Ripple: XRP Price Speculation

[Meizirkki]

This thread has shown that 74% of voters believe Bitcoin to be the better investment as of today. Therefore your statement is false.
What has no purpose is your statement that "this thread has no purpose."

ok

[CoinHoarder]

XRPs are just the newest fad of the week...

Ripples entrance to the ALT coin community is similar to NVC giving BTC-e 100,000 NVC to get them to put NVC on their exchange. Ripple gave away 50 BILLION XRPs to end users to get them to start using Ripple. Seems a little fishy to me.

They pre-mined 100 billion XRPs, I can't believe anyone actually thinks they will be that valuable. Even though they are giving 50 billion away, it is still a pre-mine, it's just the coins are in more people's hands than a normal pre-mine.

[Beepbop]

They haven't finished giving away the free XRP yet. Also there's no pre-mine if there's no requirement for miners.

Realize that to every new user of a cryptocurrency, after the first guy, it appears to be a pre-mine. If my uncle or work colleague or whatever heard about Bitcoin and that you have to buy these from some people that ran their computers at high load to "mine" for "nonces", doing no work that will benefit my uncle in the future besides making the blockchain billions of times more secure than it needs to be, he'll consider Bitcoin itself to be a 100% pre-mine. Even so Bitcoin is not completely useless, because it can be used to handle transactions: You buy some Bitcoins, and then you spend them. You just can't mine them.

[misterbigg]

Realize that to every new user of a cryptocurrency, after the first guy, it appears to be a pre-mine.

You're not using the right definition of premine:

"pre-mine" (n) - A condition of a cryptocurrency when part or all of the currency distribution is limited to a predetermined subset of the target audience, under control of the authors.

The "classic" definition of premine is when someone forks Bitcoin, makes a few tweaks, and starts mining on the new chain in secret before releasing the client to the public. The definition above still applies, because the author limits the distribution of the currency by withholding the client binaries or sources.

Ripple is a total premine because 100% of the currency went straight to the authors. No one had an opportunity to be on equal footing with respect to control over the Ripple money supply.

Bitcoin does not qualify as a premine because the currency distribution was not limited to a subset of users. The authors did not prevent anyone from mining. Just because someone arrived to Bitcoin after other miners started getting rewards doesn't mean it is a pre-mine to them. In order to qualify as a premine, the author of Bitcoin must have withheld the client in order to obtain substantial block rewards before releasing to the public. This did not happen; Bitcoin was released publicly and everyone had the opportunity to mine. The author(s) of Bitcoin did not limit the opportunity to claim block rewards only to select individuals.

[herzmeister]

"pre-mine" (n) - A condition of a cryptocurrency when part or all of the currency distribution is limited to a predetermined subset of the target audience, under control of the authors.

lol, the next edition of Webster's Dictionary, right?

[misterbigg]

lol, the next edition of Webster's Dictionary, right?

Well, we're the new wealthy elite so we might as well define the terms.

[SRG]

I have been wrong on this so far, XRPs have done well based on the bitstamp exchange rate.  Even with people advertising for old forum accounts to get the free ripples the price seems to be heading up in terms of BTC not down like I expected.  Congrats and well played to Opencoin -- so far.

[wyodude]

I have been wrong on this so far, XRPs have done well based on the bitstamp exchange rate.  Every with people advertising for old forum accounts to get the free ripples the price seems to be heading up in terms of BTC not down like I expected.  Congrats and well played to Opencoin, so far.

Yes it's seems to be the case. Looking at exchange rates on ripple the it took ~75,000 XRP to 1 BTC yesterday, it's down to ~45,000 XRP today. But you are right time will tell.

[Beepbop]

Bitcoin does not qualify as a premine because the currency distribution was not limited to a subset of users. The authors did not prevent anyone from mining. Just because someone arrived to Bitcoin after other miners started getting rewards doesn't mean it is a pre-mine to them.

You are of course correct about this part, but to a new user's self interest it is a pointless distinction to make. The distribution of Bitcoin is indeed limitied to a subset of users, and my uncle wouldn't care that it was a random self-recruiting set of computer nerds who got in while mining was profitable or a predetermined set selected by the authors. The salient point is that it is a group of people to whom he owes nothing, and that owe him nothing in the future.

Ripple is a total premine because 100% of the currency went straight to the authors. No one had an opportunity to be on equal footing with respect to control over the Ripple money supply.

Ripple is not mined. You can't premine something that can't be mined. You could say that XRPs have been minted, or been printed at the stamp printing factory instead.

[nealmcb]

I think most of you are missing the point of Ripple and XRPs.

While currently opencoin has a bunch of XRPs to hand out, note that in the future a "consensus" process can issue more of them.  The goal is for them to NOT be scarce, though they are currently scarce since the distribution has just started and not too many people have gotten their 40000 of them yet.

Why would folks give XRPs away to keep them scarce?  The ripple community's goal (as envisioned by the creators) is not for XRP to be a scarce commodity, but merely for them to be valuable enough that it isn't easy to spam the whole network with new transactions or new accounts.

So don't expect XRP to skyrocket in value.  That's not what they are for.

What are they for?  Like the founders keep saying - they're like stamps to let you exchange other currencies.....

Ripple is about the exchange of other currencies, and ripples/XRP are about facilitating that, not about currency speculation in XRP itself.  As bitcoin itself has taught lots of people, and as Adam Smith said a long time ago, currency is about two things: “value in use” and “value in exchange”.  Folks are viewing bitcoin as valuable for both.  XRPs are designed for just "value in use".

Or at least that is the intent, as I read it.  Ultimately the consensus process (i.e. the community of users) will decide.

[misterbigg]

note that in the future a "consensus" process can issue more of them.

No, that's not right. If it was possible for the consensus process to alter account balances arbitrarily the system would never be accepted. One of the invariants of the Ripple system is that XRP cannot be created at all, and that the genesis ledger entry (first ledger entry) starts a certain account (to which the founders hold the private key) 100 billion XRP.

The goal is for them to NOT be scarce

Also incorrect. XRPs must be scarce to deter transaction spam. This is directly from the developers of the system.

Why would folks give XRPs away to keep them scarce?  The ripple community's goal (as envisioned by the creators) is not for XRP to be a scarce commodity, but merely for them to be valuable enough that it isn't easy to spam the whole network with new transactions or new accounts.

"Valuable enough" means "scarce enough to have value."

So don't expect XRP to skyrocket in value.

XRPs function ideally as currency, and one could argue they function as a reserve currency. In some ways they could be better than Bitcoins.

Like the founders keep saying - they're like stamps to let you exchange other currencies.....

No, that's not what they are saying at all. OpenCoin's business plan is to "hold XRPs and hope they go up in value." This is a direct quote (see above).

You need to review the statements that have come from developers of the system again, I think that you are not looking at the big picture.

[alexkravets]

+1