Is Ripple a Bitcoin Killer or Complementer? Founder of Mt Gox will launch Ripple

[jimbobway]

So it looks like a P2P Ripple Exchange will be upon us shortly.  The founder of Mt. Gox, jed, has built a team and they are working on a global, p2p currency exchange that is minerless with "instant" confirmations.  The project will be open-source too.  How could this be a bitcoin killer?  From what I know about Ripple you can create/use any type of currency, so they could create their own cryptocoins.  They could distribute these coins by mathematically creating them and selling them in the exchange (instead of mining them.)  The benefits of this would be savings in electricity.  This is of course speculation by me, but since this project is opensource they have to make their money back somehow.  They would of course have to compete with Bitcoin, Litecoin, whatever-coin, etc...

How could this complement bitcoin?  Well, bitcoin could be used in the exchange as well as USD, Yen, or whatever currency.   You could use bitcoin to buy ripplecoins or vice versa.  Or you could use USD to buy bitcoins.

If someone here could explain how Ripple intends to have minerless instant confirmations it would be great.  Maybe Bitcoin can use this concept in the future.

From Ryan Fugger, the founder of Ripple:

I'm happy to announce that there is finally a team seriously building
a distributed Ripple network at Ripple.com.  The team is led by
founder Jed McCaleb, who also founded the MtGox Bitcoin exchange and
created eDonkey2000, and CEO Chris Larsen, founder of Prosper.com.

I've been talking to Jed, Chris and other members of their team over
the past few months, and while their plan is very ambitious, I believe
if anyone can develop the Ripple concept on a global scale, they can.
Their system is based on a Bitcoin-style blockchain, much as we have
discussed here over the last few years as an interesting possibility,
but with a novel miner-less consensus mechanism that allows
transactions to be confirmed nearly instantaneously.

After discussions with Jed's team, and some long-standing members of
the Ripple community, I've agreed that Jed's project should use the
name Ripple and be considered our primary implementation.  It was hard
for me to let others step in to this role, but from the beginning I
always intended for someone else to implement the concept, and I'm
lucky to have finally found a group that is more than worthy of taking
the project to the next level.

Please check out http://ripple.com, sign up for the beta if you're
interested, and watch for the launch coming soon...

Ryan

[Coinabul]

Is Ripple a Bitcoin Killer or Complementer?

A: Yes.

[phatsphere]

complementer

[giszmo]

@OP: Ripple's instant confirmations are easy with a "central" server. Ripple is not a competitor of Bitcoin at all but a very very precious addition. Via Ripple you can exchange all currencies, gold, work-hours, bitcoin, etc. by building a web of trust with credit lines between nodes.

If now somebody wants to buy some bitcoins, I could send them to him instantly, stating in ripple that he owes them to me. Much closer peers in the network (aka my friends) now owe me back these bitcoins and I know they will give them to me some day because they again have friends that now owe them bitcoins all the way to the person that now has my bitcoins. If my friends give me some CLP, USD and a beer, I mark the debt as settled at my end.

As my credit lines are not unlimited, we still need to settle debts outside of ripple. Bitcoins will be one way to settle debts.

This getting big would be the greatest thing that could happen to get decentralized exchanges flying!!11

Edit: Ripple has many tricky aspects to tackle and I'm eager to see how they intend to solve them. Critical mass, exchange rates, fees, …
On the other hand it exists since a long time as a concept and I'm sure many smart people discussed it. I'm confident that if they are hiring people, they know what they are doing and wish them all luck.

[marcus_of_augustus]

Well we all know devs always think they are working on something awesome (else why would they do it?) ... but so far there is only rumours, i.e. vapourware at this stage.

Until we see some code and a working app. it's hard to know if it is either killer or complement of course. The chain of credit aspect always bothered me with the Ripple concept, a systemic insolvency would not necessarily become immediately obvious until the whole system collapsed in a cascading chain of defaults (much like the present financial collapse  ) ... unless there was some kind of central or public ledger that was keeping a track of systemic solvency (like the BIS).

[HostFat]

https://github.com/rippleFoundation

[Spekulatius]

Great to see this idea being worked on!

@ Killer vs. Complementer: It really comes down to how the concept is implemented. Could be both ways, although I think its more likely that it will complement bitcoin (e.g. by making it one commodity to pledge as security for credit lines)

The chain of credit aspect always bothered me with the Ripple concept, a systemic insolvency would not necessarily become immediately obvious until the whole system collapsed in a cascading chain of defaults (much like the present financial collapse  ) ... unless there was some kind of central or public ledger that was keeping a track of systemic solvency (like the BIS).

You cant abolish fractional reserve banking with this. Neither with Bitcoin. At least I dont see a way how to.

[theymos]

It's a complement. Bitcoin is a very secure decentralized store of value, but Bitcoin transactions aren't perfect: they're fairly expensive, you need to wait for confirmations, being a full node is expensive, etc. Ripple is less safe (it's based on trusting people), but it doesn't have Bitcoin's transaction-related shortcomings. Combining the two systems might work pretty well.

jgarzik has mentioned using a Ripple-like system to exchange between fiat and BTC without using a centralized exchange. That sounds pretty cool.

[freewil]

I believe Ripple to be a type of self-issued credit, here is a good overview from Money as Debt 3 (~10 min segment).

[Bitcoin Oz]

Bitcoin solves the honest money probolem. Ripple solves the exchange problem.

Now we will be able to exchange honest money with less chance of getting ripped off. Although owing money to your friends and family isnt conducive to healthy relationships   

[JoelKatz]

Until we see some code and a working app. it's hard to know if it is either killer or complement of course. The chain of credit aspect always bothered me with the Ripple concept, a systemic insolvency would not necessarily become immediately obvious until the whole system collapsed in a cascading chain of defaults (much like the present financial collapse  ) ... unless there was some kind of central or public ledger that was keeping a track of systemic solvency (like the BIS).

Our scheme has a public ledger that is somewhat analogous to the Bitcoin blockchain.

[Spekulatius]

Bitcoin solves the honest money probolem. Ripple solves the exchange problem.

Now we will be able to exchange honest money with less chance of getting ripped off. Although owing money to your friends and family isnt conducive to healthy relationships   

What do you mean by: "honest money"??

The beauty of ripple (as I understand it) is, that you can decide with who you wanna have a financial relation (i.e. who you want to grant/receive credit (from)). If you dont want to burden your friendships, dont grant them credit. Go to a bank.

[Technomage]

Ripple is not a currency in the same sense as Bitcoin is so it's not even competing exactly in the same space. Ripple and Bitcoin can complement each other possibly in a magnificent way. It is a system based on credit and web of trust. The credit that is extended using Ripple can be ANY currency essentially. Bitcoin is a great currency so there is a lot of potential here. With Ripple it would be possible to create a superb credit market for Bitcoin.

I think Bitcoin + Ripple could be very big. If the Ripple p2p implementation works, that is.

[Steve]

Ripple is not a currency in the same sense as Bitcoin is so it's not even competing exactly in the same space. Ripple and Bitcoin can complement each other possibly in a magnificent way. It is a system based on credit and web of trust. The credit that is extended using Ripple can be ANY currency essentially. Bitcoin is a great currency so there is a lot of potential here. With Ripple it would be possible to create a superb credit market for Bitcoin.

I think Bitcoin + Ripple could be very big. If the Ripple p2p implementation works, that is.

Agreed.  I would add that ripple (and I'm speaking of the original ripplepay.com concept...I'm not entirely sure what this new thing is yet) is two things:

a) a payment network
b) a method for keeping track of debt

Bitcoin does (a) very well already, but what is needed is (b) (as well as a "ripple like" peer to peer trading network).  If the method of keeping track of debt incorporated some of the concepts from Open Transactions (the way it uses signatures to prove balances without needing to maintain history), it would be super awesome.

[HostFat]

Ripple and Open Transactions are more probably competitors

[Jutarul]

Maybe somebody can explain it to me in term of security? Assume I have build that awesome web of trust and I have an infinite amount of credit. What happens if my account gets hacked? Can the hacker leave me and my friends with an infinite amount of "debt"?

[Steve]

Ripple and Open Transactions are more probably competitors

If it's all open source, then like a fine wine you can create a wonderful blend.

[imanikin]

Since i remember the kind of POS abortion mtgox was until Jed unloaded it on Marc before the 6/11 crash, i am not a fan of jed development. (...particularly, because his view was that those with a lot of Bitcoin to trade should be protected from the market forces within dark pools of  mtgox back then...)
 
I did like his idea of a minerless p2p cryptocurrency when he first brought it up. It's great to hear that it's being morphed into a much-needed and long-awaited p2p implimentation of the promising project that Ripple is!

I think the ultimate would be Bitcoin+Ripple + OpenTransactionServer + whatever this guy meant by "perfect cryptocurrency", but 1-step at a time, i guess...

Anyhow, good luck, jed! Please put security first this time!

[maaku]

Ripple and Open Transactions are more probably competitors

Ripple is a higher-level framework to be placed on top of a more generic, lower-level framework like Open Transactions. Here's how you could implement Ripple on top of Open-Transactions:

https://github.com/FellowTraveler/Open-Transactions/issues/50

[HostFat]

Ripple and Open Transactions are more probably competitors

Ripple is a higher-level framework to be placed on top of a more generic, lower-level framework like Open Transactions. Here's how you could implement Ripple on top of Open-Transactions:

https://github.com/FellowTraveler/Open-Transactions/issues/50

Then I hope to see it early!