Ripple: Use FRC instead of XRP?

[markm]

Shorting Freicoin.

-MarkM-

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[galambo]

Why doesn't Ripple use Freicoin instead of XRP?

There's really no reason for Ripple to make its own cryptocurrency for spam protection. After all, the Ripple protocol is a service other currencies can be loaned through. So, why not use an already existing cryptocurrency instead and focus their efforts on making web services, which the OpenCoin team looks well positioned to do?

Bitcoin is an obvious option, but its economic definition is for goldbugs who are outside of Ripple's best markets.

I think Freicoin would be an ideal choice for paying for Ripple transactions, due to the demurrage. Demurrage currency is much better at representing debts in terms normal people understand. The average person doesn't really think about time-value of money. They just know they need money and seek it from lenders. Often times they involve themselves in disadvantaged transactions because time-value of money is complicated.

Freicoin makes the time-value of money easy to understand by hiding the time value of money with demurrage. This way people can know they are getting a good deal if they borrow 100$ and have to pay back 100$ to the loan company. The combination of Ripple loans and Freicoin are a great match. Why not do this instead?

[misterbigg]

Why doesn't Ripple use Freicoin instead of XRP?

Because Freicoin is not an integral part of the Ripple protocol. Whatever currency they use to discourage spam (assuming that such a solution is the only possible way), has to be built into the Ripple protocol. One could just as easily ask, why they didn't use Bitcoin.

[galambo]

Why doesn't Ripple use Freicoin instead of XRP?

Because Freicoin is not an integral part of the Ripple protocol. Whatever currency they use to discourage spam (assuming that such a solution is the only possible way), has to be built into the Ripple protocol. One could just as easily ask, why they didn't use Bitcoin.

I don't really see why it needs to be a new currency. I'm sure they could have come up with a way to use bitcoin for this if they wanted to. Anyways, I just thought I would suggest it in case OpenCoin were listening.

[moocowpong1]

Why doesn't Ripple use Freicoin instead of XRP?

Because Freicoin is not an integral part of the Ripple protocol. Whatever currency they use to discourage spam (assuming that such a solution is the only possible way), has to be built into the Ripple protocol. One could just as easily ask, why they didn't use Bitcoin.

I don't really see why it needs to be a new currency. I'm sure they could have come up with a way to use bitcoin for this if they wanted to. Anyways, I just thought I would suggest it in case OpenCoin were listening.

How could you use Bitcoin for it? You can't use BTC IOU's, because there's no entity which could serve as an issuer. And bitcoins are in the blockchain, not the Ripple ledger... you might as well suggest paying the transaction fees in gold. If you think it can be done, I'm genuinely curious what you have in mind.

[galambo]

How could you use Bitcoin for it? You can't use BTC IOU's, because there's no entity which could serve as an issuer. And bitcoins are in the blockchain, not the Ripple ledger... you might as well suggest paying the transaction fees in gold. If you think it can be done, I'm genuinely curious what you have in mind.

There are ways you can insert data into the block chain, or colored coins, or what p2pool does. I'm not an expert on this sort of thing but I know its been done before. I'm sure if OpenCoin wanted to they could figure it out.

[misterbigg]

I'm sure if OpenCoin wanted to they could figure it out.

Think about what you're saying. If Ripple transactions required Bitcoin, then you'd have to wait for at least one confirmation from the Bitcoin network before you could consider a Ripple transaction complete. Furthermore, if the chain containing the Bitcoin part of the Ripple transaction got orphaned, the Ripple transaction would be rolled back. This is completely incompatible with Ripple's ledger system.

This is what happens when people with no technical ability try to pontificate.

[galambo]

Think about what you're saying. If Ripple transactions required Bitcoin, then you'd have to wait for at least one confirmation from the Bitcoin network before you could consider a Ripple transaction complete. Furthermore, if the chain containing the Bitcoin part of the Ripple transaction got orphaned, the Ripple transaction would be rolled back. This is completely incompatible with Ripple's ledger system.

This is what happens when people with no technical ability try to pontificate.

The point of XRP is spam prevention. Even if the chain gets orphaned the task at hand, spam prevention, is still accomplished. And of course the actual data would not be contained in the bitcoin blockchain, just some hash or some similar system. Its really not that hard to think of a way this could work. IIRC the clients still store orphaned chains in the blk0001.dat anyways.

[JoelKatz]

There are ways you can insert data into the block chain, or colored coins, or what p2pool does. I'm not an expert on this sort of thing but I know its been done before. I'm sure if OpenCoin wanted to they could figure it out.

As was discussed in several of the other Ripple threads, none of those approaches actually work. But even if they did, they would still be inferior solutions because they wouldn't allow anyone to give away enough to allow a large number of people to perform millions of transactions. That would drastically decrease the chances Ripple would ever be a viable payment platform.

[galambo]

As was discussed in several of the other Ripple threads, none of those approaches actually work. But even if they did, they would still be inferior solutions because they wouldn't allow Opencoin to make Ripple free to as many people as possible for as long as possible which would drastically decrease the chances Ripple would ever be a viable payment platform.

Hmmm, well you could also offer another cryptocurrency which is also making itself free to as many people as possible for as long as possible as fairly as possible.

[jtimon]

The problem with the idea is that people use BTC to save/hold cash and FRC to do transactions is that if all my savings are in BTC why on earth would I want to convert to FRC before spending them?

We're assuming merchants will accept both and spend FRC first (without converting them). That could result in more value being transferred through frc than through btc. We don't care how much value is being stored in btc compared to frc because frc is not designed to be a store of value: only a medium of excange.
I don't think either btc or frc will ever be good as medium of account (not that it is really necessary for anything), but freicoin will probably be better for that too.

And of course, investors will prefer to borrow frc over borrowing btc as they will be able to find better rates as frc has demurrage and it's not deflationary.
That's the whole point, that investment doesn't stops in "deflationary times" if we can really have that with a free monetary market (historically those monetary cycles occurred under a gold [monopoly] standard).

Think about what you're saying. If Ripple transactions required Bitcoin, then you'd have to wait for at least one confirmation from the Bitcoin network before you could consider a Ripple transaction complete. Furthermore, if the chain containing the Bitcoin part of the Ripple transaction got orphaned, the Ripple transaction would be rolled back. This is completely incompatible with Ripple's ledger system.

This is what happens when people with no technical ability try to pontificate.

The point of XRP is spam prevention. Even if the chain gets orphaned the task at hand, spam prevention, is still accomplished. And of course the actual data would not be contained in the bitcoin blockchain, just some hash or some similar system. Its really not that hard to think of a way this could work. IIRC the clients still store orphaned chains in the blk0001.dat anyways.

I think it's feasible but technically very complex. Besides you lose ledger consensus's improved latency and you become liable to PoW security model in addition of ledger's consensus security model.
I prefer to have two different security models operating in parallel: that makes the crypto-assets community as a whole much more resilient.

[Bicknellski]

I really don't see how the BTC is going to be a reliable currency in terms of using it to buy anything given how volatile it is and will likely trend upwards and then correct before heading upwards again.

You're under the influence of the money illusion.

Illusion. I am on this planet for 90 years if I am lucky buddy. It is all an illusion. That $300,000 pizza sure is an illusion.

  

This is false, as modern fiat currencies have no intrinsic value and their real value is derived from their ability to be exchanged for goods (purchasing power) and used for payment of taxes.

Since when is BTC a fiat currency?

[jtimon]

 

This is false, as modern fiat currencies have no intrinsic value and their real value is derived from their ability to be exchanged for goods (purchasing power) and used for payment of taxes.

Since when is BTC a fiat currency?

There's no such thing as intrinsic value, you don't have to read Gesell to know that. The founder of the austrian school was already aware of this.

All monies (symbols of value that serve as medium of exchange) get their value from their ability to be exchanged for real products.

Do you think gold would be at its current price if it wasn't money? If it only relied in its industrial value?
Then, please, explain me its price in relation to silver.
Both have similar industrial uses (maybe even silver has more) and gold has an enormously bigger supply...