Bitcoin Forum

Ripple is misunderstood.

Centralization is a threat to Bitcoin and most Alts. Ripple is a complementary system for all currencies. It battles against centralization, and in entirely different ways than most cryptos. It targets eradicating centralization issues at different levels, with its own unique decentralization model. Yet, most people are unaware, misinformed---or have vested interested in attacking Ripple.

MasterCoin, NXT, eMunie, and Monetas are all systems attempting to solve similar issues. They are all worth taking the time to evaluate and understand. I do not claim any one system solves all major threats we are facing today.

Why are so many misinformed?

http://ripplescam.org/ (http://ripplescam.org/) (inaccurate and outdated)

In almost any discussion this site comes up, despite it offering no real value. Understanding why Ripple is important means understanding major issues threatening most crypto currencies today.

When you trade on almost any exchange, you are embracing centralization. Likewise, the same is true for most Bitcoin payment systems. Ripple is derided for its decentralized IOU system, yet it is designed specifically to mitigate the threat posed by centralized exchanges and payment systems. In using those systems, you are embracing closed IOU systems. All of the value of crypto transactions is gone at that point. Many have been bitten by the scams that this has allowed, and the fallout from ineptitude of the operators of many of these services.

https://inputs.io/ (https://inputs.io/) is the poster child of these threats. Scam or hack? Ripple is attacked, in part, because it threatens the business model of closed centralized exchanges and payment systems. It is important to note that the author of ripplescam.org is, in fact, the same person responsible for inputs.io, along with centralized systems that have wreaked havoc on the community. TradeFortress is the perpetrator:

https://www.google.com/search?q=tradefortress (https://www.google.com/search?q=tradefortress)

Why would he attack?

He had major interested in detracting from Ripple. Its model conflicts with his (and all other) closed centralized payment systems. In driving people away from Ripple to his centralized system, he cost trusting users dearly. An angry community is looking for him. His specific whereabouts are currently unknown. It is worth carefully evaluating all he has had to say about Ripple.

Everyone should read this conversation clarifying lower level misconceptions of the Ripple system:

https://news.ycombinator.com/item?id=6867324 (https://news.ycombinator.com/item?id=6867324)

Ripple is, in fact, open source:

https://github.com/ripple (https://github.com/ripple)

It is leading radical new concepts that may be beneficial for all new currencies to consider:

https://ripple.com/wiki/Contracts (https://ripple.com/wiki/Contracts)

Ripple may or may not be the future---but it brings vital concepts to the table. They need to be considered for their individual merit. Decentralized payment and exchange systems are vital to the future of crypto currencies. Ripple does not need to replace any currency. Its system complements all currencies. It is not about Ripple vs. Bitcoin vs. your favorite crypto currency.

If you do not believe in Ripple, or Ripple Labs, then by all means fork the code. Create a system that aligns with your ideals. Create a new code base altogether---as Ripple alternatives like MasteCoin, NXT, Monetas, and eMunie are attempting. Dismissing Ripple and all concepts tied to Ripple disservices the future of crypto currencies.

Many of those who attack have vested interest, to drive their centralized alternatives. It hurts the community.

Scammers with vested interest in centralized systems abound.

Support decentralization.

So what you are saying is Ripple is a scam?

In order to be able to trade in paper money you have to have a bank account, reveal your identity through government identification and you have to be registered as a company within a country that recognises the legitimacy of your company, therefore ripple is not decentralised.

False.

You can deposit crypto and trade for USD or any other paper currency.

Ripple sounds wonderfully complicated and complex. I like POW crypto currency because it's elegant. Whatever Ripple is, it's not elegant.

99.5% of all ripple is still held by Developers of Ripple.

Sounds pretty centralized to me.

PoW leads the day, and is the most understood, discussed, and explained system there is. Ripple is still in its early days of adoption.

Ripple offers a lot---certainly---but I would maintain it is one of the most elegant and well conceived systems around.

XRP is an infrastructure component. A small amount is destroyed with every transaction, to mitigate issues like DDOS attacks. It will be given away by Ripple Labs to spur adoption.

It is a single (and vital) component of the Ripple system, that supports the decentralized network---and allows for distributed transactions with all other currencies. XRP != Ripple. Ripple's decentralized benefits are (partially) enabled through it.

Note: while XRP cannot be mined, Ripple has undertaken an initiative to support the World Community Grid---similar to CureCoin and GridCoin:

https://www.computingforgood.org/ (https://www.computingforgood.org/)

Ripple Labs is highly focused on distributing XRP, and has found a way to promote a great cause in turn.

Bitcoin works because it's almost universally understood by the people who use it, even if only on a very basic level. I start reading about Ripple, and it all sounds good and clever and logical, but it puts me in mind of spaghetti code; all sorts of different ideas and concepts working together that it's not entirely clear what the system does. They may all be very good ideas, fantastic ideas even, but put enough good ideas together and you end up with unpredictable emergent behaviour. Maybe I'm biased as a programmer, but elegance to me should be one of the main goals for any POW, or even POS currency. To be honest I'm really not sold on POS at all. Not even POW with POS elements. I just think it does the opposite of what it claims.

yeap, computingforgood is very good move from xrp!
i wonder if this is the reason of #2 cap behind only BTC!
or are there other reasons as well?

Also a programmer here. It is worth checking out the code. Since Ripple is still in its early stages, it is going to take a while for all of the concepts to be clearly distilled for mass consumption.

Ripple has performed well since November, largely due to Chinese adoption. Aside of early adopters, this went mostly unnoticed by the broader crypto currency community. It was off http://coinmarketcap.com/ (http://coinmarketcap.com/), but building steadily through November. Check the charts: https://ripplecharts.com/market/USD:Bitstamp/XRP (https://ripplecharts.com/market/USD:Bitstamp/XRP)

It's indeed a strong system compared to the must systems and altcurrencies that are trying to hold on!

Good post made hypostatization!

Often with complex systems such as this there tends to be a few good concepts that can be taken away that would benefit the community if applied in a different way, or if applied on its own without the additional functions. I'd be interested in looking into the code and getting a better understanding of how it all works. But even as someone who enjoys learning complex systems, it seems like a hard sell to me, and probably magic to someone who doesn't understand it at all. What worries me most about complex systems like this is that it's much harder to obfuscate flaws in the system, or loopholes.

Ripple is misunderstood because no one can understand it.

If I want to receive $10,000 USD from Bitstamp as a money transfer I have to agree to lend them that amount at any time (and they can just take it without telling me). I can't think of any circumstances in which that would be a good idea.  Bitstamp is not a bank and is not FDIC insured.

At least when I deal with an exchange I choose when and if they get my money. 

I agree about the general concern for complex systems, but have been consistently pleased by what I have digested. Everything points to development taken seriously---not a sole developer-rushing-to-market-effort. Also worth noting, on the code front, is their recent hire of a co-founder of nodejitsu:

https://www.nodejitsu.com/ (https://www.nodejitsu.com/)

It will take time. Much like Bitcoin itself, it moves in a radical new direction.

Ripple is a scam. Has been, will always be.

Once you start using it, it turns out to be pretty easy, even for a newbie like me

No one can understand the foggy misleading purpose of mastercoin and ripple, so it will fail, simple as that. I will bet on Nxt. Period.

Understanding their purpose directly ties to understanding the major centralization issues threatening Bitcoin and Alts today.

Sorry all the coloured concepts (Mastercoin, NXT etc) are so far removed from being able to be legally enforceable in the real world against real assets it's a joke.  At least with crypto you are dealing with virtual assets.

Ripple does not force you to deal in real world currencies. It supports crypto currencies with equal strength.

Also: since there are no legal precedents established for systems like Ripple yet---it is extremely hard to say how they will fair, in line with your concerns.

Highly focused to exchange those ripple for fiat as soon as possible. What a great cause!
If it does not allow anyone to create the coins in an equal manner than it is in effect pre-mined. I dont care how many ripple they gave you to come over here and try to pour perfume over a shit sandwich in order for all of us to eat it.

Im sure Ripple IS NOT a scam. It is doing exactly what it was designed to do. Make the dev's Rich beyond belief from the fools who will eat shit sandwiches.

Experience with bad exchanges, seeking a long term currency investment, and then finally reading code kept bringing me back to Ripple. I have previously invested in many alts---and have made decent money. I am hoping to encourage people to look at other decentralized exchange systems as well.

I assumed it was a scam at first, myself, and then read up on it more.

I am not paid by Ripple Labs.

Cripple is something like Monsanto. Trying to make every farmer to accept only their own rules. Controlling everything, of course.

Cripple is not a scam. It just makes you dependent on cripple CEO. Nothing more, nothing less. Typical centrallized project. Give a bow to the Monsanto and Monsanto maybe will allow you to make some profit.

Conspiration theory: many todays scamcoins and junkcoins are created by developers of ripple, nxt, megacoin and similar projects to initiate a declining attitude to the crypto in general

I would appreciate if someone can find the answer to this question.  I cannot find it.

Is an ordinary user located in the US who trusts both Bitstamp for USD and an offshore exchange for USD required by FINCEN to be licensed as a money transmitter.  Anyone familiar with the issue will know the guidance note - I will try to find the link.  

*edit* link here: http://www.fincen.gov/news_room/nr/html/20130318.html

Riplle is easy,future success！   8)

Ah, so they don't pay you. Somehow, I'm not surprised by that. However, I'm confident you have invested in Ripple, which is the only reason you spent your time trying to prop up this 'investment'.

Tell me, when did you gain the ability to run a trust node?
If ripple decides to modify their code in a way that the majority disagrees with, how exactly do you think you're going to prevent the 'community' from being forced over?

Allow me to answer my own questions so we don't have to deal with your rambling attempts at deflecting from the real issues: The community does not control trusted nodes (servers, hosts, whatever you want to call them, it's the same damned concept) and you have no power to decide the direction of development.

That's called centralization.

The fact that you even pretend that the source they have released is of much significance is laughably ridiculous. By your own admission, you must have gotten involved with ripple before you ever even attempted to understand it and looking at the source was apparently the last thing you did.... ::)

I am invested in XRP. I said above that looking for a long term investment kept bringing me back to it. I value my investment, and also what Ripple offers to the community directly and in ideas that can be adapted to other systems. Alternatives like eMunie, NXT, Monetas, and MasterCoin are important. BTC and Alts in general are facing severe centralization threats.


Ripple is open source. Users can reject the changes and push back or fork, just like any crypto currency. Validation is decentralized. If someone wanted to start a modified system, they are able to do so. I actually hope that people spin off portions of the code and general concepts to make other systems more robust.


I think you may be confused. Anyone can become a Validator. Is that what you are referring to?

It may be worthwhile reading this discussion: https://news.ycombinator.com/item?id=6867324 (https://news.ycombinator.com/item?id=6867324)


I am not sure what this comment is based on. My knowledge of the code base is growing, and I have acknowledged that. I have been impressed so far. I started investing in Ripple based on the concepts, as well as general interest in crypto currencies. My interest in it has grown more recently, following negative experience with exchanges. After reading about it more, and starting to dig into the source code, I have continued investing.

ripple is a premined scam no worse than nxt or quark

So what about the mining of ripple? how can anyone with a desire create some XRP? They cant. you just have to grease the bankers palms with payola to get their "long term" investment.

I dont care how long your rubbed your private parts all over the code. Its still centralized and the bag holders are reaping the rewards from their turd sandwiches to all the fools willing to bite into it..

You cannot create Ripple. It is not a mining system. Via the World Computing Grid, however, you can earn it: https://www.computingforgood.org/ (https://www.computingforgood.org/)

A lot of people seem to miss that the greatest utility of Ripple is not XRP. It is one component a system that allows transfer and exchange of all currencies.

Users are able to speculate with, trade, and spend any currency that has established gateways. Benefiting from Ripple does not have to take the path of investing in XRP. It provides a means of transferring and exchanging currency without being beholden to closed centralized systems like inputs.io.

Oh, I wasn't aware that every proposed change on github is automatically merged... The fact that it can obviously be forked is neither here nor there, simply a statement that the code and basic concept is indeed interesting.

You do not know who is actually running as a public 'validator'. It's still simple consensus, and the majority is most likely represented by those who have something to gain by following the direction set by those who used to be known as 'opencoin'. I still consider that dubious, but the process is not significantly different from bitcoin and the rest.

However, it's true that I was not aware of the release of the rippled source specifically, that seems to be a fairly recent development. https://github.com/ripple/rippled/ (https://github.com/ripple/rippled/) (also included by proxy in your original post but I consider it to be the most significant part by far)


Anyways, I hope someone will make use of the provided code and concepts without the mostly unnecessary 'premine' (I understand that XRP does not exist solely to line the devs pockets). I expect it would gain significant interest on it's own merit, no bribes necessary.

#Agree

In general I think all alts go to close-to-0.  I think any alt with a strong network will always have some value as a dogecoin-like "playmoney" but I think the days of alts are numbered.  the space is simply exploding and it will collapse, IMO.

Ripple is a special one, IMO.  Ripple, like many of the alts, never answers the question "why not just use bitcoin?"

Also, it should be noted, I love the idea of Dogecoin and all it stands for. 

very alt-crypto

Apologies - did not mean to imply that. By 'push back', I meant voice disagreement with changes, not literal git push.


It would be great to see concepts from it adapted to other code bases. Decentralized exchange systems, with support for multiple currencies, is going to be massively important to supporting a healthy future.

Ripple is an ill-conceived system useful for trading unenforceable promises.  Its success depends on people mistakenly believing that a Ripple promise denominated as 1 USD is the same thing as 1 USD.

Ripple serves to insulate its users from the world's legal systems, the very same systems the users would depend upon to enforce any promises on the network.  It's broken by design - like a screendoor submarine.

I think part of the confusion comes from Ripple striving to support the exact opposite: use Bitcoin!

It is a complementary system. As it does not target overtaking Bitcoin, but instead seeks to support all currencies, its message is more broad:

https://ripple.com/guide/#what-are-the-advantages-of-using-ripple-for-financial-transactions (https://ripple.com/guide/#what-are-the-advantages-of-using-ripple-for-financial-transactions)

Here is one of the most important ongoing concerns in our community today: https://en.bitcoin.it/wiki/Off-Chain_Transactions (https://en.bitcoin.it/wiki/Off-Chain_Transactions)

Ripple facilitates a decentralized means of making off-chain transactions.

Centralized exchanges and payment systems are a major threat to Bitcoin and crypto currencies in general. Exchanges that are relied upon for most cryptos are closed, centralized, off-chain systems.

What happens if I "receive" something in Ripple and I want to exchange it for the real asset but the person who owes it to me (from the view of Ripple) doesn't want, or isn't able, to pay?  This is what I see as Ripple's achilles heel.

Thanks for explaining what a scam it is.

No it does not. Precisely because it depends on trust, you have to specify who you trust and for how much. If you store your money at a bank, you decide you trust them and for how much. If you deposit money at an exchange, you do exactly the same. A promise from an anonymous person on the internet is worth hardly anything, a promise from a close associate has real value.


It's not just the legal system, it's pre-existing social relationships as well. But let's stick to legal systems: the same is true of exchanges around the world. If you deposit money with an exchange, in the end you are dependent on legal systems to get your money back.


I don't think you really understand the design. Ripple consists of three layers, the underlying cryptocurrency which is comparable to BTC, the fiat trading system which is like coloured coins, and a distributed exchange. The nice thing is that all three are integrated into one distributed protocol.

Then you're out of luck, just as those who entrusted their coins to TradeFortress were, or those who kept their money in Cypriot banks. Unless you are trading a cryptocurrency inside its own system, there's always counterparty risk. Ripple lets you manage that risk explicitly. Until we get to a point where everybody uses cryptocurrencies, we'll have to deal with counterparty risk on the fiat side. Ripple (and several proposed rivals) could help us get closer to the all crypto scenario and more quickly.

if so , why othre exchange site can not exchange XRP, only your site can do this??
i do not see how you distribute these XRP, there are just people buy/sell this XRP.

this is the ultimate premined scam. why would you let somebody control 90% of the currency, this is the cryto version of the federal reserve

Anyone can buy or sell XRP.

What happens if I "receive" a Casascius coin in RL and I want to exchange it for the real asset but the person who made it already took the money from it - or worse: runs a hidden node that will double-spend with a high fee any coin that I try tro move off a Casascious coin so I have no way other than trust to spend the BTC?

The problem you describe happened already dozens of times in Bitcoinland and it always ended in tears and "hacks": mybitcoin webwallets, pirateat40's BTCS&T, GLBSE, Bitcoin-24, Tradehill, inputs.io...
Ripple is NOT designed to save you from your own stupidity (of trusting someone with your funds who doesn't deserve it), just like with BTC you can build insured systems on top of it, but the basis is still that you need a trusted counterparty to keep your assets, just like any centralized exchange that you use (or physical coin manufacturer...).

The problem Ripple solves is that to actually use Bitcoin in most cases, you need to exchange BTC for something else. Ripple has a use case far closer to BitPay than Bitcoin, on Bitcoin you can ONLY receive BTC while on Ripple you can receive both XRP and anything you trust to be redeemable. Yes, the latter can be exploited (just as it has been in bitcoinland for years) however it can also be put to good use, as you see from the amount of great enthusiasm people have towards Coinbase and BitPay, who are in the end centralized closed source services that need to be trusted by both merchants and users to keep their payment data safe (BitPay would be THE ideal honeypot for CIA/NSA/GCHQ!) and to actually process transactions and pay out as advertised.
Ripple takes this concept one step further by decoupling merchants, asset holders (=gateways) and payers by introducing open markets for different assets and introducing market makers (the "traders" on Bitcoin exchanges BitPay sells their coins to).

I don't get how people don't understand this after 1-2 hours of reading and still claim that Ripple is so complex, impossible to understand or anything like that, on the other hand it might be a large intellectual feat of realizing that any service that you use in bitcoinland that does NOT allow you to privately sign transactions with your own local key offline that you choose yourself is something that is a trusted service and could also work as Ripple gateway with the added benefit that balances would not be locked in on that platform.

Especially if those people do understand the complexities of Bitcoin...

I think there is no denying that if the theorems behind money are not something your brain is trained to think about, understanding Ripple *is* hard. Sure, everyone gets what an IOU you is, but that still leaves you with a dozen questions about how everything comes together in this particular system. What are the implications of paying with IOUs, what does it mean for me when I use Ripple?

It certainly took me a while to get it. The fact that the Ripple site is focussed on promoting an XRP giveaway and touting high-level enduser benefits probably isn't helping.

In fact, even after I had a good understanding of Ripple itself, I needed to listen to this interview with David Schwartz to get me excited about the "rippling through accounts" feature as something to facilitate private lending ("money as a social resource" is the phrase he used).

http://letstalkbitcoin.tumblr.com/post/50482657399/lets-talk-bitcoin-episode-007-ripple-the

Then you have the benefit of legal recourse against Casascius who has made public representations guaranteeing he has not kept the keys which you relied upon before accepting a Casascius Coin, and any sweep like that would be evidence to the contrary which would be a tortious and likely criminal fraud that caused you a loss.  There is also a big difference - for me to commit a theft like this (assuming I still had keys and actually could), this would require affirmative steps taken to commit the theft, unlike a Ripple counterparty who merely needs to do nothing to default on someone.  Since I've made clear my real life identity and plenty of people have confirmed it, and have publicly stated my intentions to remain subject to the law, I think it's not apt as a comparison.

Ripple, on the other hand, can fail spectacularly with as few as three people.  Alice "owes" Bob and Bob "sells" that debt to Charlie, as Charlie trusts Alice.  Despite that trust, Alice doesn't feel like paying Charlie, or claims that she never actually owed "Bob", but rather, a hacker made the original transfer and so the debt never existed in the first place.  Charlie is pretty much SOL and can't sue to recover from Alice because legally Alice doesn't owe Charlie anything.  His sole remedy is to let Bob know what a jerk of a friend he has.  This is no big deal if we're talking lunch money, but when it's $10k or $50k, we're talking bigger amounts than most people's social capital really makes sense to leverage.

Meanwhile, Ripple aside, if Alice "owes" Bob and they have a written agreement, and Bob "assigns" that debt to Charlie with a written assignment agreement... the whole thing is magically enforceable in a court of law (happens every day with debt collectors).  Amazingly, a mere piece of paper (or equivalent signed electronic communication) has just trumped all of Ripple in terms of enforceability, and even works with larger amounts like $50k.  (Now for lunch money, Ripple's probably got it beat for convenience...but then again...so has cash, paypal, or your favorite bank payment app)

TL;DR

It's a scam, and so is NXT and Mastercoin.

Got it.

Thanks.

Sure, in which case you'd probably use a gateway with whom you have a written contract.


If you want enforceability, write things down. That's straightforward enough. It's orthogonal to the use of Ripple though.

Its important to make people understand that this is how Ripple works. Charlie made a mistake in trusting Alice, and you making the right decisions about whom to trust is exactly what Ripple is based on. If you have a problem with that, Ripple may not be for you. But understand that this is is not fundamentally different from other trust concerns that are commonplace everywhere ein our lives.

Trust Alice for lunch money, trust Bank of America for your paycheck, maybe trust that Bitcoin won't die a silent death for your retirement fund.

This is particularly true in light of the fact that this:


is just conjecture. A court of law may well decide that a Ripple IOU shall be an enforcable contract. That would be a distinct possibility today, and it will be more likely if people increasingly decide they want to use Ripple.

If you want certainty, write a contract to that effect, agreeing to rely on Ripple's impartial ledger as evidence. You may also want purchase orders and invoices. All this is business 101 and has absolutely nothing to do with Ripple itself.

Yeah, just like with Bitcoin, there are certainly different levels of understanding (I rarely try to go beyond "it's both digital money, depending on your perception of what money actually is you'll see it as currency or asset" with BTC for example), the basic "Ripple = distributed exchange and marketplace" part shouldn't be THAT hard to get though.

Most Bitcoiners seem to have a hard time ignoring XRP as native asset, maybe since all they are used to so far are systems that only exist for this single asset and you need to jump through hoops to actually trade it?


I can think of several ways how you could commit theft even more passively (e.g. issuing several coins with the same private key or also just getting "hacked", being "sorry" and move on like TradeFortress)
Still in the end one has to trust you (that you keep your promises) as well as the legal system (if you don't keep your promises) to use your coins. This is not different to Ripple, where the only difference is that you simply declare and encode that trust in a special type of transaction instead of just implying it by using your service(s).

So you mean the following network (A,B,C are Alice, Bob and Charlie) for example (using 100 USD amounts):
B trusts A for 1000 USD and has currently 100 USD deposited with A.
C trusts A for 1000 USD and has currently 0 USD deposited with A.
B sends 100 USD.A to C and gets something in return for that outside of Ripple (e.g. a nice massage).

A now claims that the 100 USD B has deposited were used up because she felt like shopping, the 100 USD were charged back by PayPal, or that only B would be allowed to redeem anyways.

What A did is most likely illegal under EU directive 2009/110/EC (http://ec.europa.eu/internal_market/payments/emoney/) and probably also in most other jurisdictions worldwide too. C has every legal right to sue her and these laws governing this are in place far longer than e.g. Bitcoin existing, not very abstract, complex or exotic at all and he would have a very easy time finding an eager lawer to represent this easy case.

Also C did something not very smart by not checking beforehand with A that he is actually allowed to withdraw (e.g. C is based in Cuba, A in the US...), so there might be situations where A legitimately can not send the actual assets to someone who wants to redeem them (e.g. one of your customers enters a invalid payment address).

Ripple in its current form is not really any more this "community credit" system that you describe, A most likely is a registered MSP in B's and C's jurisdiction, publishes regular audits and deals with amouts far beyond 50k USD (Bitstamp alone has a few millions of USD issued on Ripple right now, not even counting BTC or other currencies). Ripple transactions are digitally signed, cannot be faked without having the private key and so on. This is even easier to proof than e.g. a Bitcoin payment to a merchant service like BitPay where you first need to provide proof that the address you sent to was actually from them (and not e.g. displayed by a trojan on your system), the only chance for that being to contact them and ask for a custom text signed witht he private key of that address or doing blockchain analysis.

It's informed conjecture.  A court of law may well decide that a Ripple IOU is not an enforceable contract, for reasons well established in law.  The burden of proof is on the person attempting to the contract, and "the ripple ledger says so" is not going to overcome an alleged debtor's claim they've been hacked and never entered into any contract in the first place.  As soon as Ripple has its first "allinvain" moment, and the ripple community asserts that that moment is an "irreversible" one, the legal community will quickly disagree and the world will understand why "the ripple ledger says so" means pretty much nothing legally, and that's when everyone will realize the screen door submarine is capable of no other destination than the seabed.

Ripple is not a scam, it's just full of trading options which most of you obviously don't understand. Identifying Ripple network with one of this options is not a good representation of the real situation.

For example trust... All of you think that you have to trust someone in order to use Ripple, non-sense.

Bitstamp is exchange in Bitcoin world and is gateway in Ripple world. If you know how to use Bitstamp in Bitcoin world, you will know how to use Bitstamp gateway in Ripple world. I'm using Ripple for about 6 months and only trust line I have set is towards Bitstamp and I only set that trust line when I deposit BTC from Bitstamp gateway to Ripple. After I complete the deposit, I exchange BTC to XRP and I set trust line toward Bitstamp gateway to zero, so I don't trust anyone in Ripple and I'm trading all the time in the Ripple integrated order book. If you still after reading this say that it's needed to trust someone inside Ripple in order to trade, you have to learn basics about Ripple. Best way to learn is to try, don't base your opinion on theory.

Cheers

And exactly the same thing is true with Bitcoin payments, so it has nothing to do with Ripple. If you're dealing with large amounts of money, write things down. Use purchase orders and invoices, perhaps in electronic form, perhaps written down on paper, perhaps both. If all you want to use Ripple for is as a distributed Bitcoin exchange, then enter into a written contract with a reputable Ripple gateway. Bitstamp is one of the more popular Bitcoin exchanges, and it's also a Ripple gateway. That's just one written contract with one registered business.

I think anybody saying how Ripple or any cryptocurrency will fare, really has no basis for it. The facts are there are both positive and negatives about Ripple. The same can really be said about any cryptocurrency though. I personally think given the price ( $.027 ) it's as good an alt investment as there is out there.

I agree, but more importantly it is an excellent exchange between fiat and crypto. It will also be great as a way to stimulate use of cryptocurrencies in general, since that's what's used behind the scenes if you use Ripple for exchanging between various fiat currencies. If Ripple captures a significant portion of fiat remittance payments, it will give a huge boost to cryptocurrencies in general and XRP in particular.

Sure, meanwhile, I've never been scammed selling BTC for PayPal, but would never recommend people learn this for themselves by trying.

I agree Ripple is technologically marvelous and works when everyone's honest and making good on their agreements to pay and nobody's saying they're getting hacked.  It's just that I expect it to fail spectacularly when any of these change, because none of these common real-life scenarios seem to be considered anywhere in the design.  Ripple's core flaw isn't a technological one, it's a societal/legal one.

It is a POTENTIAL legal one and if you read the link I gave before you might be able to guess in which direction gateways need to be licensed probably.

Bitcoins are far less legally explored than digital IOU transfer systems and while I definitely would see that as a major risk, I wouldn't call it a "core flaw" of that system (Bitcoin is also a bit more "safe" in that regard as it advertises 0 backing, it tries to be a pure bubble right from the start).

Anyways, I hope to also get some legally binding opinions in the future about what transferring Ripple IOUs means and when you have to redeem them, how to do that and so on. In the meantime I would recommend nobody to see Ripple IOU transfers as something that can be ignored, not binding or something that won't hold before a court. I have yet to see actual arguments that would support such a view actually other than that contracts in that regard are implied by the network, but not always explicitly written, printed and signed by both parties directly and then filed away.

By the way: There already have been HUGE amounts of BTC scammed out of bitcoin users by misusing trust, still it didn't hurt the system at all - why should the occasional dishonest/fraudulent gateway hurt Ripple so much more or be a core flaw?

As far as I can tell there is zero legal difference between using Ripple to buy or sell Bitcoin and using a non-Ripple Bitcoin exchange. In both cases there is credit risk and you have to trust the exchange or Ripple gateway to give you any fiat or crypto owed. At least in the case of Ripple you have a trusted third party (the Ripple network) keeping the books rather than the exchange itself.

After reading through this thread I can safely say that I will not be "investing" in Ripple.

Everything about it meets some theoretical ideal that only exists on paper.

And then scam phrases come out like "Anyone can buy and sell Ripple". Oh really? Anyone can buy and sell the US dollar, anyone can buy and sell Bitcoin or Litecoin or any of the other cryptos that have been released over the last year.

The problem is WHO owns the Ripple currency. These developers come up with this whole idealistic system, try to pump it as a business and then say that "anyone can buy Ripple" while leaving out the fact that the only people selling are the developers.

I don't have an opinion on the overall goal of Ripple as a system, but as a currency it's shit. I am not going to hand over money(or cryptocurrency) that I have legitimately worked(or mined) for and wish upon a star that it somehow succeeds. The mere fact that the Ripple system has this 100% premined and centralized cryptocurrency associated with it means that it will not succeed.

/thread

Ripple is not a currency, XRP are and they are called "ripples" (which is an unfortunate name imho).

They are getting distributed more and more, if you dislike this aspect as the only one that much though, you might like to work together with Iain on getting Splash off the ground:
https://bitcointalk.org/index.php?topic=372486.0 / https://en.bitcoin.it/wiki/Splash
If he manages to keep his stuff reasonably localized in the code (should be possible imho), he'd be able to pull improvements from upstream relatively easily.

If this is enough to change people's minds, then it suggests their objections were dishonest... But the more the merrier, I'm all in favour of competition. May the best one (or ones) win!

This is an excellent question!

The definition of possession of a Bitcoin is very concrete and there is nothing subjective about it: it's algorithmically determined entirely by computers.  You either possess the private key or you do not.  Nobody can change the way that works (other than perhaps the community as a whole), that's why it's so revolutionary.

The definition of a debt, it's a sort of claim against another person you can enforce using some societal framework made of people who have used their subjectivity to define what a debt is, and to create a framework to help make future decisions as to what constitutes a debt.  That framework is a legal system based on a combination of human judgment and written law.

Ripple correctly points out that simple social capital is great for enforcing lunch money debts - the sort of thing you won't miss if someone jerks out on you.  They pretend that this sort of courtesy scales up to bigger communities and bigger amounts when it simply doesn't.  That's why in the real world, any time there's a big deal or a big project, involving legal counsel to dot the i's and cross the t's is routine business.

A court of law can't stop a bitcoin from going to person A to person B, but absolutely can refuse to force person A to repay a claimed debt to person B if that court does not believe the debt to be valid or exist in the first place according to its own rules.

The same is true of Bitcoin or fiat held at a non-Ripple exchange. Or money held in a bank. And yet both operate successfully, to various degrees. As long as we don't live in a pure crypto world, we're going to need exchanges. That is where Ripple's exchange mechanism shines, as it is a distributed alternative to the exchanges we have.

As is the possession of XRP.

@casascius:
Currently the only asset that fulfills your "you own it 100%" criteria on Ripple is XRP and in my opinion they are a quite sucky currency, so yes, that is a core problem on Ripple as you described it.

BUT:

A much larger part of BTC is transacted off-chain (mainly on pools and exchanges, some as physical coins or paper wallets...) as IOUs and the transaction volume of even a single larger exchange is huge compared to what happens on the block chain. Also large parts of on-chain transactions only exist to settle off-chain balances (e.g. depositing/withdrawing from mining pools or exchanges). Ripple offers help in this regard, it does not really try to tackle the "own your own asset" part of Bitcoin anyways. That's why I also hold (and will continue to hold) BTC - I really hope that in the future I can spend them using Ripple even more often instead of having to hope that MtGox does not do another "audit" where millions of BTC IOUs get issued in the process secretly.

A court by the way cannot stop Ripple transactions from happening either, they can only influence the need for redemption. That's why finding a trustworthy gateway is important in Ripple and not in Bitcoin (as real BTC can't be redeemed for anything anyways) unless you want to use Bitcoin IOUs (on any service where you "deposit" coins) for whatever reason, mostly to trade them or earn interest on them or to avoid dust transactions.

That's why it is a bit puzzling to me why so many people here seem to oppose Ripple THAT much - it will if at all increase Bitcoin adoption and enable more people to acquire them. Most Bitcoins that were stolen were deposits at centralized services, NOT individual balances (well, some because of RNG weaknesses for example, but these amounts are tiny compared to what was simply carried out by the operator of that "Sheep market place") by the way, hence the title of this thread - Ripple would enable you to keep your BTC on your own wallet for longer amounts of time or limit the amount of services you deposit BTC to by decoupling depositing/redemption from the actual marketplace. Also BTC is one of the currencies and payment networks that is naturally one of the easiest to work with and integrate in something like Ripple (relatively fast confirmations and finalization of payments) - the real challenge is for example to offer a bridge from and to SEPA.

(As a personal note: I really enjoy the fact that you are able to find a core problem with Ripple (which is in my opinion just not that much of a problem, since BTC solves it nicely instead and Ripple focuses on something else) and articulate this instead of just blurting out one-liners like some other people around here)

I haven't seen him make a single substantive point. All the "problems" he points out exist with Bitcoin too.

Remember, Bitcoin possession is very centralised too at the moment. A very small number of people hold more than half of all BTC. I suspect that most people here own more than one bitcoin, some even very many bitcoins. In the long run, if Bitcoin is successful, only the wealthiest of people in the whole world will own that much wealth in cash. For someone who is new to cryptocurrencies, i.e. for most citizens of Planet Earth, there is very little difference between the level of centralisation of both currencies.

Is this you justifying how centralized Ripple is?

No, I don't have a problem with the centralised distribution of Ripple any more than I have with the centralised distribution of Bitcoin. Ripple is just as decentralised as Bitcoin, or more so if you look at exchanges, except if you include Ripple-based exchanges like Bitstamp as part of the Bitcoin ecosystem, in which case they are equally distributed thanks to Ripple. XRP is only slightly more centralised than BTC, and even then mostly because BTC has been around for longer.

I own a modest amount of BTC and a very small amount of XRP. I intend to incrementally invest a bit more in both. I think XRP has greater upside potential simply because BTC is much further ahead on the adoption curve, but that also makes it even more risky. Both are very speculative investments, both could be very good for society as a whole. At the moment XRP is the more capable and technically advanced of the two, but that could easily change as I expect both to evolve and to adopt features from successful competitors. Zerocoin comes to mind as but one example.

Ripple is NOT centralized, XRP are. ::)

His point was that Ripple being centralized on trading balances/IOUs adds the problem of redeeming these unlike trading native assets (which STILL does not work by the way after years, I have yet to see a successful BTC <--> LTC trade using Mike Hearn's or any other contract transaction protocol!). This does not exist in native BTC, as they are unbacked and just floating on the free market, unlike IOUs.

Native BTC are actually more centralized than e.g. USD, have currently a higher rate of inflation... anyways, as I said the problem exists, but in my opinion it is not a real problem for BTC users in the first place, it can be limited to reasonable degrees for fiat users and it can be priced in as well as prevented individually.

That is true, but that's just a downside of IOUs in general, not a downside of Ripple. Bitcoin exchanges (and banks!) have exactly the same problem, and yet they do work. Undeniably they have problems too, but those are mostly related to insolvency (which is a serious problem), not to legal uncertainty as Mike suggests.

And of course, Ripple doesn't only have IOUs, it also has a native asset in the form of XRP. In other words, it is more capable than Bitcoin in this respect.


I think the potential killer advantage for Ripple is that it can piggyback on the success of Bitcoin, and more importantly on that of cross border fiat payments, which do not involve the tremendous exchange rate risks of crypto currencies. Then again, copying those features is easy enough, especially if you simply fork Ripple and use new initial ledger derived from the Bitcoin UTXO set at some fixed point in time, or through some more advanced proof-of-burn scheme.

In the end, Ripple is a currency agnostic payment and exchange network. It allows people to send any amount in any currency directly to anybody anywhere instantly. No other system, network, exchange or currency can offer a service close to this.

Cypto-coin and fiat zealots who are religiously devoted to their denomination are incapable of rising above their dogma to appreciate the need or value of a secular financial system like Ripple. Even if crypto-coin profit…I mean….prophet….Satoshi Nakamoto, was revealed to be the Ben Bernanke, and he owned up to the million+ BTC that he pre-mined, BTC fundamentalists would remain unfazed. …. They would simply spend the hour or so it would take to get 3 to 6 confirmations to create new denial mechanisms.  

If a currency or payment system cannot be used to transact business instantly, it has no place in the future. BTC cannot be used as a point of sale protocol. It is too slow….plain and simple….end of conversation.

Much to the chagrin of the fundamentalists Bitcoiners, Ripple is the only present way to make BTC viable in the future.

Why are you going through all this hassle when you can just use Bitstamp directly, without Ripple in the middle?

Scam is just about the most overused worn out word across the forum, if it doesn't meet with strict parameters of "it has to be how I want it to be" or "I don't own any of it" or "I can't understand it' then it's a scam,

Most in the altcoin section don't think for themselves so it's a completely wasted discussion here, hopping from one coin to another hating everything they sold cheap in order to jump on the next coin.

When someone sticks with a coin rather than building that coin they usually just go attacking other coins in order to take market share so there isn't any reliable info on this forum any longer.

Nonsense.   Ripple offers zero value in the payment system.

For cryptocurrency to cryptocurrency, we can already send any amount directly to anybody anywhere instantly.

For Fiat currency, even with the use of Ripple, you will still need to use the banking system to move the money to the end point.  You can't magically move US$100K from one place to another.     Someone will still need to absorb the banking fee for the transfer.

So why even create a complex system when it doesn't improve things at all?

Why does Ripple force me to manually reduce my trust with Bitstamp to zero after a transaction.  Why isn't this automatic?

Because using BTC.Bitstamp on Ripple you can trade over a dozen different currencies both fiat (e.g. CNY) and crypto (e.gg LTC). Using BTC.Bitstamp on Bitstamp internal, you can buy XRP at inflated prices or trade USD.Bitstamp, that's it.

Please send LTC using BTC (it would even theoretically possible!)...

With Ripple you can choose which part of the banking system (if at all) and which interface you want to use. You pay fees only for clearing balances - if you needed to pay banking transaction fees (or Bitcoin transaction fees for that matter) for every single trade on Bitstamp or MtGox, you'd not trade much any more.

Bitcoins (mostly) don't get traded on-chain for cash - they are traded BTC IOU for USD IOU. Currently the issuers of these IOUs must be the same (you can't trade on MtGox with your Bitstamp balance), with Ripple they only need a market path between them and can be different.

Because it does not really make sense in my opinion to change your opinion about believing that you could redeem e.g. BTC issued by Bitstamp just based on the fact that you received some.

Anyways, for something like this there are 3 possibilities:

Integrate it in the client which would then watch out for a certain trust line and address, once something is received there from this address - e.g. Bitstamp's hot wallet - sign and send a trust changing transaction. This means you need to be online when receiving funds and also means that you need to be able to ensure that you receive funds in one single payment (e.g. Bitstamp could send you 100 single USD for whatever reason).

or

Integrate it as flag or other server/protocol side measure. This would be probably the better long-term choice, might need some convincing to get someone at RippleLabs to write the code for you though or to get your own code for this pulled. I've heard about this idea (nulling trust lines after the first incoming transaction to ensure you only receive 1 single payment - could be made more generic by allowing time frames or numbers of transactions) already 2 or 3 times, so if you really implement it well, it might even get pulled even though they disagree with the general idea because it is a valid use case after all.

or

Wait for contracts to be done and hope that this can be encoded in there (it most likely can, requesting this feature might likely get the response "possible with contracts").

So should I load up on the ripples or what??  It seems all crypto is going to the moon, so I will see ya at the party..

Ripple is a decentralized exchange that can trade a LOT of currencies from various issuers. "Ripples" (XRP) are the native asset there, if you think they will go "to the moon" feel free to buy some (I prefer to get mine for free or in exchange for running BOINC), they are not the major reason why Ripple exists though.

That's probably the best advice for getting into ripple without risking much.


Though I'm still not completely sold on ripple as a whole, in retrospect I am glad OP made this thread because it is interesting to be able to look at the rippled source finally.

Could be a good feature request. Being able to set the "require authorisation" bit from the standard client would be nice too, so you can't accidentally end up facilitating payments for and owing money to Jack the Ripper.

I can move LTC to BTC just fine using any existing exchange, such as LTC to Btc-e, buy BTC, then transfer that BTC to the recipient.     

Ripple isn't making things any easier for such process.

To be more seamless, some entities can even run an currency exchange and take say 5% fee, and provide n-ways conversion service.   

There is no need for a "crypto-washed" solution in the equation, especially one that pre-mined 100 billion units of crap and attempt to inflate the value of the craps for their own greed.

Why lend Bitstamp your hard earned money without interest, and then jump at the opportunity to let them control with whom you can trade?

You can still use Ripple if Bitstamp is temporarily down. There might be a future for gateways that focus exclusively on issuing and redeeming IOUs, without offering a proprietary trading engine.

Instantly means in negligible time. The 10 to 30 minutes needed for BTC transactions is not 'negligible'. Put it in a real world application and imagine McDonald's accepted BTC. LOL...I used to get bent at the little old lady writing out checks....now I've got to wait on you and the superior BTC payment network.

As you've clearly changed the meaning of next to no time (instantly) to mean 10 to 30 minutes. By 'Ripple offers zero value in the payment system' do you mean it offers 10 to 30 times the value of the existing system?

As I said...it's impossible for zealots to grasp. When confronted with the shortcomings of BTC, they'll use every logic fallacy known....change definitions of words, set up straw men, ad hominem attacks, etc.

I didn't know that I could send you Litecoin and you get Bitcoin....let alone USD, EUR, etc. ...and no, you don't have to use the banking system to move money within the Ripple network either. For example, you can put cash in via ZipZap.

Learn the facts first, then feel free to distort them however you choose.

That's not a use case Ripple is intended to facilitate. You can of course choose to make direct XRP payments, just as with any other cryptocurrency.


The fee for the netted payments to be exact. Fees at gateways are on the order of 1%, not the 15% fee Western Union charges.


Remittances and buying selling cryptocurrencies against fiat currencies are the killer applications right now.

Stop being dumb.   Ripple doesn't enable instant payment either. Whatever your send via Ripple is useless until the recipient gets what he really wants.

If a vendor wants to receive 10 BTC for his product/service, getting an instant IOU in Ripple is pointless.   He will still need to wait for 10 to 30 mins for that BTC from Ripple to come into his real wallet.

If a vendor wants to receive $10,000 for his product/service, and he is located in a small town in China, getting an instant IOU in Ripple is pointless.  He will still need to wait for whatever amount of time needed for the money to be wired into his bank account.

Ripple IOU are the same as money on the Paypal account.
There are many people that uses Paypal all the day (making transactions), for weeks or months without withdraw their money on their bank account.
So the same will be with Ripple, with just some differences (from Paypal), no frozen accounts, no chargeback, no limits of transactions.
Every good gateway can become the new Paypal until there are people that trust him and his services.

Anyway, no one is forced to use Ripple, if you prefer, you can still use Bitcoin directly ... or Bitcoin on some Ripple gateway.

Need to withdraw diminishes as the network expands; the IOU becomes a functional placeholder for the currency. Depending on the currency, withdrawal from the gateway could be rapid---and potentially instant if banks begin to act as gateway services.

XRP itself can also be used, eliminating need to deal in IOU.

Both IOU and XRP beat BTC in speed, no contest.

Bitcoin itself is great, and Ripple supports Bitcoin for faster payment transactions.

Ripple is a promising alternative to the closed centralized payment systems that are overtaking the landscape; they are able to thrive based on the limitations of Bitcoin.

People will use good gateway directly without the need to go through an obscured crypto-washed intermediary like Ripple.

The gateway is a part of all the Ripple system, and there isn't anything obscure in Ripple.

I come to the conclusion that maybe if someone isn't able to understand Ripple, he isn't also aware to how Bitcoin works.

Is Ripple decentralized in distribution and network?

Someone fund my ripple wallet with 5 or 10 XRP to get started..  :-[

Yes.

https://news.ycombinator.com/item?id=6867324

Support  you. 
I am mining on it and I like it.

No they don't.  We have already determined that you won't get IOUs from anyone you do not extend a trust line to. Therefore the IOUs are not generally tradeable.

If you guys don't understand the system then ...

You need ~31 XRP to get started, 20 to activate your account, 10 for one offer in the order book, and 1 for transaction costs. The first two are minimum reserves, that is, the functionality won't work if you have less than that amount in your account, but they are not deducted. You get your 10 XRP back as soon as the offer is accepted or canceled. The 1 XRP for transaction costs will last you a long time because transaction fees are tiny.

If you want to get your hands on some XRP, you can buy them on an exchange, buy them from someone informally or earn them by donating CPU cycles to things like cancer research at computingforgood.org (http://computingforgood.org).

They are generally tradeable, that's why market makers exist in Ripple. As long as there is a market path between 2 currencies, you can make a transfer in Ripple. You don't need to trust the issuer that the recipient trusts.

And that's a feature, not a bug.


Of course they are, that's the function of gateways, to issue and redeem IOUs that can be traded between any pair of individuals who trust the same gateway. This is very similar to what banks and payment processors do. You deposit cash with them and are then able transfer money between accounts without having to withdraw immediately.


Don't criticise something you clearly don't understand.

A issuer should be visible somewhere for every currency in your ripple wallet. Maybe not straight when you look at balances, but somewhere you should be able to see how many btc you got from bitstamp and how many bitcoins you have issued by justcoin. Just an example. Also, how do you choose how to shorten an issued asset? I for instance issued bernankoins and it shortened it to ber instead of the "official" bek. And what happens when someone issues something let's say called "bernardo" and ripple shortens that to ber too?

Thank you for the info :)

It is visible on the "trust" tab.

Actually currency codes used "should" only be the official ISO ones (which already XRP and BTC both violate), this is obviously not enforced though. http://www.ifex-project.org/our-proposals/x-iso4217-a3 might be a solution, seems to be dormant atm. though.

If you claim to understand Ripple, show us a real use case and not some hypothetical example to articulate the benefits.

Illustrate how you can send 1,000,000 Yen from Japan to someone in US at the best USD conversion rate that is cheaper and faster way than existing options out there today.  Proof it.

No, that's the huge difference people are explaining, and you keep ignoring. It does not "take time" for someone to understand Bitcoin to a reasonable extent. Someone with a basic understanding of cryptography and computers can read the original Bitcoin paper from five years ago (as I did 3 years ago) and understand it pretty well. There is no such 8-page Ripple paper.

Anyone who can understand Bitcoin and doesn't understand Ripple isn't really trying. Could be lack of interest, lack of time, could be denial or massive cognitive dissonance, could be dishonesty.

You're absolutely wrong, in general. I read the Bitcoin paper a few years ago and I largely understood it. I read what I could find about Ripple a year or so ago, and I didn't really understand it, at least not in a big picture "How will I use this?" and "How does this entire system work?" sense. Granted I understand Bitcoin much better now than I did after reading the paper, but in terms of relative level of understanding after reading through what I was provided by the designer, it was simply night and day. That is a fact.

There was no particular difference between the two in terms of relative lack of interest, lack of time,  denial, or massive cognitive dissonance, nor am I being dishonest.

EDIT: I will clarify this a bit. I believe that I could possibly understand Ripple if I put in the effort to study it and work through the details. The problem is that I have no particular reason do to so. Giving me a few thousand free Ripples isn't enough incentive for me to care about this one out of many apparently-similar competing solutions. The difference with Bitcoin was: a) it was clear that it did something fundamentally new (as opposed to one-of-many or arguably-better), and b) I didn't need to put in that effort, because it was just easier to understand.

You can find some Ripple papers and videos here:

• https://ripple.com/wiki/Press_and_announcements (https://ripple.com/wiki/Press_and_announcements)

I like it. I am mining on it. I invest a little now becose is cheap.

For me the killer use case was and is as a distributed exchange for buying / selling Bitcoin. I learned about it just after I had learned of Bitcoin, some time in April I think. It may have been in this article: Ripple, a Peer-to-Peer Financing Network, Could Make Bitcoin Great (Or Destroy It) (http://motherboard.vice.com/blog/the-ripple-economy-could-make-bitcoin-great)

Another very promising one is remittance payments by migrant workers.

I have the sentiment that I wish the problems I point out with Ripple didn't exist and that it is just my imagination / overskepticism / whatever.  I sincerely hope someone proves me wrong.  I believe that the problem Ripple sets out to solve is really one worth solving, I'm just not convinced Ripple fits.

I suppose a lot of people say the same thing about Bitcoin, and relative to the same argument, I'm on the other side of the camp.  (though wouldn't be opposed to a better bitcoin with some new breakthrough as groundbreaking as the block chain)

Well, dealing with stuff that is not designed to be digital (e.g. most currencies on that planet) makes it really hard to apply the same measures as Bitcoin. After all, that's probably one of the reasons Bitcoin was invented in the first place.

Ripple definitely improves dealing with arbitrary assets, imho as much as possible - maybe in the future even more might be possible (BitShares for example tries to do something that goes potentially beyond IOUs), for the moment it seems to be one of the best and most developed solutions out there.


Ripple can be MUCH easier explained and understood (how it works + the use cases) if you compare it to BitPay, not Bitcoin.

Some potential use case of Bitcoin seems to be for some people to act somehow like XRP in the global financial system (e.g. you buy BTC for USD, send them back home to Egypt and sell them for your local currency there), maybe that's why they don't see the use case for Ripple itself too or feel that it threatens BTC by making XRP more useful than BTC on their system.

Ripple is interesting but it seems too expensive to be the best crypto system for international transfers, which seems to be its primary purpose.  I can transfer money (fiat or crypto) to/from the exchanges that I like to use either for free or very low fee.  But it seems the cost of putting money in and getting it back out of the ripple network totals ~2%.  Still probably lower than the old fashioned mechanisms of currency exchange or transfer, but I think it is too high, especially for larger amounts.  If I factor in the commission at exchanges, the cost doing currency exchange or international transfer using bitcoin instead of Ripple is about half that or even less, depending on volume exchanged.  Except the cost may even be negative if one times it (lucks it) such that one makes a little money via increase in btc value when converting back to fiat.  So, I think the gateway entry/exit fee needs to be much lower.  But of course the Ripple system primarily makes money on that fee (and I think that's why Ripple Labs partners with the Gateways....). Eventually (after the giveaway period) it will make some money selling xrp, but really the entry/exit fee is where the profit is and why there was so much interest in investment from Silicon Valley -- or why else, am I misunderstanding the system and what motivated it? So my guess is using exchanges will remain cheaper (and easier to understand).  Some of the exchanges I use have made a very good impression on me, and I think these will have long-term success and good reliability. As for more routine payment uses (that is, not currency exchange or international transfer), like buying that cheeseburger at McDonalds, why would anyone want to incur a ~2% expense (well, ~1% for customer, ~1% for merchant)? The cost of the "great convenience" and "simplicity" of paying via the ripple network?  But I can see it as being an early beta for something that will transition into a cheaper and simpler system.

The two main use cases I see at the moment are remittances and buying / selling Bitcoin. A Turkish migrant in the Netherlands who wants to wire 100 euros home is faced with a minimum fee of 15 euros. By contrast, sending 10,000 euros costs 20 euros, but few people send such large amounts.

If this takes off, I expect economies of scale and competition to drive down prices considerably.

That's true, and I became interested in bitcoin in part because I wanted to transfer small amounts internationally and the wire transfer fees seemed excessive. So either Ripple or the bitcoin+exchange method is much better than wire transfer, but Ripple isn't better than simply using Bitcoin as intermediate, unless the migrant doesn't have a bank account in the Netherlands and wants to transfer his cash euros to Turkey, and a local Ripple gateway accepted his cash.  But there are not very many gateways at the moment even for bank transfers; haven't researched how many accept cash for entry into the ripple network though I assume eventually they will.  And if he is using a Gateway via a bank account in the EU (I think a legal migrant could get an account easily), then it would be better to use the exchanges I think, for a free or cheap SEPA transfer.  Maybe depends on whether the folks back home can retrieve currency from an exchange more readily than from a Gateway.  Also, I like being in charge of the crypto intermediate, when I buy it and when I sell it.  I don't think that's the point at which Ripple Labs profits (don't understand enough to know for sure, but my understanding is it automatically uses the market rates) but it is leaving it up to luck more so than if I have control of the timing.  I suppose that's less of an issue when/if crypto values become less volatile, as will likely be the case.

I'm very much a "penny pincher" and pay lots of attention to fees, but my guess is, so would a Turkish migrant shipping that 100 euros home.

I'm talking with my neighbour, who is a Turkish entrepreneur, about setting up something like that. Since bank accounts are free for private citizens in the Netherlands everybody has one, so that's not the problem.


Opening a small shop to handle cash transactions wouldn't be a problem. The shop could then deal with the gateway, or maybe directly buy BTC.


Withdrawing from a gateway to the Turkish banking system is possible, but then you still incur wire transfer fees. That's not prohibitive for large amounts, but then you lose the advantage of using a crypto intermediary.


In the long term the most convenient thing would be to issue EUR IOUs and TRY IOUs (or to use those issued by some reputable third party) and to use the distributed exchange that's built into Ripple, but that will take a lot of work to deal with compliance.

Okay, that makes sense.  It would be a nice system for people who work in a foreign country for only a short time and don't want to set up a local bank account, which can be a hassle and confusing especially if one doesn't speak the language well. Or for students, etc.  The bank account also usually comes with fees.  In any case I never had the impression that Ripple was a scam, and I hope it ends up being successful and useful.

Maybe Ripple Labs should set up a Bridge for Peercoin, my favorite currency  :).

Also, I suppose if Ripple really takes off and proves to be very secure, then the exchanged money could just stay in the network, much as I almost never handle cash these days, and my money just stays in the "banking network" of credit card and bank accounts. Then the entry/exit fee is less objectionable.  I know it is trivial in your 100 euro transfer example, but if the Ripple network becomes a frequent mechanism of exchange, then that fee would add up to be significant. Less than what merchants pay for credit card use but not by an enormous lot.

That's the idea, but there would be other fees, because gateways can charge fees for letting IOUs change hands. Competition would be needed to ensure reasonable prices.

That is not the job of RippleLabs and that is the reason why Ripple is built as distributed ledger system instead of merely running centralized like PayPal: You can build this bridge yourself, proof to others that they can trust you and then operate the bridge and gateway on your own.

It is not RippleLabs business model to build every conceivable currency and storage facility there is out there, Ripple is a building block and protocol, not a company. RL doesn't operate gateways, they don't earn fees and they don't charge anything for their software.

Gateways are only needed in the near term. In the big picture...long term...they are merely transition mechanisms.

Expand your vision just a tad ... If all of the financial systems are federated under one umbrella (the eventuality of the Ripple protocol), why would you ever pull your money out of the system? For cash?...OK I use that sometimes, but that's less than 1% of ALL of my annual expenditures. (and it's getting less and less each year) Can you give me one reason why your Chinese farmer would want his money COMPLETE off the financial grid when Ripple wallets are as ubiquitous as email addresses?

I mean, think about it. EVERYONE having a free wallet ... just as everyone has free email. Your employer pays you directly. Your iPhone app pays for meals at McDonald's instantly. Businesses like Western Union and Money Gram will go the way of Blockbuster and Borders Bookstore. Banks will have to shift their revenue stream focus to mortgages and loans and away from inefficient payment systems like checks, money orders and credit cards. 

I don't know how old you are, but do you remember how fast email spread? or the world wide web? or the use of search engines? or instant messaging? or Facebook? Ripple is free, open source, and has massive utilitarian value. It will go like wildfire after Beta testing is finished.

I didn't truly think it was really RippleLabs that built bridges but that perhaps it promoted such activity and collaborated with people who do it, just as with gateways.  The Bitcoin bridge I'm aware of is completely free to use (according to how I understand it anyway, though I haven't tried it because I don't hold on to significant bitcoins for long) and so its purpose presumably is to promote Ripple (or less likely, because less needed, Bitcoin).  Similarly, a Peercoin bridge would help promote both Ripple and Peercoin, but then again maybe RippleLabs is primarily interested in promoting xrp. 

The Bitcoin bridge is operated by Bitstamp, get in contact with them and/or read the sample code (on github) on how to code bridges and the documentation (on the wiki) on which APIs to use.

https://ripple.com/wiki/Services_API#Outbound_bridges and articles about the Federation API.

Ripple is not crypto money - scam from bankers and government.
Ripple - is not open source;
Ripple - Each Ripple node is controlled by a private commercial company. It is centralized as a bank or PayPal. Not a decentralized currency.
Ripple - totally 100% with the pre-release issued by Ripple Labs, 65% were left to themselves and 35% sold;
Ripple - not anonymous;
Ripple - emission is possible in unlimited quantities;
Ripple - created by the richest states and banks of the world on the money of monopoly oligarchs, with one purpose to destroy and devalue in the public eye the world of crypto-currencies.
 It is very difficult to destroy bitokoyn, because it is decentralized. Everyone who manages the bitcoins client is peer and conducts transactions around, and everyone who picks up votes with their hashing. Bitcomoin group of kernel developers could be arrested, but new developers will just get the better.
 Take a look at all Bitcoin services that were hacked. MtGox. Bitcoinica. MyBitcoin. InstaWallet. You might lose bitkoyny, which you deposited there - debt - but if you kept the real bitkoy in their purse, they were safe. When a Ripple gateway or currency issuer is hacked, because you can only hold BTC and, for example, debt, you lose them.
   But with Ripple, all that's required is a raid-like what happened to Liberty Dollar-to kill the entire network because of its centralization. The update can be ejected to destroy all XRP and transactions - and this will work, because one object has 51% of the attack on the network. This simply can not be done with Bitcoin, if only with an international attack on mine pool operators, and when this happens, people will simply switch to solo development.
  Ripple supporters (for example, OpenCoin Inc employees who speak their own views) point to small default values that have not been disconnected from the network. Of course, this will not happen. But a sufficiently large default from the lock will lead to a crash - there is a critical mass
 States are afraid of crypto-currencies and criticize them. Ripple is not criticized by the authorities, states, politicians and bankers! You will not hear anything bad about Ripple from them.
 For several years Ripple will eat all the main crypto-currencies - this is the black hole of the crypto-currency market, launched by states and banks. The total capitalization of the crypto-currency market will remain insignificant, and the Ripple capitalization will grow due to the exhaustion of money from other crypto-currencies. When banks artificially depreciate the world's major crypto-currencies, with the help of Ripple, there will then be an unrestricted release of the Ripple (because of its centralization) and the owners' funds will also be depreciated with the help of huge inflation, and subsequently unlimited emissions Ripple will be completely destroyed by banks and their governments.
This will allow states to declare crypto money outlawed and never allow to return to private money and crypt.

 I’m an early adopter of Ripple – having used it before it was publicly announced – but I need to point out what the inherit flaws are, and why Ripple is arguably a scam.
I could have taken my free XRPs and posted propaganda in support of Ripple, but that’s not the kind of person I am. I want to expose the world to the fraud of Ripple and OpenCoin Inc – what you will never see on the homepage.

https://bitcointalk.org/index.php?topic=224365.msg2358207#msg2358207