ripple: let's test it!

[wyodude]

Question, If I have 1 Btc that has been withdrawn to Ripple from Bitstamp is that 1 Btc somehow labeled as such? In other words if I send 1 Btc that is an IOU from Bitstamp to someone in the ripple network can they then deposit the IOU to back to Bitstamp and withdraw that Btc to the Bitcoin Wallet of their choice?

afaik you are trading a bitstamp-bitcoin-iou which can be traded to "another-gateway-bitcoin-iou".
only bitstamp-bitcoin-iou can be withdrawn through bitstamp

^^ PLEASE correct me if i am wrong

So are you saying that Ripple network labels the IOUs? If say you send me 1 Btc, that you withdrew from Bitstamp, in exchange for whatever (XRP, USD)  will I be able to deposit that Bitstam IOU Btc to my Bitstamp account? 

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[moocowpong1]

Question, If I have 1 Btc that has been withdrawn to Ripple from Bitstamp is that 1 Btc somehow labeled as such? In other words if I send 1 Btc that is an IOU from Bitstamp to someone in the ripple network can they then deposit the IOU to back to Bitstamp and withdraw that Btc to the Bitcoin Wallet of their choice?

afaik you are trading a bitstamp-bitcoin-iou which can be traded to "another-gateway-bitcoin-iou".
only bitstamp-bitcoin-iou can be withdrawn through bitstamp

^^ PLEASE correct me if i am wrong

So are you saying that Ripple network labels the IOUs? If say you send me 1 Btc, that you withdrew from Bitstamp, in exchange for whatever (XRP, USD)  will I be able to deposit that Bitstam IOU Btc to my Bitstamp account? 

Here's an example:

I use the blockchain to send 1 BTC to my Bitstamp deposit address, then use the Ripple withdraw function. My Ripple account is now holding a 1 BTC Bitstamp IOU.

Suppose you trust Bitstamp for at least 1 BTC. If I choose to send 1 BTC to your Ripple account, the network will detect the chain of trust Me -> Bitstamp -> You. It will lower my balance with Bitstamp by 1 BTC and increase your balance with Bitstamp by 1 BTC, so now I am owed nothing by Bitstamp and you are owed 1 BTC. I have transferred my Bitstamp IOU to you.

You now look up your Bitstamp Ripple deposit address, and send it 1 BTC. Because the network forces an issuer to accept its IOUs at face value, it sees that it can send Bitstamp 1 BTC by lowering your balance with them by 1 BTC. You can now withdraw 1 BTC from Bitstamp to your Bitcoin address – you have redeemed that IOU for an actual bitcoin. At the end of the day, you have 1 "actual" BTC more than you started with and I have 1 "actual" BTC less.

[wyodude]

Question, If I have 1 Btc that has been withdrawn to Ripple from Bitstamp is that 1 Btc somehow labeled as such? In other words if I send 1 Btc that is an IOU from Bitstamp to someone in the ripple network can they then deposit the IOU to back to Bitstamp and withdraw that Btc to the Bitcoin Wallet of their choice?

afaik you are trading a bitstamp-bitcoin-iou which can be traded to "another-gateway-bitcoin-iou".
only bitstamp-bitcoin-iou can be withdrawn through bitstamp

^^ PLEASE correct me if i am wrong

So are you saying that Ripple network labels the IOUs? If say you send me 1 Btc, that you withdrew from Bitstamp, in exchange for whatever (XRP, USD)  will I be able to deposit that Bitstam IOU Btc to my Bitstamp account? 

Here's an example:

I use the blockchain to send 1 BTC to my Bitstamp deposit address, then use the Ripple withdraw function. My Ripple account is now holding a 1 BTC Bitstamp IOU.

Suppose you trust Bitstamp for at least 1 BTC. If I choose to send 1 BTC to your Ripple account, the network will detect the chain of trust Me -> Bitstamp -> You. It will lower my balance with Bitstamp by 1 BTC and increase your balance with Bitstamp by 1 BTC, so now I am owed nothing by Bitstamp and you are owed 1 BTC. I have transferred my Bitstamp IOU to you.

You now look up your Bitstamp Ripple deposit address, and send it 1 BTC. Because the network forces an issuer to accept its IOUs at face value, it sees that it can send Bitstamp 1 BTC by lowering your balance with them by 1 BTC. You can now withdraw 1 BTC from Bitstamp to your Bitcoin address – you have redeemed that IOU for an actual bitcoin. At the end of the day, you have 1 "actual" BTC more than you started with and I have 1 "actual" BTC less.

Thank you, that is what I wanted to make clear in my mind. Now, if you send me an 1 Btc Bitstamp IOU I need to have trust extended to Bitstamp for at least 1 Btc first, in order to be able to receive that 1 Btc IOU from you, otherwise the transaction will not go through, right?

[Peter Lambert]

I am still trying to wrap my head around how to use this in conjunction with bitcons.

Lets say, for example, from a previous business dealing I owe 100 btc to Mr T. I plan to pay him at some point in the future, could we use ripple to our advantage? What I am thinking is by using Ripple he could trade that amount I owe him before I actually pay it. But I am stuck trying to figure out who trust who in ripple? Would I trust him 100 btc in ripple, and then lower my trust amount as I pay him back, or would he trust me 100 btc, then I send him 100 PeterLambert BTC IOU, which he then sends back when I give him actual btc?

[moocowpong1]

Thank you, that is what I wanted to make clear in my mind. Now, if you send me an 1 Btc Bitstamp IOU I need to have trust extended to Bitstamp for at least 1 Btc first, in order to be able to receive that 1 Btc IOU from you, otherwise the transaction will not go through, right?

Yep. If you don't trust anybody's BTC IOU's, I can't send you BTC. The client will say "No path found!"

On the other hand, if you only trusted, say, WeEx BTC IOU's, I could still probably send you BTC even if I only had Bitstamp IOU's. I'd say I want to send you 1 BTC, and the network would find a third party (call her Carol) who held both WeEx and Bitstamp BTC IOU's. The network would send Carol my Bitstamp IOU's, and send you Carol's WeEx IOU's. I'd have to send her a little extra (Bitstamp) BTC as a transit fee for the service. All I would see of this was an "effective exchange rate": the client would tell me how much I'd have to pay to send 1 BTC, I'd hit send, and you'd have your WeEx IOU's.

Edit: The chain of trust here is Me -> Bitstamp -> Carol -> WeExchange -> You

[wyodude]

Thank you, that is what I wanted to make clear in my mind. Now, if you send me an 1 Btc Bitstamp IOU I need to have trust extended to Bitstamp for at least 1 Btc first, in order to be able to receive that 1 Btc IOU from you, otherwise the transaction will not go through, right?

Yep. If you don't trust anybody's BTC IOU's, I can't send you BTC. The client will say "No path found!"

On the other hand, if you only trusted, say, WeEx BTC IOU's, I could still probably send you BTC even if I only had Bitstamp IOU's. I'd say I want to send you 1 BTC, and the network would find a third party (call her Carol) who held both WeEx and Bitstamp BTC IOU's. The network would send Carol my Bitstamp IOU's, and send you Carol's WeEx IOU's. I'd have to send her a little extra (Bitstamp) BTC as a transit fee for the service. All I would see of this was an "effective exchange rate": the client would tell me how much I'd have to pay to send 1 BTC, I'd hit send, and you'd have your WeEx IOU's.

Edit: The chain of trust here is Me -> Bitstamp -> Carol -> WeExchange -> You

Thanks, that how I thought it works, just wanted to clarify.

[suppp]

It's necessary to give trust to bitstamp to sell Ripple? Or not?

Please help me to understand. I give trust 0.5 BTC to bitstamp.
Then I made offer and someone bought from me 10000 XRP, I got 0.2 BTC

And that's what I see in "Trust" menu now:


What does green line and number 0.2 mean?

[Snowfire]

My wallet has two balances: the IOU balance (denominated in external units) and the Ripple balance (denominated in XRP.) Although I understand that the XRP function as a kind of internal bookkeeping device for the system,  they appear not to be convertible to anything else, nor can you acquire them with external funds. So aside from granting me the authority to extend trust (at >300XRP) what do these entities do in my possession? Do I miss something here?

[moocowpong1]

What does green line and number 0.2 mean?

That's a visual depiction of your balance with Bitstamp. The fact that it goes from 0 to 0.5 means that Bitstamp can owe you anywhere from 0 to 0.5 BTC, becuase that's how much you trust them with. (If Bitstamp also trusted you, the left end would be negative, because you could be in debt to Bitstamp.) The green line shows how much of that trust they're using. As you receive Bitstamp BTC IOU's, the bar will fill up; as you spend them, it will empty. When it's full, that line of credit is maxed out, and you won't be able to receive any more Bitstamp BTC until you increase the trust limit or spend some you already have.

[suppp]

That's a visual depiction of your balance with Bitstamp. The fact that it goes from 0 to 0.5 means that Bitstamp can owe you anywhere from 0 to 0.5 BTC, becuase that's how much you trust them with. (If Bitstamp also trusted you, the left end would be negative, because you could be in debt to Bitstamp.) The green line shows how much of that trust they're using. As you receive Bitstamp BTC IOU's, the bar will fill up; as you spend them, it will empty. When it's full, that line of credit is maxed out, and you won't be able to receive any more Bitstamp BTC until you increase the trust limit or spend some you already have.

Thank you. I have a few questions now:

1. To sell some Ripples I need to give trust to bitstamp at first ?
2. How to withdraw my 0.2 BTC to my wallet ?

[wyodude]

That's a visual depiction of your balance with Bitstamp. The fact that it goes from 0 to 0.5 means that Bitstamp can owe you anywhere from 0 to 0.5 BTC, becuase that's how much you trust them with. (If Bitstamp also trusted you, the left end would be negative, because you could be in debt to Bitstamp.) The green line shows how much of that trust they're using. As you receive Bitstamp BTC IOU's, the bar will fill up; as you spend them, it will empty. When it's full, that line of credit is maxed out, and you won't be able to receive any more Bitstamp BTC until you increase the trust limit or spend some you already have.

Thank you. I have a few questions now:

1. To sell some Ripples I need to give trust to bitstamp at first ?
2. How to withdraw my 0.2 BTC to my wallet ?

You'll have to deposit IOU Btc back to Bitstamp using their Ripple deposit and then transfer the Btc to your wallet.

[JoelKatz]

1. To sell some Ripples I need to give trust to bitstamp at first ?

If you're going to sell them for bitstamp/BTC, I'd suggest you open an account at Bitstamp and extend trust to them. Otherwise, you can't withdraw them.

2. How to withdraw my 0.2 BTC to my wallet ?

Once you have bitstamp/BTC in Ripple, you would select Ripple deposit from Bitstamp's web site. (Because you are depositing bitcoins into your Bitstamp account.) Once you have the balance off the Ripple network and in your Bitstamp account, you can withdraw it from your Bitstamp account as actual Bitcoins.

So the steps are:

1) Have bitstamp/BTC on the Ripple network.

2) Use Bistamp's web site to deposit these into your Bitstamp account.

3) Withdraw these BTC from your Bitstamp account into a Bitcoin account.

[suppp]

2) Use Bistamp's web site to deposit these into your Bitstamp account.

Thank you for the helpful answer
Unfortunately, I see message "Ripple is currently disabled. Please try later." on bitstamp site
Need to wait...

[Peter Lambert]

I've extended 1 USD of trust to everyone I listed previously.

thoughtcourier     rn7iD6DpnCwH8kjJDCsENibMXkgmJkRCRz                          <-- this is me

what now?

I'd feel equally comfortable trusting strangers on the internet with small amounts as one internet company with a large amount.

My main interest in Ripple is transferring Bitcoin over it and seeing if there's a way to implement P2P lending club over it.

Just to try things out, I sent you a tiny amount of USD, even though I have no USD balance. I now have a tiny negative USD balance. I think the only place you could send that would be to Tino Y, as he is the only other person who trusts me so far, or back to me.

When you send some USD or BTC, do you get to choose who's debt is sent, or does the program pick for you? What happens if you remove the trust you have extended to me? (maybe you could try that?) If you did remove the trust from me, would my IOU's be preferentially sent to people who have multiple choices? (Like if Tino trusts me and BitStamp, and you have USD from me and BitStamp, which USD gets sent?)

[JoelKatz]

When you send some USD or BTC, do you get to choose who's debt is sent, or does the program pick for you?

The client asks the server what's possible, the client chooses a source currency and a subset of those lines to use, and then the transaction itself uses whichever lines from that subset cost the least. Currently, the client just does what the server suggests.

What happens if you remove the trust you have extended to me? (maybe you could try that?) If you did remove the trust from me, would my IOU's be preferentially sent to people who have multiple choices? (Like if Tino trusts me and BitStamp, and you have USD from me and BitStamp, which USD gets sent?)

That's correct. That indicates that you don't want those IOUs anymore. You can't acquire any more of them (unless you buy them through an offer) and that signals to people that you want to get rid of them.

[markm]

I am still trying to wrap my head around how to use this in conjunction with bitcons.

Lets say, for example, from a previous business dealing I owe 100 btc to Mr T. I plan to pay him at some point in the future, could we use ripple to our advantage? What I am thinking is by using Ripple he could trade that amount I owe him before I actually pay it. But I am stuck trying to figure out who trust who in ripple? Would I trust him 100 btc in ripple, and then lower my trust amount as I pay him back, or would he trust me 100 btc, then I send him 100 PeterLambert BTC IOU, which he then sends back when I give him actual btc?

He would trust you for the coins, but him doing that as a note to himself that you owe him coins would not be shown in Ripple as you actually owing him the coins, so one cannot really do a unilateral entry into RIpple of the fact of an existing debt. You would have to actually send him the IOUs in order for Ripple to "understand", and thus show nicely for him in his client, the (now actually acknowledged by you) fact that not only do you owe him bitcoin but that you do so with his consent. (It wouldn't have let you send him the IOUs without his "consent" in the form of the trust amount he extended to you.)

I guess this kind of means RIpple does not really do "invoices" yet.

Which is good, as that could need, in order for consent to be preserved, to be linked to a preceding purchase order, and on into gosh knows what more esoteric accounting stuff. (Did your nanny authorise you to send out the purchase order, who gave her authority to do that, etc... the kinds of things Open Transactions groups ideas are heading toward seemingly.)

-MarkM-

[thoughtcourier]

I've extended 1 USD of trust to everyone I listed previously.

thoughtcourier     rn7iD6DpnCwH8kjJDCsENibMXkgmJkRCRz                          <-- this is me

what now?

I'd feel equally comfortable trusting strangers on the internet with small amounts as one internet company with a large amount.

My main interest in Ripple is transferring Bitcoin over it and seeing if there's a way to implement P2P lending club over it.

Just to try things out, I sent you a tiny amount of USD, even though I have no USD balance. I now have a tiny negative USD balance. I think the only place you could send that would be to Tino Y, as he is the only other person who trusts me so far, or back to me.

When you send some USD or BTC, do you get to choose who's debt is sent, or does the program pick for you? What happens if you remove the trust you have extended to me? (maybe you could try that?) If you did remove the trust from me, would my IOU's be preferentially sent to people who have multiple choices? (Like if Tino trusts me and BitStamp, and you have USD from me and BitStamp, which USD gets sent?)

I tried to send the USD on to Timo Y (rG8VFQPaJB2gNjx29Et1wKUJettQP1eLmk) but it says

No path found!


Also, did you trust me with .01 BTC? I see a -0.01 for BTC by your name.

[Peter Lambert]

Just to try things out, I sent you a tiny amount of USD, even though I have no USD balance. I now have a tiny negative USD balance. I think the only place you could send that would be to Tino Y, as he is the only other person who trusts me so far, or back to me.

When you send some USD or BTC, do you get to choose who's debt is sent, or does the program pick for you? What happens if you remove the trust you have extended to me? (maybe you could try that?) If you did remove the trust from me, would my IOU's be preferentially sent to people who have multiple choices? (Like if Tino trusts me and BitStamp, and you have USD from me and BitStamp, which USD gets sent?)

I tried to send the USD on to Timo Y (rG8VFQPaJB2gNjx29Et1wKUJettQP1eLmk) but it says

No path found!


Also, did you trust me with .01 BTC? I see a -0.01 for BTC by your name.

Yes, I trusted you .01BTC, so the trust axis in BTC goes from -.01 to 0 on your page.

Aha, I see the problem! Timo has trusted me a small amount of BTC, so the USD from me which you have cannot be sent to him.

[PRab]

Anyone willing to send me 300 ripples? I'll return them if you wish. I'm just looking to play with the system and see what it can do.

[thoughtcourier]

Anyone willing to send me 300 ripples? I'll return them if you wish. I'm just looking to play with the system and see what it can do.

need your address