Ripple: A Distributed Exchange for Bitcoin

[Calavera]

The server is not open source yet. Once the server is open source, we'll have to obtain a consensus on every feature change that affects what transactions are valid or what effects they have, just like Bitcoin does. I used to say we sometimes make those kinds of changes three times a day. We're probably down to once a week at most now.

Why could you not have released a version that doesn't partake in a consensus?  i.e. your server(s) don't have to pay attention to whatever other servers are out there just because they exist.  You have to understand that when you have say "open" and have the OSI symbol on your website people will react very negatively when they find out that is isn't actually open source. 

We're not promoting Ripple as a social/community credit platform right now but rather as a payment and exchange system. (Though I have high hopes for it in the future.)

I have to say, this should be much clearer in the client and in the information on your website.  A lot of the diagrams have pictures of casual people where they should actually have guys in suits.

I've only started reading about ripple but my initial thoughts are that it won't gain any real traction as a community credit system, as people aren't going to want to hassle their friends for money when they weren't one of the end parties of the transfer.  I can see this being acceptable to a business with contracts in place but not socially. 

That brings me to the other claim on your website: "free(ish)".  As Gateways and the intermediaries will be for-profit entities, I don't see how this will be free(ish) at all, even if the base XRP cost is near-free everybody else will charge money.  It will possibly be cheaper than other ways of sending money, but I don't even see how that's guaranteed.

[nameface]

Nice pretending to be open source,  don't trust them, they are not honest from beginning !!!!

Nobody claims Ripple is open source. They're saying it will be open source eventually.
Things will roll out in phases. I'm certain there's sound logic behind their plan, and no need to spread fud like this yet.

[LeTanque]

That brings me to the other claim on your website: "free(ish)".  As Gateways and the intermediaries will be for-profit entities, I don't see how this will be free(ish) at all, even if the base XRP cost is near-free everybody else will charge money.  It will possibly be cheaper than other ways of sending money, but I don't even see how that's guaranteed.

Well, if you exchanging xrp for btc or any other currencies with me, I won't charge any fees. If you are purchasing goods from someone with Ripple, they might not charge fees. If you are making a micro purchase of content from your favorite news site, they won't charge fees.

There are lots of instances where the only fee will be very small amount of xrp.  By that reasoning, the claim "free(ish)" is not misleading.

[Minor Miner]

Why use XRP at all and have to have IOUs?   Why not use bitcoin?

[LeTanque]

So do the ripple supporters/contributors see their platform as more of a replacement to Bitcoin or as a complement?

Ripple is more of a complement to bitcoin.

Bitcoin is like a decentralized currency where ripple is a decentralized (eventually) exchange (and more).

[LeTanque]

Nice pretending to be open source,  don't trust them, they are not honest from beginning !!!!

Nobody claims Ripple is open source. They're saying it will be open source eventually.
Things will roll out in phases. I'm certain there's sound logic behind their plan, and no need to spread fud like this yet.

Agreed, they are still in beta and have never misrepresented their intent. 

They are choosing to build the plane before they fly it.

[nameface]

They are choosing to build the plane before they fly it.

Nice choice of words. Bitcoin didn't need this. Bitcoin's like an a-bomb going off, and Ripple's like dealing with the realities of the new landscape.

[mmeijeri]

Ripple is more of a complement to bitcoin.

Bitcoin is like a decentralized currency where ripple is a decentralized (eventually) exchange (and more).

It's both a complement and a competitor as it has its own currency, also called the Ripple (XRP). I welcome both aspects, because Bitcoin needs a distributed exchange to grow and competition is healthy.

Why are people so negative about the idea of a company investing in setting up a new currency for profit? Aren't you proponents of a free market?

[mmeijeri]

Why use XRP at all and have to have IOUs?   Why not use bitcoin?

You can use BTC IOUs.

[mmeijeri]

Because 'soon' is not 'now'.

It is likely to be sooner than something that has to start from scratch. Of course you don't have to start from scratch, you could build something similar on top of the BTC block chain. But even then, since the client software is open source already, you could use it and modify it make it talk to a block chain based back end.

And even if the Ripple server were never to be made open source, it can still be used *right now* to help Bitcoin grow. After all, for now you also have to use traditional payment systems to get BTC.

[JoelKatz]

Why use XRP at all and have to have IOUs?   Why not use bitcoin?

Despite the best efforts of the Bitcoin community, there are still people who think it's a good idea to transact in fiat currencies like dollars and Euros. One of the key design goals of Ripple is to allow people to transact in Euros and dollars while still getting many of the benefits of Bitcoins.

You can use Bitcoins with Ripple. You can do it right now with a few extra steps, but we're working on seamless gateways. Every merchant who takes Ripple is one more merchant you can pay with Bitcoins. And Ripple will provide a distributed, open market to buy and sell Bitcoins.

[Sukrim]

If I create my own BTC IOUs I need to be trusted by others though, or I need to find a highly trusted gateway to deposit my coins.

Wouldn't that lead to more centralisation?! "Ideally" there's only 1 huge BTC gateway and everyone who wants to use BTC trusts it, kinda like MtGox. If there's any other gateway, the users with smallgateway-BTCs need to exchange them to the more trusted largegateway-BTCs... and if it really can be trusted would only show after a catastrophe, just like with pirateat40's "business".

Also even if I have highly trusted BTC IOUs in Ripple and I want to buy something at Merchant-X I need to exchange these BTC IOUs to something this merchant accepts (e.g. Amazon-USD-IOUs), I can't buy directly. Maybe Ripple will do conversion at an integrated exchange module on the spot in the future?

[Calavera]

Nice pretending to be open source,  don't trust them, they are not honest from beginning !!!!

Nobody claims Ripple is open source. They're saying it will be open source eventually.
Things will roll out in phases. I'm certain there's sound logic behind their plan, and no need to spread fud like this yet.

To be fair, the website claims multiple times that it's open source. 

That brings me to the other claim on your website: "free(ish)".  As Gateways and the intermediaries will be for-profit entities, I don't see how this will be free(ish) at all, even if the base XRP cost is near-free everybody else will charge money.  It will possibly be cheaper than other ways of sending money, but I don't even see how that's guaranteed.

Well, if you exchanging xrp for btc or any other currencies with me, I won't charge any fees. If you are purchasing goods from someone with Ripple, they might not charge fees. If you are making a micro purchase of content from your favorite news site, they won't charge fees.

There are lots of instances where the only fee will be very small amount of xrp.  By that reasoning, the claim "free(ish)" is not misleading.

I'm primarily looking at XRP as a facilitator currency at the moment rather than anything else.  If the system is successful then XRP will clearly have some value attached to it at a given time, but with so much of it in the hands of a for-profit company it's hard to take it seriously as a currency. 

Your examples: can there even be a "fee" on a trade?  Your fee would surely be part of the price you're offering.   I assume the BTC you're exchanging is issued by some Gateway A rather than yourself.  Did Gateway A charge you a fee for this?  If not, what have they gained by partaking in any of this at all?  I'm assuming they aren't a fractional reserve, although this might not be a good assumption.   The same goes for the other examples.  The person selling something, for instance, doesn't trust me.  So when I send him money it'll have to eventually be converted into an IOU from somebody he does trust.  If all these intermediary entities and gateways are businesses, and I think they pretty much have to be, then they'll have to be charging fees for their participation. 

Obviously I could be misunderstanding something, but in any case I don't see this as a killer to the concept, only that it wouldn't be free.  I do see a lot of value in this as a distributed exchange with fees on a web of gateways for deposit or withdrawal. 

[gogxmagog]

how do i get some? (i already got the free 35000 giveaway, i just want more)

[bitcoinik]

I like the idea of Ripple because it is way easier to move money around than with Bitcoin. That has been the main problem with Bitcoin - actually acquiring it. It seems like the price volatility we're experiencing with BTC has to do with so many people trying to figure out how to get their hands on them...

[JoelKatz]

Why could you not have released a version that doesn't partake in a consensus?  i.e. your server(s) don't have to pay attention to whatever other servers are out there just because they exist.

If we opt not to create a consensus with people, then we will be intentionally creating network splits. This would be irresponsible behavior that would be devastating to the reliability of the network. It would be like if Bitcoin had gone public before 21 million Bitcoins was established as the number of coints.

I've only started reading about ripple but my initial thoughts are that it won't gain any real traction as a community credit system, as people aren't going to want to hassle their friends for money when they weren't one of the end parties of the transfer.  I can see this being acceptable to a business with contracts in place but not socially.

I would have said the similar things about Facebook and texting. But I agree, social/community credit is not realistic in the short term.

That brings me to the other claim on your website: "free(ish)".  As Gateways and the intermediaries will be for-profit entities, I don't see how this will be free(ish) at all, even if the base XRP cost is near-free everybody else will charge money.  It will possibly be cheaper than other ways of sending money, but I don't even see how that's guaranteed.

It's not guaranteed. That's a forward looking statement. We expect transaction fees to be very low for the foreseeable future. And we expect that much of the time, once there's real liquidity in the network, you'll be able to do many things at no premium because you'll be helping people who want to move in the other direction. We're hopeful competition and volume will bring down the transfer fees. It doesn't cost a gateway anything to have its IOUs transferred, that's just a way to cover their costs. So more volume should bring that down.

[JoelKatz]

If I create my own BTC IOUs I need to be trusted by others though, or I need to find a highly trusted gateway to deposit my coins.

If you want them to be liquid, then yes. Otherwise, they'll just dead end and not be usable for payments. Someone has to be willing to take them in exchange for something liquid or lots of people need to take them in exchange for something reasonably liquid.

Wouldn't that lead to more centralisation?! "Ideally" there's only 1 huge BTC gateway and everyone who wants to use BTC trusts it, kinda like MtGox.

That would be a bad outcome. That would mean, for example, people would have no way to spread risk. It would mean people who didn't like the terms of the one huge gateway would be unable to transact in BTC on Ripple as they wish. However, if the gateway were super awesome and charged low fees and everyone loved it, then I won't complain.

If there's any other gateway, the users with smallgateway-BTCs need to exchange them to the more trusted largegateway-BTCs... and if it really can be trusted would only show after a catastrophe, just like with pirateat40's "business".

They'll exchange them instantaneously when they make payments. Ripple is specifically designed to make this painless. You can lose money if you choose to use a gateway and it collapses or goes out of business.

Also even if I have highly trusted BTC IOUs in Ripple and I want to buy something at Merchant-X I need to exchange these BTC IOUs to something this merchant accepts (e.g. Amazon-USD-IOUs), I can't buy directly. Maybe Ripple will do conversion at an integrated exchange module on the spot in the future?

It does that already. You can say "I want to send 50 USD to this account" and it will say "You can do that for $50.001 USD, 10 Bitcoins, or 49,000 XRP" and each choice uses pathways and exchanges in combination to get you a better rate. This pathfinding system and distributed exchange is a huge part of what makes Ripple work with multiple gateways and across currencies.

[TimJBenham]

Right now it seems like a major limitation for people in the USA is how to get USD into their ripple acct.  They only accept Bitstamp and Weexchange.  Bitstamp is not good for USA unless you want to send an international wire, which is a hassle.   I can't figure out any other way to get money into Bitstamp.  Some people say Bitinstant, but it doesn't seem to support moving funds into Bitstamp any more..correct me if I'm wrong.

Is sending an international bank wire such a hassle in the US? I can send them from my internet banking in Australia. The main hassle is the cost ($22).

Weexchange has a horrible website that won't even let me register.

Weexchange website is kind of nightmarish I agree. It wouldn't let me register a first, but the second attempt succeeded. Needn't have bothered. The spread was like 20/180.

[mmortal03]

Meh, the problem of ripple is the same of bitcoin, very few people use it. Yes, if everyone use ripple, then it would be good as an exchange for bitcoin. But well, then if everyone use bitcoin, we would not even need an exchange.

They have a lot of people interested from here: https://bitcointalk.org/index.php?topic=145506.0

[mmortal03]

If I create my own BTC IOUs I need to be trusted by others though, or I need to find a highly trusted gateway to deposit my coins.

Wouldn't that lead to more centralisation?! "Ideally" there's only 1 huge BTC gateway and everyone who wants to use BTC trusts it, kinda like MtGox. If there's any other gateway, the users with smallgateway-BTCs need to exchange them to the more trusted largegateway-BTCs... and if it really can be trusted would only show after a catastrophe, just like with pirateat40's "business".

Also even if I have highly trusted BTC IOUs in Ripple and I want to buy something at Merchant-X I need to exchange these BTC IOUs to something this merchant accepts (e.g. Amazon-USD-IOUs), I can't buy directly. Maybe Ripple will do conversion at an integrated exchange module on the spot in the future?

Right, similar to coupons from Mt. Gox, BTC-E, Bitstamp, Vouch-X, or even Dwolla. Once you convert your bitcoins or dollars to one of those IOUs and get a code, you now have to trust that central party to stay in business.  This isn't any different from banks, except funds in some are trusted more than others by law at the moment. The more ways we can get around a central party as the intermediary, the better.