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

[Blinken]

I haven't checked out Ripple, but one thing I know is that mining was a bad idea. Also, capping currency growth was another bad idea. Whatever the Bitcoin replacement is will have a built in mechanism for increasing the currency volume in proportion to usage. Bitcoin will be like the Mosaic browser and the bitcoin killer will be Netscape.

[Walter Rothbard]

Also, capping currency growth was another bad idea. Whatever the Bitcoin replacement is will have a built in mechanism for increasing the currency volume in proportion to usage.

I won't use it, then.

[Gabi]

is that mining was a bad idea

It is the only way to have a decentralized system that no one can control

Whatever the Bitcoin replacement is will have a built in mechanism for increasing the currency volume in proportion to usage.

I won't use it too. Bitcoin is digital gold, and you can't "increase" gold at will!

[justusranvier]

I haven't checked out Ripple, but one thing I know is that mining was a bad idea. Also, capping currency growth was another bad idea. Whatever the Bitcoin replacement is will have a built in mechanism for increasing the currency volume in proportion to usage. Bitcoin will be like the Mosaic browser and the bitcoin killer will be Netscape.

You're in the wrong part of the forum:

https://bitcointalk.org/index.php?board=67.0

[herzmeister]

Money is merely information. That's all it is. Who owes what to whom. Information should not be scarce.

I mow your lawn, you wash my car. That's it. No need for any of us to go to a gold mine.

Ripple is ideal money in this regard. It's merely information.

It's the control of this information that has always been the problem. Money has always been a trust issue.

The reason why some folks love gold, silver and other commodities is because those store and transport this information without the need for an authority like a state.

Bitcoin tries to solve the trust problem by emulating such commodities. The disadvantage of commodity currencies is that they're scarce and become target of speculation. Loans become unnecessarily expensive, perpetuating inequality.

Ripple's approach is to decentralize trust into a peer-to-peer social network. Loans are cheap, propably largely free, because it is credit-based money after all. Its disadvantage is that it's reputation-based and can't offer the privacy that Bitcoin does.

So the perfect money doesn't exist. Every form has advantages and disadvantages. If people learn these differences and how to apply them property, we may have a rich ecosystem of different moneys in the future. Bitcoin with Ripple may very well become the yin/yang of commodity/credit.

[Cyrus]

I may very well be too tired, but it's not open yet right?

for instance I have this wallet: rwz16xpq7e6DxpguH849fkvVNDP9psrh9i
I pressume, a XRP wallet. What next?

[Walter Rothbard]

I mow your lawn, you wash my car. That's it. No need for any of us to go to a gold mine.

Right!  I'll just give you 2.3 lawn mows for 1.7 car washes.

The disadvantage of commodity currencies is that they're scarce and become target of speculation.

I find scarcity (finiteness) to be an advantage in money, not a disadvantage.  And the same for speculation.

Every form has advantages and disadvantages. If people learn these differences and how to apply them property, we may have a rich ecosystem of different moneys in the future.

This I like and can get behind!

[Atruk]

I haven't checked out Ripple, but one thing I know is that mining was a bad idea. Also, capping currency growth was another bad idea. Whatever the Bitcoin replacement is will have a built in mechanism for increasing the currency volume in proportion to usage. Bitcoin will be like the Mosaic browser and the bitcoin killer will be Netscape.

You're in the wrong part of the forum:

https://bitcointalk.org/index.php?board=67.0

Let's be a bit more specific... https://bitcointalk.org/index.php?topic=38453.0

This one continues its currency growth even as it is completely abandoned and unused.

[herzmeister]

Right!  I'll just give you 2.3 lawn mows for 1.7 car washes.

The common unit of accounting can be anything such a barter network would agree upon. It can very well be immaterial.

I find scarcity (finiteness) to be an advantage in money, not a disadvantage.  And the same for speculation.

Again, a commodity is just a tool. A tool to store and transport the information of value. It is not money itself. And this tool is slowly becoming anachronistic in this information age.

[marcus_of_augustus]

Right!  I'll just give you 2.3 lawn mows for 1.7 car washes.

The common unit of accounting can be anything such a barter network would agree upon. It can very well be immaterial.

I find scarcity (finiteness) to be an advantage in money, not a disadvantage.  And the same for speculation.

Again, a commodity is just a tool. A tool to store and transport the information of value. It is not money itself. And this tool is slowly becoming anachronistic in this information age.

I hear what you are saying and I think are mostly right, however you also seem to be saying there is some kind of monetary information tool that can function without a common denominator of value (i.e. a unit of account)?

[miscreanity]

After looking at the available information, it appears that the consensus approach taken by Ripple is like Whack-A-Mole - that's a good thing. It looks as if the network will be a self-contained and resilient entity once it reaches an early-stage critical mass, most likely by riding Bitcoin's coattails; the two do work in a highly synergistic fashion.

One aspect that I haven't yet had the opportunity to explore fully is use of the XRP currency/token. It looks as though it could easily gain its own monetary function within the Ripple network above and beyond providing transaction fees. That could be a potential weak point, unless my current understanding is mistaken.

Gateway services seem to essentially tag an external currency transaction with XRP to facilitate movement. What happens after the transaction has completed is disbursal of the transaction fee among XRP accounts in proportion to their holdings. I have not seen exactly how this disbursement occurs, but proportional distribution sounds dangerous.

Other than that, I think the structure is strong. Hopefully we'll start seeing numerous Ripple nodes in the immediate future.

[Walter Rothbard]

I find scarcity (finiteness) to be an advantage in money, not a disadvantage.  And the same for speculation.

Again, a commodity is just a tool. A tool to store and transport the information of value. It is not money itself. And this tool is slowly becoming anachronistic in this information age.

I sort of agree, but I don't see how it would make me not desire scarcity.

[dmatthewstewart]

Someone send me some Ripples!!

rLbxMnoSK2RS3nw6d2YQvgmH3PtpK2SVTf

[JoelKatz]

Gateway services seem to essentially tag an external currency transaction with XRP to facilitate movement.

Not quite. Fundamentally, a gateway is an entity that has "withdraw on demand" agreements with a significant number of people. Any of those people who hold the gateway's IOUs can redeem them for something nearly equivalent to the value of the IOU. This effectively "backs" those IOUs and gives them value, making them akin to a check made out to "cash".

What happens after the transaction has completed is disbursal of the transaction fee among XRP accounts in proportion to their holdings. I have not seen exactly how this disbursement occurs, but proportional distribution sounds dangerous.

The disbursement occurs simply by destroying the XRP. The total amount of XRP in existence is always stored in the ledger header. So you can, if desired, "normalize" your XRP holdings to provide a number that's the same fraction of the XRP in existence.

[miscreanity]

Gateway services seem to essentially tag an external currency transaction with XRP to facilitate movement.

Not quite. Fundamentally, a gateway is an entity that has "withdraw on demand" agreements with a significant number of people. Any of those people who hold the gateway's IOUs can redeem them for something nearly equivalent to the value of the IOU. This effectively "backs" those IOUs and gives them value, making them akin to a check made out to "cash".

Ok - that sounds more like message-passing. The way I had suggested tagging, there'd might have to be hooks for every type of currency.

What happens after the transaction has completed is disbursal of the transaction fee among XRP accounts in proportion to their holdings. I have not seen exactly how this disbursement occurs, but proportional distribution sounds dangerous.

The disbursement occurs simply by destroying the XRP, increasing the value of everyone else's XRP. The total amount of XRP in existence is always stored in the ledger header. So you can, if desired, "normalize" your XRP holdings to provide a number that's the same fraction of the XRP in existence.

So the 100,000,000,000 XRP actually decrease in number? Interesting - if true, it would make the value of remaining units naturally increase in proportion to the total remaining. That provides the incentive to run server nodes, as facilitating network growth means more transactions are executed, and wealth increases - not to mention naturally minimizing transfers due to the accrual of value. However, XRP may need to be infinitely divisible, or the unit supply could become exhausted even if the cost of transactions decline.

[mobile4ever]

What happens if my account gets hacked? Can the hacker leave me and my friends with an infinite amount of "debt"?

Keep it backed up at all times and have it encrypted with the "key" only in the possession of your friends.

[Monster Tent]

is that mining was a bad idea

It is the only way to have a decentralized system that no one can control

Whatever the Bitcoin replacement is will have a built in mechanism for increasing the currency volume in proportion to usage.

I won't use it too. Bitcoin is digital gold, and you can't "increase" gold at will!

Alternative currencies are a form of increasing the volume.

[Walter Rothbard]

is that mining was a bad idea

It is the only way to have a decentralized system that no one can control

Whatever the Bitcoin replacement is will have a built in mechanism for increasing the currency volume in proportion to usage.

I won't use it too. Bitcoin is digital gold, and you can't "increase" gold at will!

Alternative currencies are a form of increasing the volume.

Yes and no, because alternative currencies don't exchange on par with bitcoin to start.

[thoughtfan]

OK, please bear with me here I've sort-of read quite a lot but still don't feel I 'get it' so I'll put forward what I think I understand from it and I'd appreciate someone putting me right if I'm wrong.  Bear with me whilst I think aloud with this...

So Ripple is a credit network.  So if I want to start a network with my friends/family I go to each and say: "We need to agree an amount you would be happy to lend me about which you'd be confident I'd pay you back even if I lend it to someone else and I never get paid back.  Also vice versa, an amount I would be happy to lend you confident if you lent it to someone else and they failed to repay you'd still pay me back out of your own pocket."

So although most of the time the lending would happen in principle with no money actually exchanging hands each in the chain is taking the risk and needs to accept responsibility for the creditors they've extended trust to.  If this doesn't happen isn't it a bit precarious?

But if this does work, let's say I put up a craigs list or ebay type site that works cash on delivery, no charge-back risk and negligible transaction fees.  I could invite those in my immediate and then extended networks to put something up for sale and to see if they fancy buying something off it.  If it got to the stage where someone wanted to buy something Ripple could more-or-less be used as escrow so the buyer would 'lend' credit to the seller who puts it in the post (seller taking risk of non-delivery).  When it arrives the buyer makes a bitcoin or bank transfer to the seller.  I like this because it by-passes the whole feedback thing which whether on ebay or on a web of trust is too easy to build up a reputation in order to abuse it.  With Ripple the only people you can rip off are your own friends and family.*

If I put BTC for sale for pounds on this web listing service of mine (or pounds for BTC) then it takes out the chargeback issue that most seems to scupper all scalable attempts I've read about.  It's only one step further then, as these mini-networks join up, to a proper p2p currency exchange with the Ripple trust network meaning people can have confidence that i) a listed order is a promise to exchange at that rate ii) trades are honoured, are 'cleared' at the end of the day by bank transfer or whatever.

I really like the principle (if I've understood it right).  The only thing that may be awkward is in finding a reason for someone to get enthused and join me to establish my direct links in my network when I have to explain there is a risk of losing money and there's very little gain for having done so - and I thought Bitcoin was a hard sell!

Also, every person in the chain needs not only to be trustworthy to the credit limit extended but also must have the means of being able to pay it in the event something goes wrong.

As a consequence the network may be very large and interconnected for small transactions but the bigger the transaction, the fewer the links with sufficient credit to carry it (except I suppose where there's more than one pathway over the weakest link the maximum credit is the sum of both max credits)?

Mmm, food for thought - but I think I like it

*I guess a COD silk road equivalent could also work, negating the risk of apparently expensive escrow or someone running off with hundreds of thousands of bitcoin (as I seem to recollect having read about recently).

[Roger_Murdock]

Money is merely information. That's all it is. Who owes what to whom. Information should not be scarce.

You're absolutely right that money is merely information, but it's information about scarcity! After all, scarcity is the fundamental economic problem, i.e., the reason we need money in the first place. And that's why money needs to be scarce. If it's not, it can't accurately convey information about the underlying scarcity of real resources.