Since then, the price of XRP has changed by a factor of 40 or so. It's hard to justify assuming that the level will remain constant. At 27 cents (the price as I write this), that would be about $80 million per month. So long as we're the largest holder of XRP, anything that significantly pushes down on the price of XRP and its prospects for long-term success in terms of value and liquidity is against our interests. Our investors are not looking to make a quick buck.

I have no special knowledge of what happened with coinpayments and it may or may not relate to the quality of their XRP integration. But I have seen several issues caused by poor integration of Ripple. I just want to state again that we (Ripple) are willing to work with companies that want to integrate XRP to ensure they are aware of best practices, commonly made integration mistakes, and so on.

In particular, it is absolutely vital to keep in mind that all the information in the transaction itself is supplied by the user and should not be considered trusted except as an indication of the user's intentions. The servers then process the transaction and report what actually happened, outside the transaction. Because things like varying exchange rates in cross-currency payments can be involved, it is not possible for the transaction itself to describe what actually happened. It is not possible for the system to change the transaction to reflect the results of its execution because it is signed by the user and its hash is the transaction ID, which must be immutable to make it possible to track the transaction through its lifecycle, from before it's executed until after.

For things like the destination tag, all you care about is what the user wanted the destination tag to be. But for the amount, for example, you don't care what the user wanted the amount to be, only what the network was able to actually deliver.

It is also important to keep in mind that a transaction succeeding just means it did something. You have to dig into the metadata to see what it did.

Stellar copied Ripple's implementation of arbitrary assets. For a system that supports arbitrary assets, you have two fundamental choices:

1) Make some way for people to keep track of all the assets they might hold, including worthless ones. You can let anyone pay anyone else anything, but the recipient might consider the asset worthless.

2) Only allow people to send others assets they've agreed to accept. But if you send someone an asset, they must consider it a payment.

Ripple chose the second option, and Stellar copied our code. So they also work this way.

So you must agree to accept (with a transaction on the ledger) any asset (other than the native asset) before it can be sent to you. I would assume Stellar wallets make this reasonably easy to do as Ripple wallets do.

Creating a trust line is analogous to opening a bank account. If you open a bank account and you tell people to pay you by depositing into your bank account, you are trusting that bank to hold your money for you and agreeing that if people make your bank owe you money, you consider them to have paid you.

I agree that we are using the value of the XRP to create liquidity.

No party gained any artificial bias. The 80 billion XRP that was gifted to Ripple had *zero* value. Anyone else could have done exactly what Ripple did and gotten the same result.

I agree that in no way is the distribution of XRP decentralized.

I think that's an entirely fair statement. When I talk about decentralization, I am only talking about the operation and governance of the network, not the distribution of the token. If you're talking about the distribution of the token, that's entirely different. I see many reasons why you would want operation and governance to be decentralized. To be honest, I see absolutely no reason you would want distribution to be decentralized anymore. Experience since 2012 has shown that just doesn't work very well. But the market will eventually decide.

At the time I first stared working on what became the current Ripple, I saw no reason to want an alternative to PoW. I genuinely believed that it would be inherently fair and decentralizing and would foster good governance (if any was needed) by aligning interests. We now know that is not entirely true, though of course PoW continues to work quite well. But it does not ensure decentralization by itself nor does it necessarily foster good governance. Those things still take work, and to some extent you are fighting the technology.

The biggest problem with PoW though is simply that it cannot be scaled. There is not going to be one blockchain to rule them all because too many people, for legitimate reasons, want too many different things from their blockchains. Some people don't want any complexity that has a performance cost -- they just want fast token movement. Some people have use cases that require more complexity (like cross-currency payments). And PoW won't scale because each such system has to find some way to incentivize the PoW needed to keep its chain secure. There is no known way for smaller systems to do that. Distributed agreement protocol do not have this limitation, though they cannot do an initial token distribution to people who waste power.

Thank you for confirming that you asked a question you already knew the answer to just to make me needlessly jump through a hoop rather than asking an honest question or making an honest argument.

Okay, we're done. I already made it very, very clear that I was only going to respond to an honest question and not an attempt to pretend that you're replying to me while making me needlessly jump through a hoop for amusement. You may have the last word as many times as you like. If by some chance you do actually happen to post, likely by accident, an honest question, I'll probably still reply to it because that's just how I'm wired.

If you ever find yourself in the San Francisco area, let me know. I'll buy you lunch and we'll talk over a meal. I bet you're a smart, honest guy in person. That's the person I want to engage with.

I'm not sure what you mean by "the question". If you have some question you actually want an answer to, ask it and I'll happily answer it. But if you know the answer and want some explanation about the answer, don't ask me the question you know the answer to. State the answer to the question and ask me the about the thing you want explained. Ask the question you actually want the answer to and I'll answer it.

But all I saw before was: "For the XRP that ripple has kept to themselves, for what price was this XRP bought for? Or did they just magically allocate it to themselves by not paying a penny?"

It's common knowledge that the founders gifted Ripple 80 billion XRP, primarily to align incentives. One of the disadvantages of distributed agreement protocols like Ripple's consensus is that, unlike PoW, there is no known way to use them to perform an initial distribution of a token. While they do have many advantages (particularly, much faster certainty of confirmation), they do have some disadvantages as well.

Personally, I don't see this as much of a disadvantage anymore. I honestly did back in 2012 or so, when I still thought that PoW would automatically lead to decentralization, censorship resistance, and even provide a way for people with spare computing power to make a little extra money. We now know that it has not quite delivered on that early promise. It has had a naturally centralizing tendency because someone will have the lowest price on electricity and ASICs and that has resulted in a situation where China could censor bitcoin transactions if they want to. It has also sucked many millions of dollars of value that bitcoin created and given it to electric companies and semiconductor manufacturers. Worse, it's turned miners into major stakeholders whose incentives do not always align well with the users, particularly with respect to transaction fees.

By contrast, Ripple's model has kept the value that the network has created in the hands of those who created it and those who supported it rather than those who wasted the most electricity.

When people raise honest concerns, I address them honestly. When people mindlessly repeat FUD, make blatanly false accusations, or demand I jump through hoops so that they can continue to pretend they're replying to me, my response is not to try to mine the filth for the honest concerns buried in it. You can find lots of places where I address honest concerns and acknowledge Ripple's weaknesses when responding to people who also honestly acknowledge the weaknesses of other cryptos.

The history of Ripple is well-known. This is a perfect example of what I'm talking about. You are not honestly raising a concern. You are just asking me to repeat a history lesson for you specifically. If you had an honest concern about the initial distribution, you would explain some way in which what happened concerns you, not ask me to repeat it for you.

Using our XRP as a bank account now is not a very good strategy for us. We're primarily VC financed and prefer to use our XRP as a strategic weapon, using it to incentivize partners and build alliances.

You only have to ask two questions:

1) Is Ripple's consensus algorithm capable of operating in a decentralized way?

2) Is it plausible that someone could have accidentally developed such an algorithm without intending it to be used this way?

Satoshi's biggest breakthrough was finding the first way to solve the double spend problem without a central authority (proof of work). Our first breakthrough was finding the second way (a distributed agreement protocol that doesn't require a leader or complete prior agreement on the participants).

If you're not going to respond to my arguments, don't pretend to.

Yes or no, do you think increasing decentralization is in Ripple's interest? Yes or no, do you think our technology is capable of operating in a decentralized configuration?

"The questions your posing are mute points..its simply you changing your track because you've been called out. Your trying to cover it up by saying decentralisation is good"

Do facts matter at all to you? Why is it so much more important to you what we say than what is actually true? Is decentralization good for us? Yes or no? Defend your answer. You cannot do so, so you change the subject.

Why aren't you up in arms at the bitcoin community for allowing China to decide which transactions go in a block? Maybe they're not focusing on that problem because nobody is calling them out on it. If nobody's making it a big deal, maybe that's because it really isn't a big deal. Do you think the bitcoin community should make this problem a major focus right now just because I'm making a big deal about it? Or should they focus on the actual day-to-day issues their actual users are facing? So even if you're right, you're just accusing us of being sane and rational and not making something a priority when it actually isn't to real users.

It would be. But we really want to succeed on a level playing field because we think that will bring the broadest adoption and be best for the industry generally.

Except we said from day one that we would open source our code. Lots of people said we wouldn't do that. We patiently explained that there was absolutely no incentive for us not to open source our code and lots of reasons for us to open source it. Specifically, the more people have to trust us, the more that's an obstacle to our success. We love for people to trust us, that's all good for us. But we hate for people to have to trust us, that's all bad for us.

We carefully designed a system so that absolutely no trust in us is required by the system's design. And we have a track record of progressively improving decentralization. We've carefully explained the obstacles to decentralization, our plans, and our progress.

Centralization is of no help to us whatsoever. The day we abused any power we have, we would do so completely in the open with cryptographic proof of our betrayal. That would be game over for us. Decentralization is all win for us.

When we do what is in our own interest, as we've always promised to do, you complain that we only did it because it was in our interest to do so! Well, duh. We've carefully designed a system that aligns interests.

Let me ask you a few very specific questions that I'm 100% sure you'll never answer with actual facts:

1) Do you think it would be bad for us if XRP was unarguably more decentralized than bitcoin? Isn't it clear that would be awesome for us? If not, what downside do you see?

2) Do you think our technology is incapable of being fully decentralized? If so, clearly explain why.

3) If it's in our interest for XRP to be more decentralized than bitcoin and our technology is capable of it, why do you think we wouldn't be aggressively pursuing it?

Yeah. I put solar panels on my roof. I like those solar panels a lot, but I'd rather have nine and a half million dollars.

I think the big drop from 42 cents to 20 cents was largely due to shaking out people who bought in just because of the sudden increase in price and had no confidence in long-term viability. Probably also some people who bought in very cheaply sold out enough to ensure their financial security.

Recently, the swings have been much smaller. There seem to be enough participants who see drops as a buying opportunity to hold for the long term.

All of the major cryptos seem to be setting new all time highs every few months. This has taught many people not to sell on a drop. I do think that it's inevitable that sooner or later following this practice will cost some people some significant amounts of money, but for the moment this seems to be the smart bet. I've bought and sold many cryptos over the past seven years. I've regretted many sells but not a single buy. I sold 40,000 ETH at $1, and was thrilled to do it at the time. Had I held those ETH today, the profit on that would have exceeded every loss I could ever have made in the space, even had everything else I ever bought dropped to zero.

I would advise these four rules:

1) Don't buy into anything you don't believe in. Don't try to knowingly profit from a scam.

2) Don't sell anything at a loss unless you don't believe in the project anymore.

3) Don't sell anything at a profit if you still believe in it, unless you think you're moving to an even better opportunity or are taking significant profits.

4) Don't risk anything you can't afford to lose.

The concept of "premining" is not applicable to coins that aren't mined. And, in any event, it's quite clear now that PoW isn't the magic equalizer and decentralizer that we all hoped it would be back in 2008-2012. There is no sense in which it is morally superior to give coins needlessly to those who waste the most electricity over those who built the system.

We've explained our strategy. Why would you ask us to explain it again exactly?

The big advantage to a coin where the creators keep the vast majority of it is that they can use the value of the token to incentivize the provision of liquidity. Nobody has that kind of ability with things like bitcoins because nobody holds enough of the value.

A long time ago, when XRP was essentially worthless, the company gave me one million XRP. Also, I participated in the first XRP giveaway on bitcointalk (at that time, there was no rule prohibiting employees from participating) and got 50,000 XRP. All other XRP that I hold, I purchased on the open market.

They are paying me a market rate, comparable to the offers I've gotten at other places. I don't think I need to disclose my salary to you.

I am happy to admit real problems with XRP. I have no need to lie or be deceptive. I'm happy to engage arguments head on and honestly disclose our weak points. If Ripple doesn't want to pay me to be honest, I'll find a job elsewhere. My integrity isn't for sale.

I don't know what you're talking about, honestly. I have no knowledge of Ripple using XRP to induce Cryptsy to support XRP and doubt that they would have because that's just wasn't a priority for us back then. But if so, I'm not sure what you think would be wrong with it.

The record is public. The last time someone (maybe it was you, I don't remember) said this, it was thoroughly debunked. I've gotten several emails and private messages from people who participated in that first giveaway describing things they were able to do for their families with the money.

To be clear, that is the use case that Ripple, the company, is currently pursuing.

Exactly! And to get to that great future, we need a phenomenal bridge between where the money is now and where the money will be in the future.

Right. The horse industry could have pivoted to survive in an automobile-based world. You can sort of argue that they did. Similarly, music companies could have reigned in a digital music world, they just didn't. It's certainly possibly that banks will die as the economy changes with new technology. But the smart ones will try to hold on as long as they can by improving services and cutting costs. It's certainly way too early to say that there's no business model around modernizing banks. They're handling trillions of dollars worth of payments today and right now that's still increasing. We can certainly pivot again in the future.

Today, yes, because we think that's the best use case to target today. After all, banks have lots of money and handle trillions of dollars worth of payments.

And Ripple will have nothing to do with banks in that future. You don't turn the wheel of your car because there's a curve 30 miles ahead. We're quite agile, we've pivoted before, we're aimed at where the money is now, and in twenty years, we can pivot again. Of course we don't have an assured future. But we'll do our best to keep aiming at the best targets.

There are really a few pieces here:

1) There's ILP. We hope that will provide the bridge between different ledgers that record value. Those ledgers can be traditional banking ledgers, they can be decentralized public ledgers, ILP doesn't care. This is what avoids us all having to transact on the same system.

2) There's XRP and its ledger. This is a system that permits pseudonymous transaction in a native asset. It doesn't have bitcoin's liquidity or value yet, but it does have support for higher transaction volume, faster confirmation, and better security. We've worked to make XRP integrate with ILP extremely well through native support for escrow and payment channels.

3) There's Ripple's business improving bank's payment systems. We're getting our software into the transaction flow of banks. This software supports moving the underlying value using ILP.

Given those three pieces, our strategy is to work to get some of those bank payments bridged through XRP. If we succeed, but banks become less relevant, then the endpoints will just change from bank ledgers to non-bank ledgers.

We're in the very early days. During the early days of the Internet, much of the work was done by the government. And much of what attracted people to the Internet in the beginning was its connectivity to existing media companies. The important thing is what you're building and what properties it has. Yes, in the early days, the key users will be the same as the key users of the previous technology. But if the new system is inherently accessible to all and fundamentally based on open standards, the world can change for the better.

No, that doesn't work. Eventually you wind up with a big positive number on one side and a big negative number someplace else. Then the guy with the big positive number needs to wire out money on a domestic payment system or some other rail, and he doesn't have any money in that other payment system.

That doesn't actually settle. It just tracks debt. The entity that owes the money eventually has to settle the debt with some movement of actual value.

I don't see how that would work. Say I'm the only bank in the US that uses the R3 token. I have a billion of the R3 token with a value of one billion dollars US. Now one of my customers wants to make an ACH payment. What do I do?

Or say the US payment hub has way more R3 tokens than the Japan payment hub. Now what happens when people in the US payment hub want to move their dollars out of the payment hub? Where does it get the dollars from to cover?

You can use this as a single-currency payment system and as a way to net out opposite flows. But it still leaves you with a settlement problem. The case for a crypto-currency for global settlement is very strong. Of course, what fraction of that market XRP will be able to get is an open question, and it's Ripple's (the company) major focus.

That's not possible. The various international currencies change value with respect to each other. While these changes are typically small, so are the costs and profits associated with payments.

They already have this. They just do it for every fiat currency. The problem is that it doesn't actually move value. So it requires a separation between payment and settlement. The problem we're solving is the actual movement of value.

Because only a token that can be bought and sold has actual value and therefore can serve as an actual means of settlement. Imagine, for example, a European banking hub that needs to settle with an Indian banking hub. Market makers in India might well be willing to swap Rupees for XRP if they can use those Rupees to pick up Euros for cheap or use them to fund their own extraterritorial payments.

For sure banks will do these kinds of things, but I think XRP is well-positioned to compete with them. In particular, XRP is well-positioned to bridge these jurisdiction-specific and currency-specific domestic payment schemes.

I don't understand what you're suggesting. If the token has no dollar value, what purpose does it serve? Do you mean it merely keeps track of who owes what to whom? If so, how do you settle those debts?

And when you say "peg that to fiat", do you mean to have one such token for each fiat currency? If so, how do you provide cross-currency liquidity? Or do you mean to peg one token to more than one fiat currency? How do you do that?

I think what you might be missing is that the main issue is moving actual value between islands of liquidity. How would a valueless token move value between, say, Europe and India?

The kind of system you're talking about (if I understand you correctly) is great for domestic payments and very similar to what many countries currently use. It doesn't move value though, so it doesn't help much with the problem Ripple is targeting.