mr bigg I find that a pretty keen insightt. Weren't you originally a ripple hater?
In a manner of speaking yes. This was my progression of emotion towards Ripple:
1. Denial: "This can't possibly work. Who needs it when we have Bitcoin?"
2. Anger: "These guys gave themselves all the coins! This is another pre-mine / ponzi scam."
3. Acceptance: "Ripple solves important problems, and is well designed."
I studied Ripple for a while and asked many questions. It is much more complex than Bitcoin, that is certain. But also holds the promise of doing much more. Ripple doesn't replace Bitcoin but rather, complements it. A lot of people making objections in this thread simply don't understand Ripple and haven't thought long enough about it to see the implications.
One of Ripple's prime advantages over Bitcoin is that the development of the software and promotion of the related gateway services is run by a for-profit company instead of a group of neckbeards. You might think this is a bad thing but actually, it aligns the financial interests with the interests of the users. There's a financial incentive to write clean software, document it extensively, and work on the features that users actually want. Compare this with Bitcoin: if a user wants a feature that the developers don't find exciting to work on, the usual answer is "you don't pay our salary, Bitcoin is Open Source, if you want that feature then write it yourself."
The OpenCoin team is already up to 20 people I think. They are all getting a salary, and there is a level of management which guides the development. They have actual deadlines, and investors to be held accountable to. Compare this with Bitcoin, which still hasn't had a 1.0 release in over four years. Unlike Bitcoin, the Ripple protocol specifications are being written at the same time that the code is being written. Ripple should not experience the problem that Bitcoin has, where the protocol specification is changed on a whim at the pleasure of a few developers who have commit access to the Github repository.
OpenCoin's primary stated means of generating revenue is to "hold XRPs and hope they go up in value." That means they have a financial interest in making XRPs useful, and keeping their value stable (to the extent that they are able to do so, which will be very limited once they are all given away and sold). People need not worry that the rippled software is not open source yet, it will definitely be open sourced some time this year. Because otherwise, XRPs will be essentially worthless since no one would trust a closed system.
Because OpenCoin needs Ripple to be successful in order for them to make money, they can do things that Bitcoin can't realistically do. Like hire a PR firm to brand the Ripple product and promote it to the masses in a commercialized way. Compare this with Bitcoin, which only recently underwent a revision to the main website. The attitude of the Bitcoin developers and principals is that they don't want Bitcoin to grow too fast, and that it is still experimental beta software. OpenCoin, on the other hand, is aggressively courting partners to make Ripple provide as much utility as possible in a short time.
I had the pleasure of going to the Ripple meetup in San Francisco in March. I met with David Schwartz (JoelKatz), Stefan, Jed, Arthur, and a few others. After talking to these guys, the impression is that they
are smart. I found a group of friendly, motivated workers in their Mission District office with a bunch of computers at desks. They come in to work, there's whiteboards, and a lot of activity. It looks just like any other promising startup. There's a CEO, and they have an impressive panel of investors and backers. People who dismiss Ripple, do so at their own peril. OpenCoin has a lot of momentum, plenty of smart people, and a bulging war-chest of investment capital.
Ripple is already an impressive pieces of working software. You can go into your Ripple wallet right now and trade Bitcoins for US dollars, Euros, and XRPs, in the distributed order book. You can deposit and withdraw money at both Bitstamp and WeExchange. The Ripple beta solves the problem we recently experienced with the denial of service and MtGox lag. When Ripple opens its doors to the public, the first thing it will do is provide profoundly deep liquidity for Bitcoin. It will make the process of depositing money at an exchange a distributed process, since deposited funds can be used to purchase bitcoins in ANY order book not just one. Withdrawal of funds will be similarly distributed. If an exchange has a $10,000 monthly withdrawal limit you could just open an account at another exchange and withdraw from there as well. If MtGox can't verify users quickly enough, anyone could deposit money at a different Ripple-enabled exchange that has a smaller queue. In fairly short order, the fees exchanges charge for trades will be forced downwards due to the perfect competition that Ripple enables. Going beyond Bitcoin, Ripple will easily integrate into traditional payment networks like debit cards or checking accounts, allowing vendors to unknowingly accept Ripple payments through their already existing systems. Since Ripple IOUs correspond naturally to fiat currencies, these integrations will be far more convenient and functional than their Bitcoin counterparts.
Ripple is poised to be the next big thing during the crypto-currency revolution.
