ripple: let's test it!

[molecular]

interesting...



It seems some notifications are displayed (or happen?) multiple times.

And also: the system seems to have discovered some sort of a "situation": I'm not sure I did enter that offer "You created an offer accepting 1 BTC for 10,000 XRP" myself. There seems to be some bug regarding this: https://ripple.com/forum/viewtopic.php?f=1&t=572

hmmm...

[molecular]

So can someone explain what the adding of the trust actually does?

Adding trust allows someone to owe you money -- potentially money that you might owe to other people. If you extend, say, 1 BTC of trust to me, and I stop using the Ripple system to hold Bitcoins and screw you, you may wind up owing 1 BTC to someone else or losing 1 BTC you held.

At this time, we are only recommending that people extend trust to gateways.

Again, if you extent $10 in trust to someone, you may wind up losing $10 you hold at a gateway and instead having them owe you $10. Instead of getting paid $10 for something, you may wind up having them owe you $10. Issuing trust to someone is like using them as a bank.

On the flip side, you can only hold someone's IOUs if you trust them to send you money. And you can exchange those IOUs for any IOUs they hold in the same denomination, or any credit available to them in the same denomination.

Ok, just deposited 1 BTC to bitinstantbitstamp. As I understand, I can later withdraw 1 BTC to my ripple wallet. I'm still getting used to the terms... in doing this, who extends credit to whom?

That is correct. You are extending credit to bitinstantbitstamp since you are allowing them to owe you at least 1 bitcoin. When you withdraw that bitcoin into your Ripple wallet, you will hold an IOU that says that bitinstantbitstamp owes you 1 Bitcoin. You can then transfer or exchange that IOU on the Ripple system. People who have bitinstantbitstamp accounts will value that IOU at 1 bitcoin since they can turn it into 1 bitcoin by redeeming it.

Thanks for those explanations, Joel.

So what we're doing here... extending trust amongst "trusted forum members", is basically like "building a p2p banking system of the people"?

Of course anyone can run at any time: let's say I have a good balance in my ripple wallet and "cash them out for BTC using bitstamp gateway" and run with the blockchainBTC saying "to hell with my forum rep and the fact that many people know my real identity", then various people will be left "holding the bag" of worthless molecularOUs? Hmm, they could sue me and use ripple to proove I owe them, right?

[markm]

Who extends credit to whom is something banks have managed to confuse us all about for centuries.

When you deposit currency in a bank, they, being in the position of power, like to speak of the situation as if they don't owe you anything, they merely hold some funds on deposit for you.

When a gateway sends you some of their IOUs in Ripple though, that is how, in Ripple, by convention, them owing you funds is customarily represented.

Typically they don't want you to owe them anything, because, frankly, they don't want to or need to trust you so don't really have any incentive or reason to trust you, so typically they don't bother to trust you.

Thus they like to be the issuer of the IOU that represents an imbalance, a deviation from the blank initial state of neither of you owing the other anything.

With banks, the accounting entry that they like to refer to as "the balance of your account" corresponds to what Ripple is representing by putting into your account an amount of the other party (the bank/gateway)'s IOUs. It is how much they owe you. I suppose it is somewhat understandable why they like to use their nice little euphemism "the balance of your account" instead, else who knows, some peasant some day might wonder how much the bank actually owes...

The depositors have, in effect, extended credit to the bank.

-MarkM-

[lebing]

Mol, I trusted you for 1 btc and 5 usd

Here is my address: rJFGHvCtpPrftTmeNAs8bYy5xUeTaxCD5t

I just discovered your address popped up in "advanced" -> "trust" list (with 0 trust of course).

I trusted you back, but "only" with 0.5 BTC, 5 USD.

I think we should go low on the trust values for now until we all understand the implications better. There will be people trying to scam us pretty soon . Not that I don't trust YOU, but I don't know exactly how these trust-lines work and who knows who YOU trust...? Thoughts?

Its all good =)

Sharing exactly as much as each of us wants/ is comfortable with is exactly how this is supposed to work.

[molecular]

errr. what.



Simple Scenario:

I am a merchant, accepting RPX for my goods.
You buy a crate of canned Mmmmmmmh.... for 140.000RPX

I need a gateway to instantly turn this around into BTC, send to my payment provider and THEN it's considered "paid".

All thus hubbub about trusted ripplebitcointokens from IOUs is way to WTF.

I can feel your concern. Let me try to help you  (but note: I'm total ripple-noob myself)

1.) it's XRP, not RPX. XRP is just a spam-prevention-coin. As I understand it, it's not some "ripple reserve currency". Bitcoin will be that?
2.) It's considered paid even before you cash out through a gateway. Those gateways are just gateways to the old banking system and will not be needed in the long run. Ripple will replace the old banking system. (again: take with grain of salt, I'm total newb)
3.) I agree this shit is totally WTF. Much more WTF than bitcoin was to me when I first discovered it, but almost as "holy shit it could really work" as bitcoin.

[pof]

@molecular the gateway is bitstamp, not bitinstant

[lebing]

1.) it's XRP, not RPX. XRP is just a spam-prevention-coin. As I understand it, it's not some "ripple reserve currency". Bitcoin will be that?
2.) It's considered paid even before you cash out through a gateway. Those gateways are just gateways to the old banking system and will not be needed in the long run. Ripple will replace the old banking system. (again: take with grain of salt, I'm total newb)
3.) I agree this shit is totally WTF. Much more WTF than bitcoin was to me when I first discovered it, but almost as "holy shit it could really work" as bitcoin.

Actually, XRP is the "reserve" currency as you put it. This is the way they are planning on monetizing the system. That being said, its not the "only" reserve currency - ie. its not either/or, its much more of an and situation with the other currencies (most likely bitcoin will emerge as a leading currency I imagine).

[molecular]

@molecular the gateway is bitstamp, not bitinstant

oops, thanks. will correct.

[markm]

So, onward toward being a gateway.

I myself have created a test account in Ripple, and it is, like all accounts people are creating by using the create account button currently, basically what we might as well think of as a personal account.

Specifically, it is an account that has not been set to require "destination codes".

The lack of "destination codes" means whatever people send to it just lands in the account, with no code that an app could be watching for to tell the app that the incoming transfer is intended for so-and-so care of me, rather than just plain being to/for me.

Thus this account is not the one I will be using in my capacity as some kind of gateway / exchange / cold-wallet-operation enterprise.

I actually seem to recall having read that to activate the "requires destination codes" mode on an account you should (or maybe need to / have to) do that before starting to use the account for anything. So it is possibly even too late now to ever turn on that mode for this account.

I am not publishing here the account number of that account yet because so far it is a test account, and I want anyone who ends up making use of it to be clear about that. It is specifically not the account of my intended/eventual gateway or exchange or cold-wallet-operator enterprise.

-MarkM-

[molecular]

So, onward toward being a gateway.

I myself have created a test account in Ripple, and it is, like all accounts people are creating by using the create account button currently, basically what we might as well think of as a personal account.

Specifically, it is an account that has not been set to require "destination codes".

The lack of "destination codes" means whatever people send to it just lands in the account, with no code that an app could be watching for to tell the app that the incoming transfer is intended for so-and-so care of me, rather than just plain being to/for me.

Thus this account is not the one I will be using in my capacity as some kind of gateway / exchange / cold-wallet-operation enterprise.

I actually seem to recall having read that to activate the "requires destination codes" on==mode on an account you should (or maybe need to / have to) do that before starting to use the account for anything. So it is possibly even too late now to ever turn on that mode for this account.

I am not publishing here the account number of that account yet because so far it is a test account, and I want anyone who ends up making use of it to be clear about that. It is specifically not the account of my intended/eventual gateway or exchange or cold-wallet-operator enterprise.

-MarkM-

I'm a bit confused... does one have to run a rippled node or not to offer gateway services?

[molecular]

I send XRP 1 to lebing, just to test some basic stuff

[molecular]

ok, cool

I just withdrew BTC 0.5 from bitstamp to my ripple wallet.

First it failed saying I needed to trust bitstamp with at least 0.5 BTC. After I extended my trust to bitstamp (it was USD 1 before), I reinitiated the withdrawal and it worked.

So who wants to give me some blockchainBTC for the same amount of rippleBTC just to test?

[markm]

I'm a bit confused... does one have to run a rippled node or not to offer gateway services?

That is probably more a political than a technical question: "Will others let you use their rippled to run your gateway?"

(How heavy usage, consuming how much of their power, and all that stuff.)

You pretty much ought to run your own, and there are commands you will want to send that include your account's secret so if you use someone else's you get into it being wise to sign the commands on your side instead of letting the server know your secret so it can sign your commands on your behalf.

Me I plan to wait until I have a rippled right here behind my steel plated door with me, so I can go ahead and not try to code or find some way of signing the commands before sending them to a rippled. But thats just me. I'm a bitcoiner. Bitcoiners don't hand out private keys (aka secrets) to third parties. Right?

-MarkM-

[lebing]

From bitstamp:

RIPPLE PAYMENT
RIPPLE IS CURRENTY DISABLED. PLEASE TRY LATER.

Bummer.

[molecular]

I'm a bit confused... does one have to run a rippled node or not to offer gateway services?

That is probably more a political than a technical question: "Will others let you use their rippled to run your gateway?"

(How heave use, consuming how much of their power, and all that stuff.)

You pretty much ought to run your own, and there are commands you will want to send that include your account's secret so if you use osmeone else's you get into it being wise to sign the commands on your side instead of letting the server know your secret so it can sign your commands on your behalf.

Me I plan to wait until I have a rippled right here behind my steel plated door with me, so I can go ahead and not try to code or find some way of signing the commands before sending them to a rippled. But that just me. I'm a bitcoiner. Bitcoiners don't hand out private keys (aka secret) to third parties. Right?

-MarkM-

I would love to run a rippled myself (even if it's only to support the network), but it seems the code is behind bars:

[markm]

I would love to run a rippled myself (even if it's only to support the network), but it seems the code is behind bars:

Oh good sleuthing, I hadn't ferreted out that URL, all I knew of was the "coming soon" placeholder public repo.

-MarkM-

[herzmeister]

added you folks who posted their addresses in this thread so far

lebin, Mageant, gweedo, Severian, molecular

gave you some trust also

my address is

rUdPvX9YN1NwyniwiJeSW6y3YKZL84gsB6

[markm]

So, on with aspects of being a [service provider of some kind] on the Ripple network:

Things one can start getting into place while waiting for rippled source code:

Cold wallet(s)!

A core component of my Open Transactions server enterprise that my Ripple-side enterprise will also be needing.

I like to run token-issuing, which Ripple, on the Ripple side, calls IOU-issuing, as a 100% reserve operation.

Thus before I issue any tokens aka IOUs, I like to secure, securely, actual real on the blockchain coins before getting into the issuing of any tokens representing such coins.

My mention of a cold storage operator type of enterprise earlier was because I like to differentiate hot wallet services from cold wallet services.

For one thing, that lets me build enterprises modularly. Nothing need go in hot or out hot from cold storage. Cold storage is very cold.

Ideally, what goes into cold storage stays there for as long as the type (denomination) of tokens (aka IOUs) that are to represent it seem likely to be of use. They should not need to come back out of cold storage until no further/future need for such tokens is expected/anticipated.

Hot wallet(s):

A hot wallet operation is the part of the enterprise that sends and receives coins on the blockchain side and which will, once rippled is running and the other steps that await a running rippled are done, possibly be exposed to the world via a web app. Ouch, yes, a web app. Danger, Will Robinson, Danger!

Since coins in the hot wallet operation will thus be exposed to the entire internet of hackers, obviously it would be irresponsible of me to put there, thus put at risk, any part of the cold-stored (ice cold, frozen, maybe buried in a Fortress of Solitude in the arctic or antarctic) 100% backing that backs issued tokens-aka-IOUs.

The coins in the "hot wallet" operation could vanish at any moment, thanks to the ingenuity of the entire internet of hackers.

No way do I want to be in the position of having issued an Open Trsnsactions token (on the Open Transactions side), nor a Ripple IOU (on the Ripple side) representing (backed by) any of those coins...

-MarkM-

[markm]

Today, with Ripple, you can receive Rpples (international currency symbol: XRP) if someone chooses to send you some and knows your Ripple account number.

Today, with Ripple, if you have enough Ripples (XRP) in your Ripple account to meet the "reserve requirements" imposed by the various options / services your Ripple account is using plus some XRP left over after meeting those "reserve requirements", you can, if you know someone's Ripple account number, send them some Ripples.

Having an account at all requires 200 XRP of "reserve", so if you have only 200 or less XRP in your Ripple account sorry, sending Ripples is not for you until you bring your Ripple account's XRP balance up over 200.

If you have set up a line of trust, each line of trust requires 50 XRP of reserve too, so if you have done that and have only 250 or less XRP in your account sending Ripples is, again, not for you until you bring your account's XRP balance up over 250 (or however much the account's reserve requirement adds up to given the number of lines of trust, market offers, and so on, you have set up).

Today, with Ripple, what you can do is limited, as an anti spam, anti overuse/abuse measure, by your supply/balance of Ripples.

-MarkM-

[molecular]

ah, nice. I can see some trust I put into bitstamp was used up (because I own an IOU from them worth 0.5 BTC):