When money is presented in the form of IOU, there is always a risk of default. IOU money's value is always a percentage of the face value depends on the risk of the default. It does not have the same credibility as honest money like gold or bitcoin (no promise of future, works already paid)

Satoshi also didn't create a centralized company to issue Bitcoin's adoption.

Not accounts, balances. Nobody can freeze your account, and the freeze feature (if it was implemented) would only freeze a single balance, not an entire account.

In any event, here's a repeat of my explanation in case you missed it:

The "freeze" ability hasn't been implemented due to lack of demand. The restrict ability is implemented, but no gateways (that I know of, anyway) currently use it. These options have to be enabled for an account prior to any assets being issued by that account. So if a gateway chooses to use either of these features, everyone will know it before they choose to use that gateway. We don't want to tell other people how they have to use Ripple. We want to enable people to do what they want to do. Of course, we do want everyone to know what they're getting into and we want the rules to be hard to change after the game has started.

Right, they have to choose to use what the devs push out.

That's certainly possible. Gateways are, like all other businesses, required to follow the laws of the jurisdictions in which they operate and must respond to court orders issued by courts of competent jurisdiction. The greater includes the lesser -- in theory a government could order a gateway to stop redeeming entirely. Basically, if you operate in an jurisdiction, the controlling government can do any terrible thing to you that you might imagine.

The "freeze" ability hasn't been implemented due to lack of demand. The restrict ability is implemented, but no gateways (that I know of, anyway) currently use it. These options have to be enabled for an account prior to any assets being issued by that account. So if a gateway chooses to use either of these features, everyone will know it before they choose to use that gateway. We don't want to tell other people how they have to use Ripple. We want to enable people to do what they want to do. Of course, we do want everyone to know what they're getting into and we want the rules to be hard to change after the game has started.

Just so I dont assume anything...what is your problem with it?

Gateways must of course follow all local regulations.

Possible KYC / AML support:

Restricted issuance of IOUs
    The gateway may restrict the accounts to which it sends IOUs. For instance, it may limit sending to those account for which KYC requirements have been met.
Restricted holding of IOUs
    The gateway may restrict hold of its IOUs to pre-approved accounts. See Authorized accounts
IOU freezing
    Not implemented. The gateway may freeze an account's ability to transfer their IOUs.

But isn't the entire ripple network based on trust of other users?

Saying if "they'll keep it going" is like saying that people will never be untrustworthy. Not to mention the large stash of "premined" XRPs you folks still hold and "promise" not to dump on the market. That involves trust too.

The IOU system is a flawed system with our current monetary system already. It almost sounds like you folks are mimicking the credit rating system to determine "trust" if I had to use an analogy.

Okay so it isn't...currently...decentralized. yet I keep hearing the sales pitch that it is. I was there at Bitcoin Conference in May where your own CEO who spoke on the alt-panel claimed it to be decentralized.

Has this mis-speak not  happened?

If we shut down, the network will continue so long as people are interested in continuing it. If it solves real problems for real people, they'll keep it going. If not, what difference does it make? Avoiding regulation is not one of our goals. In fact, we're working very hard to figure out how everyone from individuals to financial institutions can use crypto-currencies while complying with existing regulations and working to prevent new regulations that stifle innovation.

So Ripple isn't decentralized then?

I seem to keep hearing that it is from the people you work for and with. It almost seems like this topic is a moving target.

You guys really need to make some real clarity on the topic as well as others.

Currently I look at it as centralized given there is a company behind the ripple network. That company can be shut down or regulated as the powers that be see fit.

The client does need to communicate with one or more servers (as do servers, of course). Currently, only servers have a set of chosen validators.

It's still early in Ripple's evolution. You can build software that uses the protocol and connects to the network that has any combination of features and capabilities that you want. We're not quite sure how people are going to wind up using it. One possibility is that people will run "thin servers" and connect a browser-based client to their own server. Another possibility is that people will run "heavy clients" that have a list of validators and act more like servers do (though probably only as observers to the consensus process). Another possibility is that Ripple will be invisible and people will use it indirectly through things like federation. We've designed the protocol and the data structures to be flexible enough to support fairly light implementations that can still implement their own UNLs. The reference client isn't there yet. There's still a lot of work to do. It's still early.

Anyone else can set up a client and server now. The problem is that a trojaned client could steal your secret. A standalone client (or browser plug in) would be great to have. Anyone who wants to can implement one, of course. I know we have one in our plans, but I'm not sure what the timeline is. Again, this is another place where we agree. These are risks, and we'd prefer people did not have to take these risks so we're working to reduce or eliminate them.

Yes. It would be a little hard right now because the infrastructure to make it easy to do that isn't complete yet. Effectively, the community would probably just have to agree on someone to replace us. Until someone else could execute a full decentralization plan.

But we're hard at work on the transition to greater decentralization. We have no wish to control or operate the Ripple network. We have no desire to own the network or the protocol. The reason it's important that we get this right is that we want it to be as impossible for some other entity to become a central authority controlling the network. When we fully let go, we need to make sure nobody else can grab on.

Not really. You're just trusting validators not to collude against you. When you extend a trust line, you are trusting someone to hold money for you or owe you money.

The business model requires XRP to appreciate. Nobody would disagree that what we're trying to do is high risk. Success is definitely not guaranteed.

XRP is unique though. It's the only currency that can flow between any two parties with no trust path needed. It's the only currency in Ripple that has no counter-party. While other currencies can have transfer fees imposed on them by their issuers, XRP never has any transfer fee other than the transaction fee. We expect that people will make assets liquid on Ripple by making them liquid to and from XRP, and we expect that people who don't know what asset they'll need will tend to hold XRP.

As a practical matter no.  Every client by default comes set to trust Ripple, Inc.  A significant portion of the network will never change that.   It is like saying if miners got everyone to agree could they change the block subsidy to 50,000 BTC.  Sure but it is never going to happen.