The IOU system in ripple is very much a dramatic change. It decentralizes IOUs in the same way that bitcoin decentralizes BTC. Do you know the total amount deposited at any given bank and the account numbers holding those bank deposits? On ripple you know, because its public knowledge in the ledger. You know the total capitalization of any particular gateway and you can see which ripple addresses hold how much of the IOUs from that gateway (eg current USD cap is $226k bitstamp IOUs and $81k snapswap IOUs). Just like everyone can see how many bitcoins are held at each bitcoin address, and add them all up to make sure they are less than 21 million. On ripple we can count the amount of XRP plus we can count the amount of exchange IOUs.

That makes ripple a threat to both the legacy banking system, and conventional bitcoin exchanges (which are just non-transparent interfaces to the legacy banking system).

Your analogy is fair as long we add that the stores are places where people can buy and sell bitcoins and everyone can see how many gift cards any particular store has in circulation.

The "bitcoin network" excluding exchanges? Then all you'd have is a blockchain of worthless digital blips (you know that localBitcoins exchangers rely on online exchanges, it is not an exclusive network).

It would be equivalent to a ripple ledger of nothing but XRP - there is no trust involved in holding XRPs. It is only if you want to hold gateway IOUs that you have to grant a trust line.



Right, users don't trust that MtGox can process USD withdrawals (aka redemption of USD IOUs). You can still initiate a withdrawal, but there's little trust that it will be processed any time soon. So it really is a trust thing, and it is not just semantics.

this is semantics. with ripple, yes, you are transferring debt. and that debt, based on the issuer, has value. given liquidity, there is indeed much value in being able to send and receive in different currencies.

I can do the exact same with XRP.  It's no different.  I don't have to deal in BTC IOU's if I choose not to.  So the "form of liberty" remains unchanged.  Using XRP as a bridge currency is what gives it the potential to be valuable.  One of the main reasons Ripple is superior to a Bitcoin payment network (Speaking of payment networks not currency verse currency) is that I can send payment in any currency I choose and the receiver can receive any currency they choose.  With the blockchain, I can only send BTC.  That's simply too limited for a world with well over 100 different currencies and that's not including all the digital currencies.  

And as we continue to see, business' are not going to adopt Bitcoin by itself.  It offers no real upside for business' or consumers. With the exception of Bitcoin as a store of value, almost all of Bitcoin's benefits are purely ideological but not actually beneficial to business' and users.   However, Ripple offers tremendous upside and gives crypto users a door to all business' that join the Ripple network.

+1 EM.  It's staggering to me that with one hand people will attack Ripple gateways and with the other defend Bitcoin exchanges, when fundamentally, they are the exact same thing.    What makes any of you think Gox is holding the actual BTC/USD/EUR that the balances reflect?  What makes you so certain they are not engaged in the same practices you "assume" every gateway will engage in?  

You bash "IOU's" but as Gox began to show it's insolvency, the term "GoxUSD IOU" started to become second nature on this forum.  You were starting to finally get it.  It is an IOU and without trust, it loses value.  Hence the reason for the huge spread between Gox and the other exchanges.  And we saw what happened when a run on Gox happened...they started requiring verification, even for BTC withdrawals.  Was that because they genuinely wanted to comply?  Maybe but more than likely, it was to buy time because they are insolvent.  Their house of cards is collapsing.

Here's a key point so pay attention:  If you give your money to a third party, ANY third party, it's not your money anymore.  PERIOD!  You gave it away to someone else.  Especially in an unregulated crypto world such as this.  Some of you are just going to have to come to terms with that truth.  The question as a user that matters, is do you TRUST this third party to give it back when you ask for it.  Nothing makes a Ripple gateway or Bitcoin exchange inherently more or less trustworthy than the other.  Just because it's a "Bitcoin" exchange, dosen't make it more trustworthy and just because it's a "Ripple" gateway doesn't make it less trustworthy and vice versa.  They both have the equal ability to operate with a fractional reserve strategy.  

I'm sure just like Bitcoin, there are plenty of reasons to knock Ripple.  This isn't one of them.  If you don't want to deal with third parties, then don't.  Keep your crypto in your wallets and "hold it for the longest time."  But please, stop with these futile attempts at trying to tie fractional banking, exclusively to Ripple.  Anytime your crypto is outside of it's wallet, the risk is there.  Matters not, which payment network you're utilizing.

That's right, different gateway IOUs will be valued differently to different people in different places. That's why the prices will vary on the ripple order books. The most trusted gateways will have the most valuable IOUs.

If funds can only be moved across the world using bitcoins, then we are the mercy of exchanges (you STILL have to trust an exchange). What if you are in a place where the exchange has funky prices? Or is taking forever to process your fund withdrawal? Ripple brings more exchanges on board, and it gives people the power to do what they like with exchange IOUs.



Because it decentralizes IOUs. With ripple, exchanges can't seize IOUs because now IOUs are crypto-coins. The same power that decentralization gives to bitcoins, ripple gives to exchange deposits.



And what happens if an exchange seizes your bitcoin deposit or fiat funds? The same scenario exists in the current world, you would have to go after them with some sternly-worded e-mails to get them to release your funds (and funds are just a deposit aka debt). The world where bitcoins are useful without debt or trust is a straw-man world. Try to trade bitcoins over the internet without trusting an exchange. Ripple just makes that trust explicit (that's a good thing).

Ripple will do great things for bitcoin - its a tool for trading them which puts bank and wire transfers to shame. It is true that bitcoin alone is theoretically capable of completely replacing bank and wire transfers. But that is a theory which is far-off in the future, the Legacy Banking system is still here and it is powerful. Ripple is here now (its not just a proposal), and it gives power to the users (again, on ripple you control your IOUs). It is not perfect, but it is a leap of a stepping-stone to a much better world.

Here, make an investigation about BTCer.

If you are instered in it, write where are you from and what's your job.