Yeah, I was not aware of it when you first posted. Since then, it's been happening to everyone, including me.

I hope so. I think it's worth working on ways to reduce the probability and severity of this attack. So, in an academic sense, it's well worth worrying about. But it would be really odd to argue that people should avoid Bitcoin because of the very small risk of this kind of attack.

In addition, though the known solutions (at least known to me) to a 51% attack (from a motivated attacker with significant resources) are pretty awful, it's not necessarily the total death of Bitcoin. So while it would be a severe blow (as the block chain split was, as the recent price crash was), I would expect Bitcoin would survive somehow. Bitcoin's death has been predicted so many times and Bitcoin has weathered crises.

They could, but would they? If they feared the 51% would continue, they'd have no assurance of any return on their investment. If the price falls, some existing miners might be discouraged and stop mining, possibly faster than new mining could be added, especially when it wasn't profitable in the short term.

That assumes that their profit comes from Bitcoin rather than a competitor (which could even be conventional fiat currency). Consider, for example, a future time when Bitcoin prices are high but the block reward is low enough that mining isn't all that profitable. If someone shorts Bitcoins (perhaps even by investing in a competitor, which could even be something like Western Union, PayPal, or Visa), they might actually find it profitable to launch a 51% attack.

One thing that helps Bitcoin resist this kind of attack is that it can't be mined efficiently with general purpose hardware. This means that miners probably won't stop mining at the drop of a hat because they can't sell their mining hardware to someone who is going to do something else with it anyway or use it for something else -- they will have to try to keep Bitcoin healthy event if that means short term losses otherwise their expensive mining hardware is just scrap metal. And it also means that an attacker has to invest in hardware that they can *only* use to mine Bitcoins. They can't rent general purpose hardware to attack the network at a low cost. Coins that use ASIC-unfriendly mining schemes are much more vulnerable to this kind of attack than Bitcoin is.

Here's one example:

1 ) You create a wallet.

2 ) You write down your secret.

3 ) You use the wallet. You create more than one account.

4 ) You delete one of the accounts you created.

5 ) Later, you lose your wallet. Good thing you wrote down the secret.

6 ) You create a new wallet with the same secret. Yay, all your funds are safe.

7 ) You create a new account, but since the account algorithm is deterministic, it's the same one you deleted in step 4.

8 ) You fund that account.

9 ) Someone resubmits some of your old transactions which are now valid again and your account is drained.

One possible solution would be to have some kind of efficient "dead accounts" structure in the ledger that would track deleted accounts so that they could never be re-created.

The reserve lowered to 50, so you can send all but 50 XRP. Unfortunately, allowing an account to be completely deleted would break (though only slightly) our wallet security model.

We have no mechanism to stop people from creating accounts. An account is created automatically when it receives XRP. Theoretically, we could disable creating a new wallet in the client, but we've already publicly released a version of the client that allows wallet creation so that wouldn't do anything. I suppose we could ask Payward to stop allowing new wallets to be created, but storing a wallet at Payward is not necessary to use Ripple. You can store your wallet locally or, if you're a coder, use the account directly through the Javascript library without a wallet or using any language that can exchange JSON objects over a Websocket connection. The "blob vault" source is also public, so anyone could create their own wallet provider.

https://ripple.com/client/
Push "Create a wallet"

While the network is centralized, we could add mechanisms to prevent accounts from being created, delete accounts, freeze or adjust balances, remove trust lines, and so on. But we have never had any need for any of these mechanisms and so they currently do not exist. And, more importantly, we would prefer not having to having them. (And, as other people mentioned, once the server source code is released, any such mechanisms would just destroy our credibility and be removed by the community anyway.)

Were we to delete an account, change a balance, remove a trust line, or anything like that, there would be one ledger before this change and one after, both signed by us. Each ledger contains the transactions that justify the changes between the previous ledger and that ledger, signed by the account holder, along with precise descriptions of what ledger changes each transaction made. Every account state change is justified by a transaction on the other side of the ledger. If we were to tamper with any ledger entries, we wouldn't have a signed transaction from the account holder justifying that change, and this could be provably shown to everyone. (Though this wouldn't stop us from freezing an account by just not processing its transactions, though if we did that, presumably the account owner would complain loudly.)

They can and they certainly will. Just like Bitcoin spawned a dozen alt coins.

We will have the first mover advantage, just like Bitcoin has over all the alt coins.

You're not irrational. You just think we have a fear of competition. If we are not better than our competitors, we deserve to lose. We will be, just as Bitcoin is better than its competitors.

I agree with you that this might be a concern in the future. I have no idea how to solve it though. If it ever appears actually likely to occur, we'll be in a better position to figure out the right solution because we'll know the actual circumstance we're in. Perhaps people might agree to inflating the currency supply.

You're definitely right that this is conceivable. I'm not so sure it's likely though. If anything like this ever happened, it would be way off in the future. We we designed Ripple, our primary goal was to make a system that was as useful as possible so that it had the best possible chance of widespread adoption. Thinking through a solution to some possible distant future Bitcoin/Ripple endgame was not part of the equation. And I don't think any of us can imagine what such a scenario will look like such that we could design for it now.

If you believe Ripple will inevitably destroy Bitcoin because it's so much better, then I would argue that it should do so and it's irrational to oppose it because Bitcoin somehow "deserves to win" despite being inferior.

I don't think anyone can predict what some Bitcoin/Ripple future endgame would look like or even if there will ever be one. If you genuinely think this is likely, sell all your BTC today and buy XRP. (I bet you didn't. Why? Because you don't think it's likely. I don't either.)

I don't think that really makes sense. Bitcoin is what it is. There's really no way Bitcoin could copy us without being something other than Bitcoin and people would still want the old Bitcoin.

Like Satoshi did for Bitcoin, right? No, wait, he didn't. You think he would have been richer if he had? Was Satoshi a fool?

Trying to adjust your behavior to overcome irrational objections from people who don't even care about the issues they're objecting to and who will just make new equally invalid objections when you overcome the ones they did made is a fool's errand. Ripple has a significant chance of complete failure and being able to give away XRP to drive adoption is strategically critical. And that's only one of a long list of reasons.

If you don't believe us, even when we say we're going to do what's in our own best interest, then so be it. Wait and see.

I know a lot of people in this forum want lots of currency speculators to drive up the price of BTC. But that's, IMO, foolish short term thinking. That's what causes crashes. And crashes cause risk. And risk drives away adoption of a currency as a means of exchange.

Long term, the real win is getting your currency used as a means of exchange. Price instability works against that. Such a scheme, if it moved at any kind of volume, would reduce the supply of one currency and increase the other, making both prices less stable and making both currencies less suitable as a means of exchange. It would only make sense if both currencies functioned as a unit already, like when a currency is reissued, because everyone already understands that all existing old currency adds to the supply of new currency because people will exchange it.

Why advantage would that have over just trading BTC for XRP? If it ever cranked into high gear, it would reduce the supply of BTC and increase the supply of XRP, making both currencies less useful and means of exchange.

We have no desire to retain control, that's the whole point of decentralizing. It is vital that we not have control over the network for all kinds of reasons. That's why we designed the system not to require central authorities.

We don't. We've even suggested some things we do that could be particularly helpful to Bitcoin. We don't see ourselves competing with Bitcoin any time in the near future, if ever.

Do you think if Satoshi had kept control over Bitcoin or tried to stop alt coins from forming his Bitcoins would be worth more today? We learned this lesson.

We're working on seamless inbound and outbound Bitcoin gateways (so you can just right to a Bitcoin address from the client and send to a Bitcoin address and it will appear in your Ripple wallet). It works just fine right now, you just have to return the IOUs to their issuer and redeem them. Bitstamp has made this totally painless (other than their hot wallet running dry a lot).

Yes. But they'll do less and so they can charge less. No one entity will have the exclusive pathway to the distributed exchange, so competition should not only bring rates down but also keep policies sane. Don't like one gateway's policy? Exchange their IOUs for IOUs at another gateway to redeem.

Maybe, maybe not, but that's the beauty, they don't have to. What the merchant accepts and what you pay them with don't have to be related at all. Ripple is a financial matching engine. So long as you have something liquid and they accept something liquid, a cheap path should be possible.

Nothing would happen if we flipped it off. We'd just be in the minority and ignored. Once you let the cat out of the bag, you can't stuff it back in. It's just like when Satoshi decentralized Bitcoin by making it all public. He couldn't change his mind at that point. If he realized that 21 million was the wrong number of Bitcoins, he was stuck with it.

The whole point of decentralizing something is that no one entity can impose its will on it. When you give up the power to do evil, you give up the power to do good as well.

This is an incredibly unlikely scenario. It is almost impossible to imagine Ripple's success as being anything but good for Bitcoin.

For the foreseeable future, Bitcoin will be one of the core currencies traded and moved on the Ripple network. Ripple will give Bitcoins faster transactions that don't clutter the blockchain. Ripple will make fiat currencies hard enough that they can be reliably traded for Bitcoins and Ripple will provide a distributed exchange that will make it easier for people to buy and sell Bitcoins. And every merchant that takes Ripple will be one more place you can spend your Bitcoins.

It will be a long time, if ever, before Bitcoin and Ripple compete with each other in any meaningful sense.

In any event, XRP will only compete with Bitcoin as a currency if it is as good as or superior to Bitcoin as a currency. Do you really want to argue that if that happens, nevertheless it's still somehow bad for Ripple to do that?

By the way, is your nickname supposed to be "bitch-ess" or "bit-chess"? It makes a difference.

By intentional design, it is very difficult to change the rules by which transactions are executed. Obviously, you want people to be able to rely on the system behaving the same tomorrow as it has today. As soon as the network is decentralized, any new feature or fix that changes transaction processing would require an overwhelming majority to support it. Various people will have to upgrade their servers, the community will have to agree not to veto the feature. Unless there's a consensus that it's an emergency, the servers will wait until they see a stable majority for a period of time to prevent a change from being rushed through. Right now, that would slow development down significantly. But we're getting very close to being ready to flip that switch.

https://ripple.com/wiki/Change_Process

Absolutely. The running network is not decentralized today. But the design is and doesn't require any central authorities.

That's simply not true. You couldn't have a decentalized exchange by decentralizing Mt Gox, for example. It's not *designed* to be decentralized. It's design requires a central authority.

Of course not. But because we designed it so no authorities are required, it will be decentralized once that switch is flipped. Then there's no going back.

It's design is decentralized. It doesn't require any central authorities of any kind. The currently operating network is centralized, but it will be a decentralized exchange system.

Ripple has direct exchanges between arbitrary currency pairs.

Don't store your wealth in Ripples then. Use Ripple as a payment network and currency exchange and store your wealth in whatever currency has the properties you like. I completely agree that there's huge risk associated with using XRP as a currency now. (There's huge risk with Bitcoin too, but that's another story.)

Today, but that was not always true. There was a time when the vast majority of mined Bitcoins were own by those who had been given early access. This may be true of XRP some day or it may not. If you think that's a necessary property for a currency, then don't use XRP as a currency. We're not asking you to. We're promoting Ripple as a payment network.

Satoshi could have kept Bitcoin closed. He could have sold mining contracts. He could have kept the code secret. But he didn't. And because he didn't, his Bitcoins are worth more today than they ever would have been under a closed model. We may be selfish, but we're definitely not stupid.

I'm glad you recognize that opening the network is in our self-interest. Now the question is whether we're smart enough to do it.