You guys gonna become paranoid about Ripple

[oakpacific]

An important property of Ripple is that it is *impossible* (without an error) to end up losing more money than the sum of all the trust you choose to extend. You can't accumulate a mountain of defaulted debt unless you extend a mountain of trust to people. Conversely, if you extend somebody trust of 10 BTC, you are extending them the ability to take 10 BTC from you. Ripple doesn't magically make loaning money to people a good idea.

Thanks for clarification, but unfortunately this doesn't completely solve my problem, the said brilliant kid could set his threshold reasonably high, with the belief that his elite friends are gonna borrow from other elites, who could be trusted to pay back, yet have not anticipated his poor friends to borrow from him en masse out of coincidence/some other reasons(e.g., I find out I could borrow from wealthy people, good! My friend as a guarantor? Double good!). And our assumption is that all entities act out of goodwill, we have not touched the possible scenario of abuse yet.

When you trust somebody, you are trusting them to honor their IOU's. Full stop. When a transaction ripples through several people, each of them is left holding some IOU's of the next person in line. Each person is responsible for honoring their own IOU's, independent of whatever else happens. If you refuse to honor your IOU until your friend honors his, that's reneging on the agreement.

In my opinion, the trust system in Ripple doesn't mesh well with most people's expectations about social credit.

I did not mean that it's not a good idea that you go ahead and create it, I just doubt it would be successful, cause you will have to offer a competitive advantage over the current system of trust to make it successful, but I could hardly see any such advantage offered by Ripple from the information I have gathered.

[moocowpong1]

An important property of Ripple is that it is *impossible* (without an error) to end up losing more money than the sum of all the trust you choose to extend. You can't accumulate a mountain of defaulted debt unless you extend a mountain of trust to people. Conversely, if you extend somebody trust of 10 BTC, you are extending them the ability to take 10 BTC from you. Ripple doesn't magically make loaning money to people a good idea.

So the software itself would not try to help me to decide how much I should loan to, say, a friend of my friend? And still, the damage of the network effect remains the same, albeit in a different way--an abuser can still manage to raise a huge amount of money by strategically placing himself in the network, surrounded by a large number of borrowing agents, and run away with other people's money.

There is very little difference between giving somebody trust and giving somebody money directly. As soon as you trust me, I can deposit your money at Bitstamp and leave you holding my IOU's. Don't extend trust to people without reason.

I'm starting to think that the language of Ripple needs revamping. People think that "trusting" people is a good thing, something you're supposed to do. It's not. Don't do it. It means something to the system, and "something" is "you can take my money".

[slothbag]

Imagine having built up a small fortune in IOUs in ripple, assumedly you would have some pretty large trust limits to some other high profile entities.. If you were owed a lot by these other entities you would be forever paranoid that they might collapse.. always checking up on their operations.. and similarly, if they paid the debt to you and your large trust limit remains, you would also have to keep checking their reliability so there is no chance they borrow a crap load before bolting..

Sounds exhausting..

[moocowpong1]

Imagine having built up a small fortune in IOUs in ripple, assumedly you would have some pretty large trust limits to some other high profile entities.. If you were owed a lot by these other entities you would be forever paranoid that they might collapse.. always checking up on their operations.. and similarly, if they paid the debt to you and your large trust limit remains, you would also have to keep checking their reliability so there is no chance they borrow a crap load before bolting..

Sounds exhausting..

I don't get it. Why? I don't want to deal with that. I'd have a large trust limit with my gateway and small, throwaway trust limits with my friends. Part of the point of Ripple is that you can use the liquidity of the network to always receive IOU's you trust, like ones from a reputable gateway. And I'd withdraw from my gateway periodically to keep that balance from getting too large. No reason to lose everything if your gateway or the Ripple network goes down.

[oakpacific]

An important property of Ripple is that it is *impossible* (without an error) to end up losing more money than the sum of all the trust you choose to extend. You can't accumulate a mountain of defaulted debt unless you extend a mountain of trust to people. Conversely, if you extend somebody trust of 10 BTC, you are extending them the ability to take 10 BTC from you. Ripple doesn't magically make loaning money to people a good idea.

So the software itself would not try to help me to decide how much I should loan to, say, a friend of my friend? And still, the damage of the network effect remains the same, albeit in a different way--an abuser can still manage to raise a huge amount of money by strategically placing himself in the network, surrounded by a large number of borrowing agents, and run away with other people's money.

There is very little difference between giving somebody trust and giving somebody money directly. As soon as you trust me, I can deposit your money at Bitstamp and leave you holding my IOU's. Don't extend trust to people without reason.

I'm starting to think that the language of Ripple needs revamping. People think that "trusting" people is a good thing, something you're supposed to do. It's not. Don't do it. It means something to the system, and "something" is "you can take my money".

That's essentially why I believe a software should not try to be helpful here, it's a completely human issue, a person should always take any lending activities seriously, come to know the person and talk to him/her, especially if it's someone you don't personally know. In fact, try to assess the counterparty risk of some unknown entities is just what all those MIT Ph.D quants in the Wall Street have been trying to do for years yet completely screwed up, and you guys maybe bringing more variables into a already complex formula.

Without Ripple's convenience people have been unable to curb their urges to lend/borrow(or you could call it invest) irresponsibly, which creates the recession we are now in, I doubt with Ripple it could be even better. If an abuser screws up hugely and leaves the network with a huge web of debts, it seems to me hardly any new capital would risk to get into it again. Bitcoin on the other hand doesn't have to face such problems.

Remember as a startup you have to offer clear advantages over the established, if people should be left to figure out if you have anything clearly desirable, they most likely will choose to stay with the established.

[moocowpong1]

That's essentially why I believe a software should not try to be helpful here, it's a completely human issue, a person should always take any lending activities seriously, come to know the person and talk to him/her, especially if it's someone you don't personally know. In fact, try to assess the counterparty risk of some unknown entities is just what all those MIT Ph.D quants in the Wall Street have been trying to do for years yet completely screwed up, and you guys maybe bringing more variables into a already complex formula.

Without Ripple's convenience people have been unable to curb their urges to lend/borrow(or you could call it invest) irresponsibly, which creates the recession we are now in, I doubt with Ripple it could be even better. If an abuser screws up hugely and leaves the network with a huge web of debts, it seems to me hardly any new capital would risk to get into it again. Bitcoin on the other hand doesn't have to face such problems.

Bitcoin has exactly the same problems. Bitcoin makes it easy to lend money to anonymous people over the internet, without access to any of the social or legal protections that come with transacting face-to-face. That's why this forum will shout "SCAM" at every shadow: they've been burned before.

[oakpacific]

That's essentially why I believe a software should not try to be helpful here, it's a completely human issue, a person should always take any lending activities seriously, come to know the person and talk to him/her, especially if it's someone you don't personally know. In fact, try to assess the counterparty risk of some unknown entities is just what all those MIT Ph.D quants in the Wall Street have been trying to do for years yet completely screwed up, and you guys maybe bringing more variables into a already complex formula.

Without Ripple's convenience people have been unable to curb their urges to lend/borrow(or you could call it invest) irresponsibly, which creates the recession we are now in, I doubt with Ripple it could be even better. If an abuser screws up hugely and leaves the network with a huge web of debts, it seems to me hardly any new capital would risk to get into it again. Bitcoin on the other hand doesn't have to face such problems.

Bitcoin has exactly the same problems. Bitcoin makes it easy to lend money to anonymous people over the internet, without access to any of the social or legal protections that come with transacting face-to-face. That's why this forum will shout "SCAM" at every shadow: they've been burned before.

First, Bitcoin is llike a cutting knife, it enables you to do many things, including killing, but I don't think anyone would say owning a cutting knife is problematic because it could be used to kill. While Ripple's IOU system is just like a gun, which is clearly designed and manufactured for one single purpose.

Second, I was talking about how Ripple's IOU network could possibly cripple due to abuses, which is probably not a problem bitcoin has to face, as it doesn't have to rely on anyone's trust to work.

[piramida]

Thanks for clarification, but unfortunately this doesn't completely solve my problem, the said brilliant kid could set his threshold reasonably high, with the belief that his elite friends are gonna borrow from other elites, who could be trusted to pay back, yet have not anticipated his poor friends to borrow from him en masse out of coincidence/some other reasons(e.g., I find out I could borrow from wealthy people, good! My friend as a guarantor? Double good!). And our assumption is that all entities act out of goodwill, we have not touched the possible scenario of abuse yet.

You seem to miss the point that there is a cap on each link in the social trust network, or maybe I misunderstand you. Poor friend in India who makes 10$ per month? Cap trust at 5$. Elite friend who drives porshe? 10k. That way it would take a thousand poor friends back home to saturate your one link to the elite, an unrealistic scenario.

But still, I understand and agree with what you are saying. You, being responsible with your own money without even doing any actions after building a web of trust, sounds a little strange. After all, hawala, which this thing tries to be, besides trust also involves severe punishment if this trust is broken. A part that is completely missing from this protocol

[oakpacific]

Thanks for clarification, but unfortunately this doesn't completely solve my problem, the said brilliant kid could set his threshold reasonably high, with the belief that his elite friends are gonna borrow from other elites, who could be trusted to pay back, yet have not anticipated his poor friends to borrow from him en masse out of coincidence/some other reasons(e.g., I find out I could borrow from wealthy people, good! My friend as a guarantor? Double good!). And our assumption is that all entities act out of goodwill, we have not touched the possible scenario of abuse yet.

You seem to miss the point that there is a cap on each link in the social trust network, or maybe I misunderstand you. Poor friend in India who makes 10$ per month? Cap trust at 5$. Elite friend who drives porshe? 10k. That way it would take a thousand poor friends back home to saturate your one link to the elite, an unrealistic scenario.

But still, I understand and agree with what you are saying. You, being responsible with your own money without even doing any actions after building a web of trust, sounds a little strange. After all, hawala, which this thing tries to be, besides trust also involves severe punishment if this trust is broken. A part that is completely missing from this protocol

Better said than I ever did, bro, this is essentially my view ATM. The concept is all fine and dandy, but in the real world people always tend to abuse such a system, you will find out the very trustworthy counterparty you are borrowing to is overleveraged to the brink of collapse, because, well, other people found him trustworthy as well. And Ripple is not helping here by trying to do what Wall Street has tried to do for years but failed: simplifying and evaluating the counterparty risk as a single number. I am not saying that the software creators should be responsible for these things, but I strongly dislike the philosophy that software should ever try to be helpful in the very complex human business of risk assessment, all the algorithms created by the quants are neutral after all.

As for the poor Indian friend: it's said somewhere in the Ripple webpages that in the old system banks only evaluate the risk with quantifiable terms like income, while disregarding important things for human like love and trust, etc, well in this spirit I guess I should not treat my poor and wealthy friends purely based on their financial conditions, otherwise why not just use banks as they are, at least theoretically, more professional in risk assessment?

[Odalv]

I'm starting to think that the language of Ripple needs revamping. People think that "trusting" people is a good thing, something you're supposed to do. It's not. Don't do it. It means something to the system, and "something" is "you can take my money".

Yep. We should not say "I'll trust Joe/MtGox for $100". Instead, we should say "I'll risk $100 of my money with Joe/MtGox".

I can verify Joe/MtGox, but I absolutely cannot thrust an anonymous friend of your friend.

[b!z]

Pardon my french, but what the fuck is Ripple? And why should I give a flying fuck?

Ripple is a system to transfer debt.

[TTBit]

I'm starting to think that the language of Ripple needs revamping. People think that "trusting" people is a good thing, something you're supposed to do. It's not. Don't do it. It means something to the system, and "something" is "you can take my money".

Yep. We should not say "I'll trust Joe/MtGox for $100". Instead, we should say "I'll risk $100 of my money with Joe/MtGox".

I can verify Joe/MtGox, but I absolutely cannot thrust an anonymous friend of your friend.

Trusting a friend for $20 on ripple is giving them a signed blank check that says "not to exceed $20" on it.

Now, your friend can't go into the grocery store and sign over a 3rd party personal check for groceries, it would be rejected. He can write his own iou/check for groceries however. The grocery store will come after your friend if the check bounces, not you.

[cypherdoc]

Pardon my french, but what the fuck is Ripple? And why should I give a flying fuck?

Ripple is a system to transfer debt.

Sounds like playing hot potato to me.

[BitcoinAshley]

I'm starting to think that the language of Ripple needs revamping. People think that "trusting" people is a good thing, something you're supposed to do. It's not. Don't do it. It means something to the system, and "something" is "you can take my money".

Yep. We should not say "I'll trust Joe/MtGox for $100". Instead, we should say "I'll risk $100 of my money with Joe/MtGox".

I can verify Joe/MtGox, but I absolutely cannot thrust an anonymous friend of your friend.

You aren't talking about ripple, though. You are not required to trust an anonymous friend of anyone else's friend. You aren't required to trust ANY anonymous friend. Heck, you aren't required to trust anyone. But if you do decide to trust people, you are only trusting those you immediately decide to trust - and sure, by proxy, you are including every single person in the ripple network, but the trust of the friend includes trust that that friend will also limit his/her liability in an intelligent way. If you don't know people who are trustworthy, then simply do not participate. But you do not have to trust an anonymous friend of a friend, and certainly trusting even an anonymous friend is a bad idea by most folks' standards.

Lowest hypothetical risk - Not using ripple at all, not trusting anyone
Medium hypothetical risk - trusting a very small amount of money with several close friends.
Highest hypothetical risk - trusting a very large amount of money with a bunch of random anons behind tor.

And people might say "Well I don't want to take ANY risk!" So why are you invested in Bitcoin? There is a risk with everything. So then we must ask what is the benefit. For the example given above - someone transfering their paycheck to BTC sending to egypt and converting to EGP - obviously ripple gives no benefit in that scenario, so the person who posted that obviously has performed a risk/benefit analysis and determined that he should probably not risk trusting any friends in Ripple as no benefit will come of it.
However, what if in a different scenario, someone is greatly benefited by Ripple and therefore it is worth the small risk of a small amount of $$ "risked" with a few closed friends to gain access to the network? So what if someone has gold and wants to transfer it to someone in Siberia who only accepts Canadian Tire money or whatever? Easier with Ripple than with Bitcoin. Ripple was expressly designed for transactions like that. Note that Ripple is hypothetically not the only option for transactions like this in the future - someone can easily frankenstein the concept and release it "the rite way" i.e. not premining coins, being dodgy about its purpose or XRP's role as a currency, etc etc etc. Basically not doing everything possible to make bitcoiners shout "scam" while also aggressively courting bitcoiners. What was up with that? It's like they can't decide whether they want to attract us or drive us away.

[Beepbop]

What I understand which has made me give up:

Ripples are pre-mined and possessed by a central company

Just like frequent flier miles are handed out by an airline, prepaid minutes are owned by a phone company, or stamps are "pre-mined" by the post office. You're free to use it as currency, but keep in mind that they're basically just future transaction fees (the number of transactions one XRP pays for isn't 100% certain either, since it depends on load).

Seems like someone is trying to make money off me

They are trying to make as much money as you're willing to pay for the convenience of using the system, while at the same time not killing it by over-pricing their services.

I received no roi on my hours of research and I am cranky

It's still in beta. It took many years before my PGP web of trust expanded to be useful enough that I could communicate securely without having to do a precursory key exchange. It was still something that I learned from and that I could write credit-giving essays and papers about.

Ripple's main challenge is to get a critical mass of gateways and IOUs going, as well as overcoming legal issues. The basic protocol itself appears sound, though there might be bugs hiding in the source code, so look forward to that getting released.

XRP shares some features with Bitcoin though, as well as other stocks and commodities, and one of those is that if you believe that Ripple is going up, feel free to invest, but that if public adoption fails, be prepared for a crash to near zero value.

[ElectricMucus]

Shameless self bump, I'm seeing it pop up in every discussion, meanwhile the FUD machine is in high gear, steering into a brick wall (end of beta)

How many Bitcoins have the ripplescam.org guys already payed?

[EuroTrash]

Shameless self bump, I'm seeing it pop up in every discussion, meanwhile the FUD machine is in high gear, steering into a brick wall (end of beta)

How many Bitcoins have the ripplescam.org guys already payed?

Humbly I say I don't understand where you're coming from so I think I am missing the context.
ATM what confession do you belong to? Ripple haters or Ripple converts?

Speaking of walls: there is a huge one at 10 million XRP for 50 XRP/USD in the XRPUSD orderbook. BitStamp stopped selling away XRPs at that price around the time that wall was touched last Friday.
I believe the Ripple Masters (Jed & co) want the XRP price to stay there for a while. Either that or they have decided to collect 200k USD for OpenCoin's pocket expenses.

Also I noticed in Ripple that the XRPUSD volume and depth are growing faster than the XRPBTC ones.
Dunno if that's an application of the bigger fool theory. But yes the herd thinks of XRPs like another altcoin. IMHO because it is. And part of the mass doesn't care it's premined. Metaphorically speaking I bet it's those people that e.g. would choose dictatorship over democracy in exchange for a false sense of security. If it works for them and if Jed proves to be a benevolent dictator then happy days.

Methinks: since the spreads in XRPBTC are way larger than in XRPUSD, that is an opportunity for someone to write arbitrator bots and increase their BTC count or XRP count for free depending on which confession they choose to belong to.

[Miz4r]

XRP can't and won't compete with bitcoin as a cryptocurrency, that's just ridiculous if you know how it's made and what it is meant for. People are just using it to speculate with, which I think is stupid but whatever speculators will use anything nowadays to pump up and then dump for profit. Bitcoin is probably too stable right now for speculators so they look for something else. Ripple itself could complement Bitcoin, I don't see it as a threat at all.

[Draino]

I get a weird feeling in my gut that calling the organization opencoin and promising to open source/decentralize it increasingly with time was a way for some sinister force to manipulate big brains towards the dark side.

I hope it's just indigestion, though.

[afbitcoins]

Haven't read though the comments so apologies if this is just repeating what anyone already said, however I think of ripples as a trojan horse in crytocurrency.

This isn't paranoia as far as I'm aware these are fact....

Ripples provides a method where people will hold IOUs representing bitcoins instead of bitcoins, whilst mistakenly assuming they are holding bitcoins. This sets a very dangerous precedent and is very similar to the way gold was replaced by paper representations of gold over the centuries.

The lie is that ripples will somehow help the bitcoin economy and work with it. This is not true, ripple will attempt to replace bitcoins with a fake mirage of bitcoins.

Ripple also provides a centralised controlled network for trading debt where the quantity of units in circulation representing that debt XRP can be inflated at the whim of the controllers. Does this sound familiar? This is the way debt based money currently operates already, and which bitcoins is fighting against.

Ripple is a trojan horse because it will attempt to control and kill the power of free money like bitcoins which will be able to hold value. Bitcoins are not debt, they are an asset you can hold which is nobodies liability.

Another huge warning sign is that Ripple claims to be 'open' misleading people to assume it is open source software, this is not the case. the software is not open at all. 

Avoid ripples, do not support this debt based system.