Interested, but a Friday evening would be more convenient for me because I don't live in Amsterdam.

Governments are elected by the people, and government spending buys votes. A lot of people profit from the system, including many of the little guys. In essence, at least part of it is organised, legalised theft on a large scale. It's not just the government and the banks, large sections of the population are complicit. As Erik Voorhees puts it so nicely: democracy is the original 51% attack.

Will Bitcoin put an end to this? Almost certainly not. What it could do, is to make it more difficult for governments to collect income tax and especially to print money. They'll be able to make up for some of that through other taxes, but not all of it. So I think Bitcoin will help a bit, but only time will tell how much.

Trust really means trust. As long as you don't grant trust to someone you don't really trust with that amount of money, you'll be fine. The trust system is what allows you to be independent of the banking system if necessary, though it doesn't insulate you against inflation caused by central banks.

Note that the example didn't contain a gateway. In a sense a gateway is just a user that is trusted by many people, which results in short paths between many individuals. The more gateways, the more robust the system. But even if there aren't any gateways, you can still ripple from person to person. You are only exposed to credit risk caused by the people you've directly granted trust. If someone on the chain defaults, then the payment should still reach you, though the person after the person that defaulted would probably revoke his trust, so that the same thing couldn't happen again.


Yes, trust means trust. If you don't trust a person not to do this, don't grant them trust or you may be the victim of something like TradeFortress's little stunt. And don't just trust a gateway either: they're likely to be less reliable at keeping your money than banks, which aren't terribly reliable to begin with nowadays.

Extending your point: this is an important feature, not a bug. Without this feature, anyone could be saddled with TF's worthless IOUs rather than say Bitstamp IOUs or IOUs "issued" by friends and relatives.

Bump.

I know the proposal has been withdrawn, but I wondered if people thought OP_EVAL should be implemented some day, perhaps far in the future.

I see no reason why BTC would be superior as a currency in the long run. In the short run, I'm holding a small amount of BTC and a tiny amount of XRP.


Ripple the fiat payment system would probably have no use anymore, but you could use it for exchanging between multiple cryptocurrencies as well as for community credit in one or more cryptocurrencies, if that ever takes off. XRP the currency could well remain provided it manages to establish itself as a currency first. But easing the transition and protecting crypto from a statist crackdown are the two main things I'm hoping for.

Well, actually it is both a payment system and a currency. XRP can be traded much like BTC, with zero counterparty risk. The great advantage over Bitcoin is that XRP is fully integrated with the Ripple fiat payment system and can therefore interface with the fiat world far more easily. Once crypto is established, that won't matter anymore, because then fiat currencies may go the way of the dodo, but it will be very useful, perhaps even necessary, to get there. Personally, I'm worried that Bitcoin may be doomed without Ripple or something like it. Of course, something like Ripple could also be built on top of BTC rather than XRP. That would be a good thing, because competition keeps everybody honest.

This is not a problem if the amounts you grant in trust aren't excessive (that is you can afford to lose them) and if you only grant trust to people you trust in the real world. Gateways are just special users that are trusted by many people, like banks. Well, not many people here might trust banks and I would argue they should trust gateways even less.

Within Ripple, whenever you trade anything besides XRP, you have counterpart risk and vice versa. This is because Ripple can only do bookkeeping, and the "official ledgers" for fiat currencies are not stored in the Ripple system. This would be an argument for using XRP. On the other hand, you don't have exchange rate risk if you are trading in fiat.

For fiat payments, Ripple is "just" a distributed system for keeping track of who owes what to whom.

For example, if A trusts B for $10 and B trusts C for $10, then C could pay A through B. C's balance with B would be decreased by $10, meaning that C now owes B $10 more than before, or B owes C $10 less than before. Simultaneously B's balance with A would also be decreased by $10.

Assuming all balances started at zero, A would now be owed $10 by B instead of by C, which is an improvement because he didn't trust C, but does trust B. Similarly, C now owes $10 to B, which is also an improvement, because C can now expect shipment of whatever goods he was promised because A does trust B. B's total balance hasn't changed, because previously he had two zero balances, whereas now he has one for +$10 with C and one for -$10 with A. For B this is not immediately an advantage, because he doesn't gain from the transaction but does have to do work for it. However, in practice you would expect B to be on either end of some transactions too, and then someone would return him the favour.

All three parties will want to settle the open amounts to take care of the credit risk. They could do so immediately, or they could wait a while until more transactions have passed through the network and have partially canceled out. This would mean less work.

I think it is going to be a long time before Ripple will be used for real loans, if at all. I think the interesting use case is small reciprocal lines of trade credit with trusted associates in order to facilitate cash payments over a P2P network. This would provide us with liquid, (almost?) irrepressable distributed exchanges between fiat and crypto, which would only require small, secret and periodic cash settlements between trusted associates.

Makes sense, if you think about it. Anyway, bottom line: revoke those trust lines NOW.

Sorry about the double posts people, I was trying to edit and must have pressed the wrong button. I can't edit or delete the messages now.

Correct, but there's a much bigger danger, as you describe below:


This automatic rippling is the real danger. Any time TF makes a BTC payment in Ripple, the Ripple system can take any BTC IOUs issues by presumably honest and reliable gateways like Bitstamp, pay them to the recipient and give you worthless TF issued BTC IOUs in return. By granting him trust you are promising to make payments on his behalf and to trust he will pay you back. You will then be on the hook for some of his debt. In return he has to pay you back, so theoretically it evens out, but that is cold comfort if he defaults on his obligations.

Trust means real world trust, not cyberspace pretend trust. Everyone needs to revoke any trust lines they have with TF immediately or be at risk of losing lots of BTC and owing them to others.

Bear in mind that Bitstamp also needs to earn its trust. I wouldn't be comfortable with trusting them with anything else than small amounts for short periods of time. For me that's something like $100 for a couple of hours max.
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Correct, but there's a much bigger danger, as you describe below:


This automatic rippling is the real danger. Any time TF makes a BTC payment in Ripple, the Ripple system can take any BTC IOUs issues by presumably honest and reliable gateways like Bitstamp, pay them to the recipient and give you worthless TF issued BTC IOUs in return. By granting him trust you are promising to make payments on his behalf and to trust he will pay you back. You will then be on the hook for some of his debt. In return he has to pay you back, so theoretically it evens out, but that is cold comfort if he defaults on his obligations.

Trust means real world trust, not cyberspace pretend trust.

Bear in mind that Bitstamp also needs to earn its trust. I wouldn't be comfortable with trusting them with anything else than small amounts for short periods of time. For me that's something like $100 for a couple of hours max.

Yes, remove the trust line before you make any further Ripple payments. And be aware that Ripple may make you automatically make payments on behalf of anyone you trust, so remove it regardless. The next time TF or anyone else you trust makes a payment, it could be taken out of your account. If someone else trusts you, you could end up owing that person bitcoins. The sum of the amount you owed others and others owed you might cancel out, but that is cold comfort if TF won't pay up. It certainly doesn't excuse you from paying up yourself, even though you are the person who was scammed.

I think it is both this and, more importantly, the fact that Ripple doesn't need miners. I think that is where the real resistance comes from. The first concern can be removed by simply releasing the code, which I'm confident they'll do. But the second objection is permanent. Personally I don't think it's an argument against Ripple, but in favour of it, provided it is sufficiently safe, which we don't know yet.

The recipient has to grant you a specified amount of trust, which in essence means he is extending you credit in the specified amount. The balance between the two of you starts out at zero. When one person makes a fiat payment in Ripple and the balance of the trust line is sufficient to allow it, Ripple will make the payment by adjusting the balance. If it is insufficient, it will try to adjust balances they have with third parties they both trust, such as gateways. If that is insufficient, it will try to involve even more people according to the trust graph. If the sender's wallet balance plus any unused trust lines is insufficient to cover the payment, it won't be made. If it is sufficient, it might still not be made if there are too few paths between sender and recipient and all relevant trust lines are maxed out.

Your total wallet balance is the sum of everything people owe you minus the sum of what you owe other people. Ripple does do the netting for you, but you do still have to periodically settle with people you have a trust relation with. Clearly, these trust lines in Ripple should correspond to real trust between real people in the real world. You should never grant more trust than you are comfortable losing.

It's not an exploit. It's a feature, not a bug. The mistake is to trust someone you don't know and to choose an excessive amount for that trust line. When you trust someone in Ripple, it's not like friending them on Facebook. It's not a game, it means real trust, not pretend trust. It means you are willing to make payments on their behalf and trusting you will be repaid in an unspecified but reasonable amount of time. You are extending the person unsecured credit. I think 1BTC is high already, and 100BTC is insane.