2012-12-07 americanbanker.com - Disruptor Chris Larsen Returns with a Bitcoin

[Maciek]

http://www.americanbanker.com/issues/177_235/disruptor-chris-larsen-returns-with-a-bitcoin-like-payment-system-1055009-1.html

[420]

if anyone read; what are his supposed improvements over the bitcoin code?

[fancy_pants]

A block every few seconds instead of every few minutes. The article says this will make POS transactions be confirmed faster.

[420]

A block every few seconds instead of every few minutes. The article says this will make POS transactions be confirmed faster.

kickass

[db]

It is Ripple. Ripple is a great idea that has been around since long before Bitcoin and a good complement to it. Wonderful that someone is engaging this much in it. Together with Open Transactions we are getting ourselves some seriously disruptive economic infrastructure.

[grondilu]

It is Ripple. Ripple is a great idea that has been around since long before Bitcoin and a good complement to it.

Indeed Ripple and Bitcoin can be complementary.   Ripple is to credit what Bitcoin is to money.    Banks have so far been dealing with both concepts in the same time and bitcoin challenges them only on the money part.  Ripple could challenge them on the other one.

Though I'm not sure how Ripple works exactly, especially regarding whatever can be done whenever someone does not pay his debt.   In other words, I wonder if a credit/lending system can work without any kind of recouvrement (sorry I don't know the english for that).

[sunnankar]

In other words, I wonder if a credit/lending system can work without any kind of recouvrement (sorry I don't know the english for that).

Sure it could but would likely need to integrate with more traditional infrastructure. For example, A could trust B with $1,000,000 via contract with something like a line of credit secured by some asset. Should B default then A could seek recourse through the court system, or even use something like judge.me, against B and the secured assets according to the terms of the contract.

[cbeast]

Ripple is a great idea for a system for people that trust each other. It is not appropriate for a financial system as it is far more corruptible that the current fractional reserve system. IOUs, really? This is article is a disingenuous claim.

[BCB]

[snip]Larsen would say little about the details of the venture. "We're in stealth mode," he says[/snip]

Didn't Trendon Shavers say stuff like that?

[jimbobway]

In other words, I wonder if a credit/lending system can work without any kind of recouvrement (sorry I don't know the english for that).

Sure it could but would likely need to integrate with more traditional infrastructure. For example, A could trust B with $1,000,000 via contract with something like a line of credit secured by some asset. Should B default then A could seek recourse through the court system, or even use something like judge.me, against B and the secured assets according to the terms of the contract.

Ha.  The way lending works initially is if you don't pay back then u hire the mafia to break the borrowers leg.  Ripple will only work if the mafia equivalent group can be hired on silk road.  Otherwise, I believe ripple will fail.  Fugger also said the same problem existed with previous versions of ripple.  Everyone wants to borrow but no one pays back.

[db]

Fugger also said the same problem existed with previous versions of ripple.  Everyone wants to borrow but no one pays back.

No, this is the problem (with LETS) that Ripple solves.

Fugger conceived Ripple in 2004 after working on a "local exchange trading system" in Vancouver. This experiment in community currency was plagued by free riders who never fulfilled their obligations, says Fugger.

"My idea to fix this was that credits should never be owed to the system as a whole, but only to individuals within the system who have explicitly agreed to trust the issuer, and bear any loss if those obligations aren't fulfilled," Fugger says.

[jimbobway]

Fugger also said the same problem existed with previous versions of ripple.  Everyone wants to borrow but no one pays back.

No, this is the problem (with LETS) that Ripple solves.

Fugger conceived Ripple in 2004 after working on a "local exchange trading system" in Vancouver. This experiment in community currency was plagued by free riders who never fulfilled their obligations, says Fugger.

"My idea to fix this was that credits should never be owed to the system as a whole, but only to individuals within the system who have explicitly agreed to trust the issuer, and bear any loss if those obligations aren't fulfilled," Fugger says.

Trust is not enough.  You need law, contracts, enforcement and penalty.  The only penalty if you dont pay back is you get kicked out of you trust network, which is not a big deal.

[db]

Trust is not enough.  You need law, contracts, enforcement and penalty.  The only penalty if you dont pay back is you get kicked out of you trust network, which is not a big deal.

The trust network is your friends and family. Most people don't want to get kicked out of that. And those who don't care are already kicked out. It's just as easy to borrow money from friends and family without Ripple. It's just not as easy to use that credit to make payments to strangers across the world.

[cbeast]

Let's us dudes credit each other a million ripples so we can all be rippleaires. We'll give our friends a discount and kickback for accepting our IOUs. Then they can be rippleaires too!

[Anon136]

Fugger also said the same problem existed with previous versions of ripple.  Everyone wants to borrow but no one pays back.

No, this is the problem (with LETS) that Ripple solves.

Fugger conceived Ripple in 2004 after working on a "local exchange trading system" in Vancouver. This experiment in community currency was plagued by free riders who never fulfilled their obligations, says Fugger.

"My idea to fix this was that credits should never be owed to the system as a whole, but only to individuals within the system who have explicitly agreed to trust the issuer, and bear any loss if those obligations aren't fulfilled," Fugger says.

Trust is not enough.  You need law, contracts, enforcement and penalty.  The only penalty if you dont pay back is you get kicked out of you trust network, which is not a big deal.

but this is precisely how credit scores work and they work pretty well over all.

[db]

Let's us dudes credit each other a million ripples so we can all be rippleaires. We'll give our friends a discount and kickback for accepting our IOUs. Then they can be rippleaires too!

Go ahead! This affects no one but you and your friends. Great for you that you trust each other that much!

[cbeast]

Let's us dudes credit each other a million ripples so we can all be rippleaires. We'll give our friends a discount and kickback for accepting our IOUs. Then they can be rippleaires too!

Go ahead! This affects no one but you and your friends. Great for you that you trust each other that much!

This is how the current system works. It's not about friendship, it's about collusion. Quants make the IOUs out of whatever they scrape out of the trash bin and their broker buddies sell it to suckers. Ripple will work the same way.

[TraderTimm]

Ripple seems to be quite vulnerable to 'gaming' as some people have already said.

Any links or arguments that show otherwise?

In other words, if your intent is to exploit it, so you don't care about knock-on effects of being 'exposed', how far can you go? Seems as exploitable as online voting polls.

[db]

In other words, if your intent is to exploit it, so you don't care about knock-on effects of being 'exposed', how far can you go?

Suppose your mother gives you huge credit, say a ton of gold or simply infinity. Offer to buy bitcoin for gold and pay through Ripple. You would like to buy for a full ton of gold but sadly no one with an actual ton of gold gives that much credit to your mother. Maybe she gets a kg though, so you order 1 kg gold worth of bitcoin and get them sent to you. Now you have a 1 kg gold debt to your mother, she has a 1 kg debt to her friend who in turn has a debt to someone else all the way to the bitcoin seller.

If no payments flow in the other direction your mothers friend will eventually want the debt settled so she pays out 1 kg gold. This is ok, you are her beloved child and she would trust you with a ton of gold! When you meet next christmas she wants her gold from you. This is when you say "Go to hell, mum. My intentions are exploitation and I don't care about knock-on effects of being exposed.".

[cbeast]

In other words, if your intent is to exploit it, so you don't care about knock-on effects of being 'exposed', how far can you go?

Suppose your mother gives you huge credit, say a ton of gold or simply infinity. Offer to buy bitcoin for gold and pay through Ripple. You would like to buy for a full ton of gold but sadly no one with an actual ton of gold gives that much credit to your mother. Maybe she gets a kg though, so you order 1 kg gold worth of bitcoin and get them sent to you. Now you have a 1 kg gold debt to your mother, she has a 1 kg debt to her friend who in turn has a debt to someone else all the way to the bitcoin seller.

If no payments flow in the other direction your mothers friend will eventually want the debt settled so she pays out 1 kg gold. This is ok, you are her beloved child and she would trust you with a ton of gold! When you meet next christmas she wants her gold from you. This is when you say "Go to hell, mum. My intentions are exploitation and I don't care about knock-on effects of being exposed.".

Are you kidding? My dad would beat the shit outta her if she loaned anyone gold. I would need a version of Ripple that exchanges protection. Maybe you would have a bouncer dressed as Santa pay him a visit and take Ripple as payment. I'm not sure if he would need a gun though. Dad might get jealous of a guy carrying around a lot of presents. It might be better if he has a getaway driver as well, just in case. Happy Holidays!