ripple: let's test it!

[bradyon]

Great, I trust mogly for 10€. If somebody trusts me, we´ll make it grow!

bradyon

rKWBD5PwiwgVYQMthHC4mgNy73Pc2xhUZH

[1714041523]

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[Ente]

Why doesen't ripple contain contracts on interest rates etc. So I trust XXX for 1 BTC at 5% interest.

Yes, I agree on that.
Being able to set interest rates is necessary, in my opinion.
At the moment, with "input = output", I prefer to have a high line of credit, but try to trust others as little as possible.
Why? Having credit is like "free money", but having IOUs from others is a hassle. It reduces my liquidity or even forces me to leave the couch to get some physical cash back.
It's even more visible once there is a lot of "traffic" in ripple with many, long chains of trust. Then I transfer IOUs and money all the time, without being directly involved, like being a clearing point for my other contacts. Then it will really start to be a hassle, with no direct benefit for me.

If I can set, for example, a 0.1% fee for clearing my contact's transactions, and set x% per y days for lending, aka buying IOUs, I have an incentive for both clearing and buying IOUs.
This will get a lot of people on Ripple, this will get a lot of liquidity, short and reliable chains, this will bring publicity.

Of course I am totally ignoring the whole XRP discussion here.

Ente

[moocowpong1]

Why doesen't ripple contain contracts on interest rates etc. So I trust XXX for 1 BTC at 5% interest.

Yes, I agree on that.
Being able to set interest rates is necessary, in my opinion.
At the moment, with "input = output", I prefer to have a high line of credit, but try to trust others as little as possible.
Why? Having credit is like "free money", but having IOUs from others is a hassle. It reduces my liquidity or even forces me to leave the couch to get some physical cash back.
It's even more visible once there is a lot of "traffic" in ripple with many, long chains of trust. Then I transfer IOUs and money all the time, without being directly involved, like being a clearing point for my other contacts. Then it will really start to be a hassle, with no direct benefit for me.

If I can set, for example, a 0.1% fee for clearing my contact's transactions, and set x% per y days for lending, aka buying IOUs, I have an incentive for both clearing and buying IOUs.
This will get a lot of people on Ripple, this will get a lot of liquidity, short and reliable chains, this will bring publicity.

Of course I am totally ignoring the whole XRP discussion here.

Ente

The current client doesn't have an interface for it, but the system allows you to set transit fees and to accept IOU's at less than face value. You can have a spread between how much you value incoming and outgoing IOU's, so you make a small profit for handling them.

Edit: See here: https://ripple.com/wiki/Transit_Fees

[JoelKatz]

If I can set, for example, a 0.1% fee for clearing my contact's transactions, and set x% per y days for lending, aka buying IOUs, I have an incentive for both clearing and buying IOUs.

You can set a fee for the transfer of your IOUs from one person to another. You can set a premium when you take someone else's IOUs. Charging interest breaks this model though, so we can't support it inside the normal flow of payments. You can, however, achieve the same thing with an issue premium (or a "quality in" in Ripple terms).

See this thread for details on why interest doesn't work:
https://ripple.com/forum/viewtopic.php?f=1&t=1224

The simple reason interest breaks this model: It makes it impossible to compare the value of payment paths. For example, say you get $10 at a gateway but in exchange you lose a $9 debt at 12% interest. Is that a good deal? Well, you can't say unless you know how long that debt would have continued to pay interest.

If you do know how long the debt will pay interest, there's no need for interest at all if you can charge an issue premium. There's a one-to-one correspondence between "$X at Y% interest paid in Z months" and "$A paid in Z months at no interest".

Also, because IOUs are powerful in Ripple, it's not clear who should charge who interest. As an intermediary, you exchange one IOU for another. Presumably you consider these IOUs equal in value (or you are getting a more valuable IOU for a less valuable IOU) otherwise you wouldn't make the deal. So why should anyone pay you interest after an even exchange?

[nexus6]

So anyone want to post his contact info here so I can add some people to my contacts?

I'm rpH3zuMch2GrrYX724xGWwbMGwiQ5RbSAU

I'd like to try this thing, it really looks great. I trusted you for 0.2BTC

My addres is:
rEiNY9Rf25S79UZuEnskTVoV2NidFdCCFu

Thanks

[Ente]

If I can set, for example, a 0.1% fee for clearing my contact's transactions, and set x% per y days for lending, aka buying IOUs, I have an incentive for both clearing and buying IOUs.

You can set a fee for the transfer of your IOUs from one person to another. You can set a premium when you take someone else's IOUs. Charging interest breaks this model though, so we can't support it inside the normal flow of payments. You can, however, achieve the same thing with an issue premium (or a "quality in" in Ripple terms).

See this thread for details on why interest doesn't work:
https://ripple.com/forum/viewtopic.php?f=1&t=1224

The simple reason interest breaks this model: It makes it impossible to compare the value of payment paths. For example, say you get $10 at a gateway but in exchange you lose a $9 debt at 12% interest. Is that a good deal? Well, you can't say unless you know how long that debt would have continued to pay interest.

If you do know how long the debt will pay interest, there's no need for interest at all if you can charge an issue premium. There's a one-to-one correspondence between "$X at Y% interest paid in Z months" and "$A paid in Z months at no interest".

Also, because IOUs are powerful in Ripple, it's not clear who should charge who interest. As an intermediary, you exchange one IOU for another. Presumably you consider these IOUs equal in value (or you are getting a more valuable IOU for a less valuable IOU) otherwise you wouldn't make the deal. So why should anyone pay you interest after an even exchange?

Thank you for the input.
This whole beast sure is complicated, once you start diggin' and playin' :-)
Compared to that, Bitcoin is simple and straight-forward. Lets see who the first person is to explain ripple to their mom - I'll try once I understand it fully ;-)

Ente

[w1R903]

If I can set, for example, a 0.1% fee for clearing my contact's transactions, and set x% per y days for lending, aka buying IOUs, I have an incentive for both clearing and buying IOUs.

You can set a fee for the transfer of your IOUs from one person to another. You can set a premium when you take someone else's IOUs. Charging interest breaks this model though, so we can't support it inside the normal flow of payments. You can, however, achieve the same thing with an issue premium (or a "quality in" in Ripple terms).

See this thread for details on why interest doesn't work:
https://ripple.com/forum/viewtopic.php?f=1&t=1224

The simple reason interest breaks this model: It makes it impossible to compare the value of payment paths. For example, say you get $10 at a gateway but in exchange you lose a $9 debt at 12% interest. Is that a good deal? Well, you can't say unless you know how long that debt would have continued to pay interest.

If you do know how long the debt will pay interest, there's no need for interest at all if you can charge an issue premium. There's a one-to-one correspondence between "$X at Y% interest paid in Z months" and "$A paid in Z months at no interest".

Also, because IOUs are powerful in Ripple, it's not clear who should charge who interest. As an intermediary, you exchange one IOU for another. Presumably you consider these IOUs equal in value (or you are getting a more valuable IOU for a less valuable IOU) otherwise you wouldn't make the deal. So why should anyone pay you interest after an even exchange?

Thank you for the input.
This whole beast sure is complicated, once you start diggin' and playin' :-)
Compared to that, Bitcoin is simple and straight-forward. Lets see who the first person is to explain ripple to their mom - I'll try once I understand it fully ;-)

Ente

It took me a few days of almost full-time thinking about Ripple to really understand the implications, and another few days to really appreciate OpenCoin's implementation.  They've pulled together all the best ideas in cryptocurrency (original ripple, opencoin, etc.) and synthesized them into the new Ripple.  The only way to fully appreciate the beauty of ripple.com is to open an account, clicking on the advanced tab, and also read TTBit's thread about his DYM currency in Ripple. I haven't been this excited about anything since I first learned about Bitcoin back in late 2010.  Except this time, I'm going to hang on to more than just a few coins.

The mistake a lot of people are making is assuming Ripple XRP is just another electronic currency like btc, when it's more like a credit to use their system combined with a stock (and notice how careful the principals are to avoid predicting any future performance).  Ripple is a vastly different project than some pre-mined block chain knockoff.  That's not to say that XRP won't gain massive value.  In fact, all the same forward-thinking people who racked up Bitcoins in the beginning are going to do the same with Ripple.

Aside from the brilliant ideas in Ripple, I think the team has the technical chops to pull this off.  The only two doubts I have now are:

1) Legal.  Since there is a for-profit company to target, who knows what kind of legal grief they'll run in to.
2) Customer service/public relations.  They seem a little weak here.  They need to hire a full-time developer relations person, and really stress public relations and customer service among all their staff.  David is going a great job of representing the company in public, but he seems to be the only one trying.  They may all just be too busy right now, but I hope they realize that customer service and public relations, particularly among devs and early adopters, will make or break this project.  We'll see.

[JoelKatz]

2) Customer service/public relations.  They seem a little weak here.  They need to hire a full-time developer relations person, and really stress public relations and customer service among all their staff.  David is going a great job of representing the company in public, but he seems to be the only one trying.  They may all just be too busy right now, but I hope they realize that customer service and public relations, particularly among devs and early adopters, will make or break this project.  We'll see.

Thanks. Expect to see much more from us in this area. We haven't specifically tried to approach anyone but the Bitcoin community yet but we will.

[w1R903]

2) Customer service/public relations.  They seem a little weak here.  They need to hire a full-time developer relations person, and really stress public relations and customer service among all their staff.  David is going a great job of representing the company in public, but he seems to be the only one trying.  They may all just be too busy right now, but I hope they realize that customer service and public relations, particularly among devs and early adopters, will make or break this project.  We'll see.

Thanks. Expect to see much more from us in this area. We haven't specifically tried to approach anyone but the Bitcoin community yet but we will.

Glad to hear it.  I'm pulling for you all -- if Ripple succeeds, it should make moving money from fiat into cryptocurrencies vastly more simple.  I'm looking forward to see how this develops.

[Un zafado cualquiera]

hi ripple testers:

I want to try this and i created a ripple account...

someone already made a circle to test if your own IOUs can pay for their value?


this is my address: r9JJ28tGZ9p83Ngqu4tWTCWYUSxU6FeRQC

[beeteecee]

Hey guys,

I created a new Ripple account. My address is rzrQieowSLiDwjYDsXRKayPbb8uGzkV1D

Would be glad to test it out.

[Tesion]

rw75ru8M6oPCZrC7gDW8MuevqPrLxu8Xtn
I uh, have no idea. I created an account now what? I can enter other accounts as contacts? What happens if I add random people as contacts? oO

Edit: Uh ok, can´t add people need those rpx? How do i get them? Except trying this forum game thingy?

[Peter Lambert]

rw75ru8M6oPCZrC7gDW8MuevqPrLxu8Xtn
I uh, have no idea. I created an account now what? I can enter other accounts as contacts? What happens if I add random people as contacts? oO

Edit: Uh ok, can´t add people need those rpx? How do i get them? Except trying this forum game thingy?

It does seem strange you can't start using ripple for anything until you get some xrp, but you can't even buy the xrp until you have an active account. There was the free xrp giveaway thread for people with bicointalk accounts created before the giveaway started.

The other thing you could do is have somebody lend you some xrp as a started loan. I have done this for at least one person in the past: I send you 300 xrp (that is enough to get started), after which you can buy some xrp by depositing btc through one of the gateways and using the ripple exchange, then send me back the xrp I lent you (plus whatever amount of interest).

Or you could directly buy some xrp from somebody on the forum, you send them btc and they send xrp to your ripple account. So if you send me 5 mBTC, I will send you 500 XRP so you can start using your ripple account.

[chriswen]

So, the wiki says you can set fees but how do you do that?

Also, XRP isn't meant to be an investment.  There are limits in place to stop spammers.

The thing is they have a big reserve value of XRP.  It's like a pre mined coin.  And it doesn't necessarily need to have value.  You could trade stuff without XRP.  XRP is something to stop people from spamming and for tx fees.

[shinkicker]

I would like to try this, but my account was a few days under the date needed to recieve free XRP to start you off. To late to the party, again 

[Peter Lambert]

I would like to try this, but my account was a few days under the date needed to recieve free XRP to start you off. To late to the party, again 

As I pointed out a few posts up, you could get enough XRP to try it out for just a few mBTC. You only need a few hundred XRP to get started, and they are going for something on the order of 100 XRP per mBTC.

[Un zafado cualquiera]

 can someone explain briefly how to fund the client with Bitcoins? 

[slothbag]

Can someone explain how Ripple and the consensus approach would handle a fork (majority POW for bitcoin vs majority validators for ripple) like bitcoin experienced earlier this month?

One of the huge selling points of bitcoin is no double spends, once a transaction is confirmed there are no rollbacks.. quite clearly that was not the case earlier this month, could Ripple experience the same sort of problem?

I guess there is no way to avoid a splitting of versions of truth depending on what groups of users want.. thinking out loud, the trick is to be alerted to the fact that there is another fork out there and is it the one you want to be on..

[JoelKatz]

Can someone explain how Ripple and the consensus approach would handle a fork (majority POW for bitcoin vs majority validators for ripple) like bitcoin experienced earlier this month?

Your node tries to obtain a consensus with everyone you asked it to obtain a consensus with. If it can't, then it fails, and it knows it fails. So essentially, the same thing that happened with Bitcoin would happen except for two things:

1) Everyone would immediately know that the network was split because they wouldn't see the validations and consensus they expect. There would be no need to warn people to stop processing transactions.

2) If one chain was invalid, people could manually opt to drop validators that select the invalid chain. There would be no need to persuade 50% of the hashing power to move. However, this wouldn't help much if both chains were equally valid. (Without someone to make a decision, I could see some people moving from .7 to .8 and some moving from .8 to .7, not helping much until a community decision was made. That would be less of a problem if one chain had clearly invalid transactions in it. People would independently choose to leave the invalid chain.)

One of the huge selling points of bitcoin is no double spends, once a transaction is confirmed there are no rollbacks.. quite clearly that was not the case earlier this month, could Ripple experience the same sort of problem?

Like Bitcoin, it is designed to resist them. Like Bitcoin, bugs can cause systems to do things they were designed not to do. For this specific type of failure though, I believe Ripple's architecture is better able to resist it.

That said, I believe this type of resistance could be added to Bitcoin without too much difficulty. First, if you see blocks are being found way too slowly, stop processing transactions. (There's a risk that the hashing power has gone to another chain, maybe one you're partitioned from due to network issue.) Second, if you see several nodes, particularly nodes close to mining pools are on a different blockchain than you are, stop processing transactions. (Because that other chain might be better than yours for some reason your program can't see.)

I guess there is no way to avoid a splitting of versions of truth depending on what groups of users want.. thinking out loud, the trick is to be alerted to the fact that there is another fork out there and is it the one you want to be on..

Exactly. This is easier to do in Ripple than in Bitcoin because you see trusted validators validating a different ledger whereas in Bitcoin you can only be aware of a drop in hash rate later by statistical sampling. But it's not hard to add to Bitcoin.

Mining pools could even periodically broadcast a time-stamped signed hash of the tip of the blockchain just as Ripple validators do. Your node could then know if it was on the same block as each mining pool automatically. No central authority or manual intervention is needed -- pools and miners could include their signing key or its hash in blocks that they mine. So you'll know roughly what percent of the mining power each key represents.

Ripple currently has a problem where a few times a day, this logic trips and the Ripple network (more accurately, some client-handling servers) stops processing transactions. Part of it is due to the fact that the number of validators is so small that it's hard to tell if a validator just stopped processing or whether you're split from it. Fortunately, it only takes 20 seconds or so for a new consensus round to start and it all to sort out.

I believe Ripple would be more resistant to this problem with more validators, but testing in edge cases helps us to make sure the algorithm is robust and reliable. We'd prefer to not process a transaction for a few seconds than claim we had processed one when we didn't, of course. But the issue is more with ensuring we know the current state of the network for things like reporting validated transactions to others. Where, again, a 20 second delay is better than an incorrect report of confirmation.

[moocowpong1]

JoelKatz:

In Bitcoin, because you can verify the validity of the entire blockchain and a valid transaction contains proof that the sender authorized it, you can in principle trace your coins back to their origin and have a proof of authorization for each step along the way. This means that if your coins ever end up disappearing, it must be because either a) they were double-spent at some point, and the current longest chain includes the other transaction or b) the block they originated in isn't part of the longest chain. This also means there's no way to end up controlling coins that you didn't control before except by receiving them or by mining a block, which puts limitations on the kinds of attacks possible. (An attacker must legitimately control coins in order to double spend them, for example – they can't just print money.)

In Ripple I understand that validators only needs the most recent ledger, meaning there isn't any guarantee that such a chain of proof exists. Are there any attacks that have the rough form

... -> valid ledger -> valid ledger -> -> superficially valid ledger with incorrect balances -> ...

That is, is there some event like a massive power outage or a network split or colluding validators which somebody could exploit to update balances in their favor? Perhaps it might go like this: a power outage makes it so that a colluding set of validators is temporarily the majority, and they propose a ledger with malicious changes. Several ledger closes go by before the rest of the validators are up again, and when they look at the network they see that the current ledger includes the malicious changes. Because no record of a transaction needs to exist for a balance to be considered valid, there's no way to prove that the new balances are illegitimate, and the malicious ledger looks valid.

Am I understanding things correctly? What conditions could this happen under? What sort of resources would an attacker need to make this happen? Are there any limitations on what could be done in this type of attack? How could the community recognize and react to such an attack?