Bitcoin Forum

OpenCoin Inc gets 80 billion ripples.

The founding developers get 20 billion ripples.

There is a hard limit of 100 billion ripples.

in other words, opencoin inc is comparable to the federal reserve. Go beg OpenCoin Inc for some ripples, you need them to even start using the service  :P

I would argue that a more appropriate model than the federal reserve is the post office, which starts out with all the stamps. Opencoin plans to begin giving away most of if it shortly. 1,000 ripples is enough to create an account, set up a trust relationship with several gateways and fund thousands of transactions. Unfortunately, making it free for everyone forever is not really possible because of malicious transactions causing denial of service attacks, ledger bloat, and so on. The use of a peer-to-peer model with no central authority should make it possible for it to get pretty close.

Joel ripple is your site? If so where can I get an explanation of how it works and if i like it how can I help?

My biggest objection to Ripple as it's commonly understood is that it's a way to swap debt that is totally uncollectible.  It will take people a while to realize that it's a currency of empty promises.  Once understood for what it is, I can see it being pretty powerful, but can't see why it being decentralized is any sort of benefit.

Case in point: Alice owes Bob, and then Bob uses Alice's debt to pay Charlie.  It's a lot of money.  Charlie tries to collect, but Alice refuses to pay Charlie, so Charlie sues Alice.  Alice denies owing Charlie anything, and Charlie can't prove otherwise.  The court won't recognize Ripple's database as being a legal way to transfer debt since it's not a legal form of contract.  Game over, Charlie got left holding the bag.

If instead of using Ripple, Alice owed Bob, and Bob used Alice's debt to pay Charlie by pulling out a pen and a piece of paper and drawing up an assignment agreement, suddenly the problem no longer exists, because courts recognize agreements like that when written on paper.

Pen and paper 1, Ripple 0.

So how again is this revolutionary?

I think the concept behind Ripple is infinite rehypothecation. If someone accrues enough IOUs, then even if many of them are worthless, they all average out. It presupposes that bad debtors will not themselves aggregate enough Ripple points to matter to the system and will be weeded out. It makes sense if we presume that social pressures will determine the average value of Ripple tokens.  It's a numbers game that needs to be based on social science. I would really like to see the algorithms that go into determining the risk and value of the IOUs, but I have a feeling that this will not be forthcoming. If they are not absolutely revolutionary algorithms, then we are looking at a system that will be easily gamed.

I think the algorithms behind Ripple will make a quant blush.

Isn't this what got the economy into the subprime mortgage mess?

This idea makes a ton of sense when you're the banker and know that you'll be able to privatize the profit while it lasts and then socialize the fallout when the whole thing collapses.  But it doesn't make for any sort of sound financial revolution that will bring the world freedom from tyranny.

I'm one of the people working on it. There's lots of explanatory material in the wiki: https://ripple.com/wiki

Ripple IOUs are just balances, just like a bank balance. If you have a bank balance of $50, that means your bank owes you $50. For me to pay you $50, I give you a check. The system processes that check and then my bank owes me $50 less, your bank owes you $50 more, and you consider me to have paid you $50. Most likely, you would only hold your bank's IOUs, so the only worthless IOUs you have to worry about is if your bank fails.

So if you IOU me for a million for mowing your loan and I IOU you ;) for a million for washing my car, then we can each buy a Maybach?

I think you would both just have a balance of 0.  Also, don't forget you have to acquire the IOUs before you can trade them.

Yes, that's right. For any particular currency, between any two accounts, there's only one balance. While you must acquire other people's IOUs before you can trade them, you can produce an unlimited supply of your own IOUs, limited only by whether other people are willing to hold them.

Sometimes we use IOU terminology and sometimes we use balance terminology. In the system, there are really just balances. So if we say "Jeff holds $50 in Jack IOUs", that's the same as saying "Jack owes Jeff $50". If Jack then pays $50 to Jeff leaving a balance of zero, this can also be described in IOU terms as Jack destroying the IOUs Jeff holds.

I've been trying to get my head around Ripple for the past few days and I must say that I like what I see so far.

I particularly like the consensus over mining approach.

I think Ripple will be good for day to day transactions, at least its good to have some competition to Bitcoin in this regard, makes for a healthy payment system landscape post FIAT collapse :)

But I think Bitcoin will still win out in terms of long term value store.  I just cant imagine leaving any significant wealth in Ripple as IOUs?  I feel like it would be safer to convert those IOUs out to Bitcoins and hold onto them like gold/silver.

Regardless, its nice to think that we can now transact in multiple free open source payment systems, and store wealth freely without ever needing the existing corrupt systems and do it all electronically with a click of a mouse.

One of the things that we're finishing up is a gateway between bitcoin and ripple. This will mean that both that you can cash out ripple IOUs as bitcoins and also that you can pay merchants that take ripple payments in bitcoins.

It just sounds like anyone could charge what they want and because it is just IOUs. Aren't we seeing a debt based currency war going on now? Every nation is devaluing their productivity by inflating their economies. It won't be long before we are mowing lawns and washing cars for one million. It just seems that this economy is way too easy to hyperinflate.

There are several things built in to try to keep IOUs pegged to the currencies they're denominated in. For example, within the system, issuers must always accept their own IOUs at face value.

Also, we expect merchants or others who accept payments to just use a raw currency. You'll communicate a price as, say, "30 Euros". If a merchant can't maintain sufficient connectivity to allow consumers to pay them 30 Euros by using 30 Euros at a major gateway, they should consider that a failure. So they'll try to maintain connectivity to one or more major gateways such that anyone with similar connectivity can pay them 30 Euros for an amount very, very close to 30 Euros.

You may have a "junk economy" too, I suppose. I don't think people will find that terribly useful, but if they do, I guess that's good too.

I think the idea is that Charlie would lose his reputation. I still have concerns about Ripple, but this isn't one of them.

There are two things that help to prevent this:

First, Charlie would lose his network. So long as the value of his network is significantly greater than the value of the money in it at any particular time, this is a very significant deterrent.

Second, while I wouldn't expect Ripple debt to be enforceable alone, I don't see why the contracts backing it wouldn't be enforceable at entry and exit points. If Charlie got $10 cash from Jack and has a contract with Jeff that says he'll pay that money to him if the ripple system tells him to, I don't see why that contract wouldn't be enforceable. For Charlie to argue otherwise, he has to argue that he gets to default on his contract with Charlie and his contract with Jeff and keep the money.

But I absolutely agree that this is a risk that should be evaluated carefully. Using the ripple system as a medium of exchange, this risk is very low. Using the system as a store of value, this risk is higher.

Don't let all the IOU stuff distract you from the fact that this is a new currency, Ripples, XRP, which is quite similar to bitcoin and related altcoins.

All the stuff about IOUs and distributed currency exchange can even be put aside for a moment as being just a clever bunch of window-dressing and public relations spiel to "justify" the hundred billion coins that a few individuals and a corporation that quite likely they are the owners of are getting all to themselves from the start so they can do various give-aways and such to lure people into using it.

Sure if the IOUs and forex stuff works and catches on that is great, it will bolster the value of those 100 billion coins, but even if it does not there is still a whole new altcurrency, with 100 billion coins in very few hands, basically a massive pre-mine in this subforum's terminology.

All the stuff about IOUs and forex might help this new altcurrency catch on with the masses, the lack of massive expenditure on proof of work might help it catch on with those who think proof of work is wasteful, about the only downside of the lack of proof of work is people who like to get their currencies by mining are out of luck with this one.

How much do how many people actually care about pre-mine? Will 10,000 free coins shut you up about that and get you on board?

If "everyone" is going to use "gateways" the decentralisation isn't really looking very P2P, its more like it plans to be centralised in the same kind of "central exchanges" we are already seeing and that some folk already complain about, that made them cry out for a P2P exchange system in the first place. In particular if a supposedly P2P exchange of bitcoins for dollars is going to really just give me MtGox tokens that will cost me notarisation of documents and mailing in of IDs to get the actual dollars that to me just seems more like extending MtGox's reach than an alternative to MtGox.

Don't get me wrong, I am in Ripple, I have my free 10,000 coins, I am tempted to let them sit a few years hoping they will go up in value. But it looks like I will still end up getting my dollars in the IRC over the counter channel even if Ripple means I can get them in return for MtGox ripple-dollars instead of directly for bitcoins. I simply do not have enough need for dollars yet for the cost of notarising and whatevering my ID, maybe even having to pay a hundred pounds for a copy of my birth certificate so I can then pay gosh knows how much for a passport to get notarised and whatevered, to seem like a tiny overhead worth going through compared to how many dollars I need to renew a domain (the main thing I have had to cash out bitcoins for so far.)

-MarkM-

That may be a problem in the short term, but I hope that we soon have a number of competing gateways with plenty of liquidity between them. So even if you trade to MtGox IOUs because that's the deepest order book with the best rates between bitcoins and USD, you could immediately exchange those USD IOUs for ones at a gateway whose redemption policies you find more attractive.

From what I understand the XRP are required to prevent DDOS attacks and spamming the system, and if IRC they may be used as an intermediary when sending any currency over the network more effeciently.  So as long as they keep giving them away for free (but restricted) or at a floating exchange rate close to free to promote adoption but discourage abusing the system then I dont mind it.

Even if the exchange rate eventually goes up a little or a lot, as long as they keep supply in order to keep exchange rates stable then it should continue to fulfil its purpose.  Yes it will make them a lot of money, but I dont have a problem with these guys earning some money for their hard work implementing and further developing.. Its one problem the Bitcoin Foundation is trying to solve.. they want to work on Bitcoin fulltime and be paid but sometime personal donations just aren't enough.

Can someone send me some Ripple coins please i have none  :'(

Address is in sig  ;)

where?  :P

rHHaTtkc2mAu77Nou6Nbk34t6ooh9LPebi

 ;D rJAJuQLVp8JJaCfP3hT7ZCrVMRTFNYQcHi  ;D

Ripple will fail because of the same reasons Diaspora failed.

Huh? When did Diaspora fail? Last I heard it was just being developed and wasn't really fully built yet, else I would have given it a try. It looked like a come back in a year or few stage of development. Did the developers abandon it or something?

-MarkM-

I think its an example of the network effect where you join up and none of your friends are there. In the same way It is pointless to use ripple if you are the only one in your circle using it.

If the people in your circle prefer to sell your personal info for basically nothing maybe leaving them behind isn't a bad thing.

-MarkM-

I think DIASPORA* is far better off being run as not-for-profit and/or as .eepsites or .onion for the Pods as well.  Yes it needs a lot more development but just because the original foundation couldn't run at a profit doesn't mean DIASPORA* is dead or dying.  It's opensource and will be around as long as people use it

It's pointless to use the community credit aspect. But I don't think community credit is going to be a big deal for a long time. I'd love to be wrong about that, of course. I think community credit is an awesome idea.

Bitcoin had, and to some extent still has, much the same problem. What can you do with the bitcoin network? Well, you can send bitcoins to people. But unless you know people who want them or have them, that doesn't help you much.

The trick is to find ways to drive adoption in the absence of large amounts of existing adoption. That is a challenge. We have a few strategies to drive adoption, but the main one is to give away XRP and offer people a free alternative to existing payments systems.

where? link please

somehow this reminds of the xkcd comic with the moral dilemma and the kill button  :P

Wow! I had NO idea this is how it was going to work. When I received my 10,000 coins, I was like, "GREAT! that should be enough to get most of my friends involved." For weeks now, I've been rather excited about the idea of Ripple and how well it could compliment Bitcoin. But, I didn't realize that I'd be contributing to the prosperity of the OpenCoin Society and their honored members.

I have nothing against this model or the reasons behind it, I was just completely unaware. I plead ignorance. Is this information public anywhere, so that I may read and better understand their philosophy moving forward?

thanks,
s.

How do you get 10,000 XRP I only have 411 and can't send any to my friends who want to test it.  This is my wallet - rJAJuQLVp8JJaCfP3hT7ZCrVMRTFNYQcHi - and this is one of my friends who I can't grant any IOU's too or send any XRP - rqXLcc5EUZpMihsJ6c4C6H3pm7CSxcf7B - I have other friends too I'm trying to get to test the system.

what i need some coins too  :D

rsuvuGXuWdoRUJXiLQ7z9kyM4tjuXgrZJs

well considering that none of my friends have accepted my invitation. this seems like a perfect opportunity to test out the system.



just sent 1,000 to rJAJuQLVp8JJaCfP3hT7ZCrVMRTFNYQcHi
and another 1,000 to rsuvuGXuWdoRUJXiLQ7z9kyM4tjuXgrZJs

please let me know if you got em'

s.

Cheers bud i got them  :) :)

Thanks  :)

edit: sent on to friends to try as you need a minimum balance of 400XRP to perform a tx don't you?

It would be nice to see proof-of-meaningful-work based ripple coins come up. For example seti or folding@home could hand out ious for work done.

I was under the impression that XRP are meaningless except for spam protection. They're like Bitcoin in that they have no physical backing, but also require trust.

Why not use BTC IOU's within Ripple for this purpose? Or grant XRP only by sending BTC to a public-key-only address? ("Burning" them)

If it IS a premine, then anyone should be able to fork and start a new ledger which backs the anti-spam currency with Bitcoin. Would such a fork be able to cooperate with an XRP-based network?

If it's not a premine and no one cares enough to fix it, I can understand why this added complexity isn't worth development time.

Nobody's figured out how to do this yet, it's a very hard problem to solve.

See this thread:
https://bitcointalk.org/index.php?topic=133096.msg1541453#msg1541453

Ripple = 100% premined coin

Ripple won't ever succeed  ;D ;D ;D

Joel,

Why would someone want to run a ripple server?  With bitcoin, miners are rewarded.  With ripple...???

Thx.

Jim

How I create ripple account? The site keeps loading forever when I click start ripple

You need a browser that supports websockets and if your using a proxy, it also needs to support websockets.

Any android browser that can do that?

Perhaps Chrome? On desktop it supports websockets, but on Android it may not (Mt. Gox Live doesn't work.)

From the Ripple wiki:

"If you hold someone else's IOUs and they default, you are out that amount of value.
Even the most trustworthy people may default due to death, family emergency, or other circumstances beyond their control."

So how is this gonna work for bigger amounts?! I can safely buy an appartment with BTC, but I woudn't risk doing this with Ripple.

You would have to find a gateway you trusted sufficiently. Ideally, we'd have gateways that were regulated financial institutions insured by governments. Since gateways always hold fiat that they owe to someone, this should be possible because it fits an existing regulatory model.

You do have to manage risk with Ripple. That's the tradeoff for being able to use fiat currencies in Bitcoin-like ways.

Could there be more than one type/kind/flavour (or some such) of gateways, so that fiat gateways might always hold fiat that they owe to someone but other gateways (gateways other than fiat gateways) might owe things other than fiat, might owe no fiat to anyone, in fact might be as far as the fiat world is concerned fully funded debt-free entities?

If so then maybe, farther/further, might there be some way some how some such gateways might not be able to divest themselves of the call options they issued by merely tendering some species of fiat in liue of the actual contracted item, commodity, substance, or service?

("Sorry, you owe me one bitcoin. If you think one bitcoin has some correspondence to any kind of fiat, prove it by tendering one actual bitcoin, I don't accept fiat..")

(Maybe needing to avoid the term "debt", maybe also the term "owe", so maybe "Sorry, the contract says you will deliver/tender unto me one actual bitcoin. I'm not sure what that so called fiat is or imagines itself to be but it sure as heck is not an actual bitcoin...")

-MarkM-

Absolutely. We have lots of ideas for how we think people will use the system, but we try not to limit how people might use the system. We collect use cases so that if they're at all plausible, even if we don't think they're likely, we can try to make them possible. Because you never know.

Bitcoin behaves just like fiat in the Ripple system. Gateways can hold them the same way they hold fiat so you can transact them on the Ripple network. The same goes for gold.

We use the term "debt" very flexibly. When you have $1,000 in a bank account, the bank owes you $1,000. The bank offers the service of owing you money. Ripple "debts" can also be viewed as someone holding someone else's money.

I still don't get it. At least Bitcoin is a proven technology using a torrent network with a distributed ledger file. What technology makes Ripple unique?

Bitcoin does not operate on the BitTorrent network; they are completely different P2P systems.

I would guess that Ripple's killer feature would be the ability to pay people by rippling value through a long trust chain. Alternately, it can function as a decentralized exchange for IOUs for currency held at the gateways. And alternately to that, it's just a straightforward, easy-to-use, automated version of the clearinghouse-type systems that big banks use, meaning individuals now get to do what only banks were logistically able to manage previously.

Now, I suspect that operating an unlicensed and unregulated bank transacting in "real money" is a good way to get into trouble with your local government, but nobody seems to have brought this up as a reason not to use Ripple, so I guess it must have been addressed somewhere.

It is probably addressed somewhere within your jurisdiction's existing body of law in which case your lawyer might well be able to help you zoom in on the relevant parts and advise you as to how best to proceed from there... and if not, then possibly precedent might cast some light on the subject, and, who knows, maybe it could turn out there is room for new precedents to be established...

-MarkM-

Here's a question.. if I start a gateway and send out a bunch of IOUs in various currencies and then after 3 months decide that I dont want to continue.. I dont know who has the IOUs and how far they have travelled throughout the network..  I want to be honest and payback everyone what is owed, but how do I force them to repay the IOUs?

I could advertise that IOU holders have 2 weeks remaining to claim back their IOUs before they become worthless.. but maybe not all IOU holders get the message.. doesn't seem fair.

Lets have a try at re-wording, or re-imagining, or re-casting that story...

<imaginaryquotes>

Here's a question. If I have launched a small business, and it is trusted in various currencies by various people, and a time comes when I can see that running that business myself is not really going to fit in with other things going on in my life or other opportunities I feel I would rather pursue... How can I find someone worth of being entrusted to take over that business without basically screwing over the people who have extended trust to it; in particular those who currently happen to be its creditors?

</imaginaryquotes>

Maybe thinking along those kinds of lines - it is a Ripple account with an existing trust network and existing creditors - instead of being married to it being somehow you, your actual self, going forward... That might make it sound like less of a catastrophe and more of an opportunity?

Or, of course, maybe that just sounds like trying to wiggle out of personal trust relationships that thought they were trusting you, not some abstract entity being cultivated for sale to gosh knows what brand of villian?

I have seen before, on the internet, times when a personal site, a personal project, with users there primarily out of personal loyalty/trust to a person, a person trusted never to sell thier personal information, suddenly found that new owners to whom athe site had been sold had implicitly been sold their personal information! Wow, what a betrayal! Yet the magic of "abstract persons" can in some cases somehow pretend that the personal information of the users was not sold, their privavy not vialited, because baitandswitch.com, the former and current owner of that personal information, still owned that information,  and had not sold it at all! It itself had been sold, but that did not constitute sale of the inforation in its possession!

So a whole lot of this comes down to whether you feel you were totally upfront and clear as to whether the trust relationships the account was being entered into by its trust line partners was them trusting you, personally, regardless of what account or accounts you might or might not from time to time maintain in various places real or virtual, or was to be taken as, and entered into from the get-go, as trust in a particular Ripple account that only happened at the time they chose to enter into the relationship to be under your administration / have you at the helm / be using you as its data entry clerk to have its instructions to ripple typed into ripple?

The whole imaginary / virtual "entities" concept can get very strange sometimes...

-MarkM-

Ok, to narrow the focus of my question a little.. I start up a gateway and pre warn everyone that signs up that I will only be open for business for 3 months.. I dont want to sell the business, just to close it down.  I get 100 users and send them IOUs.  Those 100 users trade the IOUs onto another 1000 users..

When it comes time to close down, the original 100 who signed up are well aware that they need to redeem their IOUs before the closing deadline, but the other 1000 users have no idea, and I have no way to contact them or to force them to give back the IOUs.

So even though I would like to close up shop with zero IOUs outstanding I have no way to get them back.. I have no option but to walk away leaving some people holding the bag??

You could set a flag on your account to only allow people who you approve to hold your IOUs. That would avoid the scenario entirely. You could have a simple click through people go to in order to agree to your terms and gain the right to hold your IOUs. (Your IOUs can still ripple through people who aren't allowed to hold them.)

But in the scenario you explained, you're not really leaving anyone holding any bag. You have no obligation to someone who holds your IOU other than those imposed by the system, which you can't prevent.

They will be harmed by the likely drop in value of the IOU, but that's the risk they chose to take when they agreed to accept your IOUs without a redemption agreement. Absent a redemption agreement, you have no guarantee that an IOU won't decrease in value or become worthless. This is a decision you must make intelligently when you extend trust. You can't tell if someone is trustworthy or untrustworthy inside the Ripple system, you have to look at the real world.

So basically anyone who takes on my IOUs, its their responsibility to check the redemption agreement first and find out that the redemption is only valid for 3 months.

If someone doesn't bother to check that redemption agreement first then any financial loss is their fault for not doing their research?

Harsh, but makes sense.  You certainly have to be careful in this new Ripple world :)

Yes, I think this is the key.  With Ripple we can each be like banks before banking regulation, e.g. you can deposit your "gold" (e.g. BTC) in my bank in exchange for my banknotes (IOUs).  That's what trust really is in this context.  When we make a deposit in a bank, we are trusting the bank not to close in three months and run away with our money.  So ripple essentially lets each of us be a bank.  So if you trust me, e.g. deposit money in my bank, you risk me "failing."

I am a newb and may be totally off, but this is a lot like what it sounds like reading the wiki and the various threads.  What makes it extra confusing is the parallel currency that is used to "pay" for our IOU transactions.

Still Ripple through! Nice detail, very nice. This stuff certainly conveys a sense of having been "thought through". Nice work.



Try the other way around, too. This new cryptocurrency is a lot like bitcoin, but has all this extra-confusing currency-exchange and being-a-bank stuff that makes it extra-easy to exchange it for not only bitcoins but any other ecurrency, but even for fiat, apple dumplings, gold. or anything at all if you are gutsy enough, and risk-tolerant enough, to believe people will actually honour their IOUs.

"They" can say all they want that is is not a currency, until they are blue in the face and more, but just its actual functionality whatever the heck anyone calls it makes it work like one and its difference from all others in the system, as the native functionality, the native local currency, it works more like one for practical purposes than the IOUs even though the IOUs are more like 'normal fiat money" than it is. XRP is like "that most useable as a medium of exchange commodity, that naturally comes to be used as currency", the IOUs are all the fiats, that, if they have any value at all, derive their value from someone or some thing's "obligation" to make good on them.

So even if it is "a commodity" not "a currency" it is a "commodity" more like "gold", maybe more like "gold with built in antigravity to make it more convenient to hold and transport", while also being "already stamped into convenient assayed and measured form for convenient assessment".

In short if its not a currency, its something even better than currency that does the same job but better. :)

Oh wait, isn't there a word for that?

Oh yes, there is! It is "another type of bitcoin", a "proof of work -less bitcoin"!
 
-MarkM-

Here's what I think about ripple. Please correct me if I'm wrong!

1. Trusting a person, a gateway or a bank is too dangerous. Even if they don't default (that's a big if), they can make you illiquid.

Example 1:
A wants to pay B.
B trusts bitstamp.net, but doesn't trust A.
A has "1 BTC IOU from bitstamp.net". That's pretty decent money.
A pays B with "1 BTC IOU from bitstamp.net". Everyone happy!

Example 2:
A wants to pay B.
B trusts bitstamp.net, but doesn't trust A.
A has "1 BTC IOU from bitstamp.net".
A had previuosly extended some trust to C.
C borrows "1 BTC IOU from bitstamp.net" from A and cashes it out from bitstamp.net.
A logs into ripple, hoping to pay B with his good bitstamp.net money...
BOOM! The only thing A now has is "1 BTC IOU from C". The IOU might be valuable IRL, but he's out of money within the Ripple system, because no one trusts A or C.

2. The only entity to trust with USD would be the Fed, the only entity to trust with EUR would be the ECB. Those are the only entities that will always be able to pay back their IOUs. But we don't need ripple for that – that's the current situation in the world!

3. Ripple would make it easy for anyone to become the central bank and issue their own currency (however, I don't see that on ripple.com yet). If ripple enables online community currencies, will they be better money than a global bitcoin-like currency?

this.  it all smells a little like a ripple bank run.

No. The reason we got into the "mess" is because the government coerces citizens at gunpoint to behave in certain ways. The most egregious being that we are forced to use Federal Reserve Notes as legal tender, and that the production and use of alternatives are punishable.
 

That is what the Brits (http://www.devtome.com/doku.php?id=britclan), the Canucks (http://www.devtome.com/doku.php?id=canucks), the Martians (http://www.devtome.com/doku.php?id=martians), General Mining Corp (http://www.devtome.com/doku.php?id=general_mining_corp), General Retirement Funds (http://www.devtome.com/doku.php?id=general_retirement_funds), the (galactic) United Nations (http://www.devtome.com/doku.php?id=galactic_united_nations) and the BitNickels folk have been experimenting with all this time in the background. They tried setting up as blockchains because blockchains looked promising, then found out getting people to merged-mine them enough to secure them was looking to be way too much of a problem, especially with all the hostility of bitcoiners toward more blockchains. Currently they are implemented using Open Transactions (https://bitcointalk.org/index.php?topic=53329). Next up to explore the potential suitability of as a platform for such projects is Ripple...

-MarkM-

Exactly. The IOU game has been around for hundreds of years if not more, 'ripple' is just a new fancy term to describe it. What it is trying to do is to reinvent the entire banking system on top of a block chain. Although a main difference is this is known as free banking (practiced in the US 1837-1862) .

The focus of many replies here is based on comparing Ripple to Bitcoin - but shouldn't we really be comparing it to Visa or Paypal?
Currently I have to have a paypal account if I want to send money to another person who has a paypal account.
It seems the point of ripple is that it allows us to pick our own gateway - the gateways do not need to be dependent on each other, we just need to trust our chosen gateway.

Anything would be appreciated. New to this!


 :o

rPQgi2bqKmRxXq3dypBkttWJQbS3N7Hh1L

Short term: Yes, exactly. Ripple is perfect for this.

Long term: People may use Ripple to do things completely different from what they currently do with Bitcoins and with payment systems.

what else could they use it for?

i got u for 500.
when they reach $42/each, maybe u can return the favor ;)

edit:
hey, it looks like there's currently a ripple giveaway https://bitcointalk.org/index.php?topic=145506.0 (https://bitcointalk.org/index.php?topic=145506.0)

hahaha thanks man!

Community credit (borrowing money from strangers). Social credit (borrowing money from friends). Self-executing contracts. Holding preferred currencies as stores of value and switching to preferred currencies for exchange as needed. Providing liquidity for a profit. And who knows what else.

Also:

---

It is a slow day in a little Greek Village. The rain is beating down and the streets are deserted. Times are tough, everybody is in debt, and everybody lives on credit. On this particular day a rich German tourist is driving through the village, stops at the local hotel and lays a €100 note on the desk, telling the hotel owner he wants to inspect the rooms upstairs in order to pick one to spend the night.

The owner gives him some keys and, as soon as the visitor has walked upstairs, the hotelier grabs the €100 note and runs next door to pay his debt to the butcher.
The butcher takes the €100 note and runs down the street to repay his debt to the pig farmer.
The pig farmer takes the €100 note and heads off to pay his bill at the supplier of feed and fuel.
The guy at the Farmers' Co-op takes the €100 note and runs to pay his drinks bill at the taverna.
The publican slips the money along to the local prostitute drinking at the bar, who has also been facing hard times and has had to offer him "services" on credit.
The hooker then rushes to the hotel and pays off her room bill to the hotel owner with the €100 note.
The hotel proprietor then places the €100 note back on the counter so the rich traveller will not suspect anything.

At that moment the traveller comes down the stairs, picks up the €100 note, states that the rooms are not satisfactory,pockets the money, and leaves town. No one produced anything. No one earned anything. However, the whole village is now out of debt and looking to the future with a lot more optimism.

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This is an example why we have monetary politics and money printing. The tourist essentially extendend money supply. Only this enabled the villagers to cancel debt. Obviously, we don't want this anymore, as the central banks today never remove these additional €100 eventually like the tourist did, and this is what's leading to perpetual inflation.

The real problem here is simply lack of information. Ripple is a much more elegant solution as it can clear mutual debt instantly and automatically.

 I always like Ripple and it's great to see it finally being used.

A few things though.

1) It's supposed to be decentralized and thus protected.. but only coinInc has most of the XRP at the moment, so we are going through a bootstrapping situation... but unlike Bitcoin which had an early adopter and proof of work setup we aren't a messier distribution?

2) The interlinking still makes me nervous even with the instant IOU cancelling out possibility. I'd like to see an example of this with say 3 of us users. For example, Barclays is the most connected company in the world so what can we do if we wanted to get rid of them?

 Another way to describe Ripple is to call it a bit like digital Hawala.

Am I right in thinking XRP aren't intended to have massive worth in of themselves and are instead intended just for use in stopping spam? -or are XRP actually valuable? Do they have a price now? -even with a big entity holding the cards and flooding the market regularly (and hopefully can continue)

I'm not quite sure I follow you. You decide who you trust to hold money for you. If you don't trust someone to hold money for you, just drop their trust to zero and add trust for others.

Jed McCaleb has stated that Opencoin's business model is to hold XRP. XRP are intended for use in stopping spam (to be more precise, to judge the relative importance of transactions at times when transaction fees are scarce and to impose a "cost" on space in the ledger), but there are certainly other ways people could use them.

I'm pretty sure he's right that men with guns show up if you make enough money and don't pay your taxes.  The government requires taxes be paid in USD.  Additionally, the US government has confiscated gold previously.  Don't think they won't do it again.

No it isn't, because...
...you're never given the choice. The services are a ex post facto justification. They take the money first and then make up a story about it to explain why what they do isn't armed robbery.

If I steal your wallet at gunpoint, and then shine your shoes for you before I leave, you wouldn't accept that you owed me your wallet because I gave you a service that you didn't ask for an couldn't refuse.

Is there anyway to set a fractional amount of trust, for example trust someone at 50% face value of their IOUs? The biggest problem I see is if you hold good money (trustworthy IOUs) in your ripple, quick acting people (or people running smart scripts) who you trust will quickly swap out this good money for their not so good IOUs

example situation:
A holds $100 of mtgox IOU (assume very trustworthy)
A has acquaintances B1 to B100 who A doesn't know very well, maybe from a forum, so only trusts them with $1 each
As soon as $100 mtgox IOU hits A's account, B's scripts quickly notice and swap their own IOUs for part of this mtgox IOU
Now A has $100 in $1 IOUs from B1 to B100 which may only be worth $50

Its in the spec but maybe not provided yet with a user-interface in the GUI client.

-MarkM-

That is correct. It's implemented in the server and works on the network but there's no easy way to set or view it yet.

Two interesting reads on RIPple outlining inherent flaws as described by the authors...

http://blog.phauna.org/2013/05/the-trouble-with-ripple_25.html
http://polimedia.us/trilema/2013/ripple-the-definitive-discussion/



on a side note i went and took a peak the Ripple forums... ran by a bunch of abusive admins who crap all over their members... not a very nice place :D

As he mentions, we're already adding a way to control this. If that's his only complaint, then he'll have none when this is changed. (You will be able to set an option on a pathway. When that option is set, funds can only flow out from your account along that path if it's the source of a transaction, if the input pathway to you had a negative balance, or if you placed an offer.)

He just doesn't get Ripple and he doesn't look interested in understanding it either. His core argument is that Ripple is bad because it allows people to do bad things. I reject that argument fundamentally. The right question is whether Ripple makes it possible for people to do good things without forcing them to do bad things.

Can you post a link or two? I'd like to see what you're referring to.

I'm the first person Jed McCaleb hired to explore whether the double spend problem could be solved by consensus rather than proof of work. I'm also OpenCoin's Chief Cryptographer. My signature mentions that I'm an employee.

Yes. Part of my job is to explain Ripple to the Bitcoin community.

I honestly can't comprehend the logic behind this. If you think my arguments are weak, they should be easy to respond to, you can put in even less effort than you think I did.

I asked you to post a link or two. You didn't post any links. I still might search for it to see. But you have to remember, I asked for those links while I still thought you were asking honest questions and open to reason. There's very little point in engaging with you know that I know you aren't.

You can't reason a person out of a position they didn't reason themselves into, I guess. As for "drinking the kool-aid", I'm not the one saying things like "Imo the hype of Ripple is due to clever marketing and awarding social media sites with free xpr and for the sake of humanity I hope Opencoin and Ripple die a quick death." That sounds like the kind of thing a person who had drunk the kool-aid would say to me.

Perhaps the lack of full decentralization is one of the most popular criticisms of Ripple.

For beginners this does not seem such a big problem. However, for the "veterans" of the industry, decentralization is very important. Proponents of decentralized crypto-currencies consider the Internet to be an exemplary decentralized system: the flow of information flows is free and open (with some restrictions) in the absence of a single governing body.

At the same time, the other part of the crypto community is ready to put up with concentrated management, since the reverse, in their opinion, is inefficient. The developers of Ripple recognize that XRP works somewhat differently than the same bitcoyne, and is not as decentralized as they would like. But has XRP become the best form of digital money than bitcoin?

I think the several old cryptos will be enough for the market. They also can be used in ICO (ITO). Why we create a lot of altcoins and after that decide which better?