could care less if exchanges trade it, to me it has zero impact on bitcoin or anything else.

Thats what I thought too, until they essentially showed up at the Senate hearings. I think most people's attitude towards them has been similar to Alt-coins. Live and let live. But no altcoins are started with millions of dollars in Venture capital and the connections to get them a seat in front of the Senate despite having virtually no user base from what I can tell. I think the danger to us is underestimating their philosophical similarity with existing systems that we are trying to revolutionize/modernize/fix. I think we are making a mistake by brushing them off.

You seem to confuse XRP with Ripple again... XRP are a centralized asset useable as currency amongst other things (issued by/to OpenCoin/RippleLabs), the software isn't. You can run rippled right now (after you compile it from the MIT licensed source code...) and choose to build your own network or join the existing one. This is very similar to Bitcoin, where you can start from a new genesis block or use the Satoshi chain.

If you only run Bitcoin, you also don't get any coins - you need to mine them (or buy from someone who mines, or buy from someone who buys from someone who mines etc.).

You can use Ripple perfectly fine with 100 XRP (that you could get for free on this forum, that you can buy from Bitstamp or otherwise) and very likely cover all your transaction fees you'll ever have to pay from that. Beyond that you don't need to deal with them at all and can for example treat it like a web wallet (where funds are held at Bitstamp, if you use their BTC IOUs). The difference is that you can pay other people in currencies they want while holding currencies you want.

Since bitcoin transfers are irreversible, Ripple could in the future likely also be used similar to BitPay or Coinbase - then you wouldn't even need an account there and just pay to an address that is generated by a gateway service and the merchant at the other end receives their USD or EUR or whatever 10 seconds after your transaction is on the block chain. If you want it to be faster, you'd have to use it as webwallet.

I personally am rather happy that it is Ripple Labs that is working in regulation - at first glance it looks easier to get a hold of for regulators and they probably like the fact that they have a rather central contact point registered as company in the US than some network of various people. It could be much worse btw. - imagine Bruce Wagner sitting there! ;)
The reason might simply be that they have ~25 people working paid and full time on both development of software and business relations, so they are more likely to come across and talk to regulators than members of the Bitcoin foundation. Also the regulations to being a gateway are likely easier to fulfill than being a money exchanger (something that a bitcoin exchange likely would be licensed as) - and you can leave the trading and exchanging to your customers.

Ripple surely has its flaws and problems, being perceived as danger to Bitcoin might be one of them. In my opionion they are a far greater danger to Bitcoin exchanges than to Bitcoin itself.

It's still confusing I think and this is something that I don't get- how is the 'pay people in their own currency' actually a feature?


While yes I could hope that the whole world just uses bitcoin, I could also send Euro's to my friend in Europe while holding USD myself just by sending it in bitcoin no? I put BTC in at one exchange and they take euro out at another exchange.


That's the part I'm particularly skeptical about. There are lots of companies on the edge of new and exotic frontiers of the law yet they don't get airtime infront of the senate. Bitcoin has a $5 billion market cap with hundreds of thousands if not more users worldwide, but ripple? They seem just like a startup, albeit with some more favorable treatment. As for the regulatiosn of being a gateway being likely easier to fulfill, I think thats their agenda- to promote this idea. That Ripple is somehow more "legal".

Then you have currency risk while the money is in bitcoins. You could also get a gold bar, FedEx it to "Europe" and your friend from there sells it locally. Even if you imagine you have a teleporting device that takes only 1 hour to transfer the gold bar, this still is not very handy if you just want Euros.
With Ripple transactions are atomic (and irreversible after ~10 seconds), so your friend knows exactly how many Euros will arrive. Just imagine you paying at Amazon - they will not be happy with receiving "roughly" 50 USD! Likely they won't even be happy if you overpay, because then they need to pay you back.

By the way, the thing you describe carries the same counterparty risk and "money is debt/IOUs are evil" mentality that so many seem to criticise about Ripple. You didn't bring up that point, so i just write it for the others. :)

While I hope that there will be other/better infrastructure to send and automatically convert funds to native currencies from bitcoins, I'd say Ripple is definitely one of them.

Serious question, no boasting or cynism intended:
Which Bitcoin focussed companies have more than 20 full time employees (and not just customer support but in business and software development)?

Ripple Labs still IS fairly bitcoin focussed (which even might be a limiting factor for them actually - maybe they would have been better off approaching banks first before approaching this community?). Most of the work, money and time in Bitcoin seems to be spent on actually getting rid of them again on exchanges, either directly or indirectly through merchant solutions that pay out USD and that offer a consolidated (sell) order book towards users.

Whom would you rather have seen in front of the senate (well it would have been already cool to have Chris there instead of this failure of a lawyer lady)?

I agree that they might push for the idea that it is less hassle to become a gateway than to become a fully licensed independent exchange, it is their business model and value proposition after all. Again I don't think that this threatens Bitcoin as such, more exchanges who want to be able to operate their own order book with all positive and negative parts of it (look at the spread between MtGox and Bitstamp for weeks now for example). I personally don't care if I sell my Bitcoins on Ripple and get my Euros from a gateway or if I sell them on an exchange and get the Euros from them (well, the exchange might have worse rates due to lower competition) and vice versa, as long as it is easier for me to move between fiat and BTC.

Edit: Gotta listen very hard to my pillow for a few hours with closed eyes - I'll be back later and thanks for keeping the discussion civilized so far! :)

Gotta hit the pillow myself. Will be back to talk more!

It isn't the free market when you petition the government to regulate your competitors.  It's the exact opposite.

In a real free market the Bitcoin Foundation, the U.S. Senate, etc., are all nothing but clubs or professional bodies - some would hold influence, to be sure, but none would hold the actual power to destroy that the government holds.