Yes, very important points, had to be said, glad someone did, saved the rest of us a whole bunch of keystrokes!

Heaven and Hell are both places you can live in, interchangeably, right where you are right now, psychologically. You can go back and forth.

That won't change your real situation, you are unlkely to shift between quantum realities with different timelines or whatever the just will it and it will happen crowd are saying in their be a millionaire just by believing you are ebooks (only $99.99, pay now with irreversible new ecurrency!) but the freedom you do have just inside your own mind and feelings about your situation is awesomely massive.

But can therefore allow one to be "manic", wonderfully happy, even in some gosh-awful situations.

Which can be really good for survival once you are in such situations (you can still live a happy life even after you abandon your facebook account with no way to undo what you already did by giving them information).

But can lead you into some gosh-awful situations if used up front, that is, feeling all manic / happy about a situation YOU ARE NOT YET IN!

Live happily with how much information you've already spewed out onto the internet, but

BE CAREFUL WHAT MORE YOU PUT OUT THERE!!!

-MarkM-

MtGox provides the really hard part, the navigation of the legally fraught with regulations interface between government fiat currencies and the real value that people really use on the real internet.

MtGox is basically a natural inhabitant for the "fiat gateway" niche in the Ripple ecosystem, that apparently has not yet officially taken up residence. I suppose not every financial services company in the world is going to immediately open up a branch in Ripple Country, but as Ripple Country expands more and more might find it a rich enough community to make opening up a branch there make sense to them.

Ripple has price discovery itself though, with arbitrage, so eventually it will be Ripple providing price discovery and the "exchanges" we are used to will get to focus more on what they do best, which is getting our virtual wealth out to meatspace for us and our meatspace wealth back into the virtual world for us.

-MarkM-

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-

Have you encountered the term "merged mining" yet?

If you are not familiar with it, take a look, as you seem to be trying to reach out and find it...

-MarkM-

Re gateway default...

Remember last time bitcoin was up near $32 ?

I doubt it was concerns about its baked in block size limit that caused the massive loss of confidence that ended up taking until very soon now, any day now, to get back that level of confidence.

I suspect a lot of it was the huge defaults, whether premeditated or due to sheer incompetence or due simply to being out there on the internetz for the whole internetz of haxors to PWN.

So yeah, I think we have seen that major defaults can cost quite a bit of public confidence resulting in even years, not mere months of work to regain that confidence.

-MarkM-

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-

Part of why I wanted to get a checkpoint into the code is low difficulty chains are more vulnerable to 51%+ attack than higher difficulty chains and I like to use only very well secured coins in the cold storage vaults (cold wallets) in which rest, hopefully pretty much "forever", the coins that back  tokens that I issue on my Open Transactions server.

With Ripple now in Open Beta I hope to bring this same approach to cold storage to the Ripple side, that is, limit my issuing of *coin IOUs on the Ripple network to the same "100% reserve, 100% of which is very very cold" tradition. Using a separate 100%, of course, not re-using the same reserve coins on both networks!

I expect that I do have some BBQcoins from several harded checkpoints ago though, so failure to have gotten another hardcoded checkpoint into place recently should not prevent me from being able to find some number of very very cold old coins to back tokens and some number of very very cold coins to back IOUs. Thus I am starting to think about adding BBQcoin to the panoply of coins my server supports...

-MarkM-

Bear in mind that the trust lines are there to be used, even while you are not online and so on.

Possibly with the various lines of trust you lot have set up among yourselves RIpple has found routes you did not think of or know of. If none of you has complete information about all the lines the others have set up, but Ripple does, maybe none of you individually even has enough information about the combined trust network you collectively have built so Ripple is able to surprise you. Indeed presumably it is hoped and intended that pleasant surprises become more common as trust networks become richer and more connected.

So there probably should come a time when Ripple starts getting what we want done done in surprising ways whose details might involve obscure links between people none of whose direct trust line partners we even know or even know of.

(Until we fire up fancy trust web browsing widgets and so on and go exploring what is actually out there, that is, of course.)

-MarkM-

(Re the post above...)

Very well written, thank you.

Not sure folk are going to be able  to come up with much to refute it, either.

Maybe we should hope you aren't right simply because other people being right is one of the most annoying things in the whole wide world thus could lead to flame wars or something.

-MarkM-

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-

On my copy of the client, wihch is on my own machine, I'd basically restart it: visit its homepage and see if it still thought I was logged in or offered me a chance to log in (implying I was not logged in). If it still thought I was logged in, yet still didn't seem to have remembered all my whatever (such as maybe yours is not remembering you actually having got what you are trying to send out or something like that) I'd explicitly log the heck out and log back in and see if that would help.

Does the person you are trying to send the IOUs to trust that gateway's bitcoin IOUs? Is their trust line already full with no trust left to accept more?

-MarkM-

If you are a member of a gateway, exploring its options might pay off in interesting discoveries, and if not, it might at least help get an idea of what options it offers. For example I can easily imagine that some gateways might use different terminology for "depositing" stuff than they use for "redeeming" their own IOUs. Who knows? I'd be interested whether gateways exhibit such quirks. Or any quirks, actually.

-MarkM-

Ripple is currently in Open Beta, which is geekspeak for might not always work quite exactly as intended.

Tonight when I logged into my copy of the client*, located on my hard drive, using a file: URL ( e.g. file:///usr/src/ripple/rippleclient-git/index.html ), imagine my shock to find all my XRP and BTC were not belong to me!

I fired the thing up again, and voila, all my mine are belong to me again!


* Built by me, by following the instructions git pulled to me along with the client source code.

-MarkM-

Oh cool, you have trusted bitstamp's bitcoin IOUs, I have trusted WeEx's bitcoin IOUs. I wonder if they trust each other?

On the one hand I would by default expect not, simply because gateways are not commonly regarded as being in the business of trusting people, so why would they trust another company, especially a company that could even be imagined to be in some way "a competitor"? Companies are made up of people, and trusting people is not what the business is typically assumed to be about.

Sticking to a "we are here to be trusted, not to trust" model a gateway would, instead, let its users handle all the "trusting someone other than yourself" stuff.

You'd want to have users who trust other gateways, and, furthermore, who are willing to exchange your IOUs for the IOUs of other gateways.

Exploitative much? Darn right! The Rules of Aquisition tell us that "exploitation begins at home", but it sure does not end there! Business is all about exploitation!

As a gateway, operating a nice clean pure "trust no other" model, the only IOUs you'd accept would be your own. Anyone else's your users can accept if they choose, and the more of them that do the better for you maybe, as their trust networks are opened to you by the fact that they have chosen to trust you (and only to the actual extent/value that they have chosen to trust you).

This early in the open beta of Ripple however, I suspect it might happen to be the case that these two "only known offically recognised as gateways gateways" might have been talked into trusting each other, if only a little, if only until they can get users trusting them who can take on some of the opportunities presented by the possibility that someone somewhere sometime might want to trade one gateway's IOUs for the other gateway's IOUs.

I hope the word "opportunities" caused some users' and potential-users' ears to perk up, because it is a very nice marketing-word with a long history of being useful in talking users into taking part in doing things on the internet (and even off the internet, to tell the truth)...

-MarkM-

Today, with Ripple, you can receive Rpples (international currency symbol: XRP) if someone chooses to send you some and knows your Ripple account number.

Today, with Ripple, if you have enough Ripples (XRP) in your Ripple account to meet the "reserve requirements" imposed by the various options / services your Ripple account is using plus some XRP left over after meeting those "reserve requirements", you can, if you know someone's Ripple account number, send them some Ripples.

Having an account at all requires 200 XRP of "reserve", so if you have only 200 or less XRP in your Ripple account sorry, sending Ripples is not for you until you bring your Ripple account's XRP balance up over 200.

If you have set up a line of trust, each line of trust requires 50 XRP of reserve too, so if you have done that and have only 250 or less XRP in your account sending Ripples is, again, not for you until you bring your account's XRP balance up over 250 (or however much the account's reserve requirement adds up to given the number of lines of trust, market offers, and so on, you have set up).

Today, with Ripple, what you can do is limited, as an anti spam, anti overuse/abuse measure, by your supply/balance of Ripples.

-MarkM-

So, on with aspects of being a [service provider of some kind] on the Ripple network:

Things one can start getting into place while waiting for rippled source code:

Cold wallet(s)!

A core component of my Open Transactions server enterprise that my Ripple-side enterprise will also be needing.

I like to run token-issuing, which Ripple, on the Ripple side, calls IOU-issuing, as a 100% reserve operation.

Thus before I issue any tokens aka IOUs, I like to secure, securely, actual real on the blockchain coins before getting into the issuing of any tokens representing such coins.

My mention of a cold storage operator type of enterprise earlier was because I like to differentiate hot wallet services from cold wallet services.

For one thing, that lets me build enterprises modularly. Nothing need go in hot or out hot from cold storage. Cold storage is very cold.

Ideally, what goes into cold storage stays there for as long as the type (denomination) of tokens (aka IOUs) that are to represent it seem likely to be of use. They should not need to come back out of cold storage until no further/future need for such tokens is expected/anticipated.

Hot wallet(s):

A hot wallet operation is the part of the enterprise that sends and receives coins on the blockchain side and which will, once rippled is running and the other steps that await a running rippled are done, possibly be exposed to the world via a web app. Ouch, yes, a web app. Danger, Will Robinson, Danger!

Since coins in the hot wallet operation will thus be exposed to the entire internet of hackers, obviously it would be irresponsible of me to put there, thus put at risk, any part of the cold-stored (ice cold, frozen, maybe buried in a Fortress of Solitude in the arctic or antarctic) 100% backing that backs issued tokens-aka-IOUs.

The coins in the "hot wallet" operation could vanish at any moment, thanks to the ingenuity of the entire internet of hackers.

No way do I want to be in the position of having issued an Open Trsnsactions token (on the Open Transactions side), nor a Ripple IOU (on the Ripple side) representing (backed by) any of those coins...

-MarkM-

Oh good sleuthing, I hadn't ferreted out that URL, all I knew of was the "coming soon" placeholder public repo.

-MarkM-

That is probably more a political than a technical question: "Will others let you use their rippled to run your gateway?"

(How heavy usage, consuming how much of their power, and all that stuff.)

You pretty much ought to run your own, and there are commands you will want to send that include your account's secret so if you use someone else's you get into it being wise to sign the commands on your side instead of letting the server know your secret so it can sign your commands on your behalf.

Me I plan to wait until I have a rippled right here behind my steel plated door with me, so I can go ahead and not try to code or find some way of signing the commands before sending them to a rippled. But thats just me. I'm a bitcoiner. Bitcoiners don't hand out private keys (aka secrets) to third parties. Right?

-MarkM-

So, onward toward being a gateway.

I myself have created a test account in Ripple, and it is, like all accounts people are creating by using the create account button currently, basically what we might as well think of as a personal account.

Specifically, it is an account that has not been set to require "destination codes".

The lack of "destination codes" means whatever people send to it just lands in the account, with no code that an app could be watching for to tell the app that the incoming transfer is intended for so-and-so care of me, rather than just plain being to/for me.

Thus this account is not the one I will be using in my capacity as some kind of gateway / exchange / cold-wallet-operation enterprise.

I actually seem to recall having read that to activate the "requires destination codes" mode on an account you should (or maybe need to / have to) do that before starting to use the account for anything. So it is possibly even too late now to ever turn on that mode for this account.

I am not publishing here the account number of that account yet because so far it is a test account, and I want anyone who ends up making use of it to be clear about that. It is specifically not the account of my intended/eventual gateway or exchange or cold-wallet-operator enterprise.

-MarkM-

Who extends credit to whom is something banks have managed to confuse us all about for centuries.

When you deposit currency in a bank, they, being in the position of power, like to speak of the situation as if they don't owe you anything, they merely hold some funds on deposit for you.

When a gateway sends you some of their IOUs in Ripple though, that is how, in Ripple, by convention, them owing you funds is customarily represented.

Typically they don't want you to owe them anything, because, frankly, they don't want to or need to trust you so don't really have any incentive or reason to trust you, so typically they don't bother to trust you.

Thus they like to be the issuer of the IOU that represents an imbalance, a deviation from the blank initial state of neither of you owing the other anything.

With banks, the accounting entry that they like to refer to as "the balance of your account" corresponds to what Ripple is representing by putting into your account an amount of the other party (the bank/gateway)'s IOUs. It is how much they owe you. I suppose it is somewhat understandable why they like to use their nice little euphemism "the balance of your account" instead, else who knows, some peasant some day might wonder how much the bank actually owes...

The depositors have, in effect, extended credit to the bank.

-MarkM-