Ripple: A Distributed Exchange for Bitcoin

[mmeijeri]

Ripple solves nothing. It is a way to record p2p transactions, so what? Bitcoin already does that in a decentralized manner.

As far as I'm aware there is no Bitcoin-based system that allows either payments in IOUs denominated in real world currencies or a distributed order book for exchanging IOUs in different currencies. It could be built, but it doesn't exist yet, not even in beta.

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[Calavera]

Another problem is that it needs gateways like exchanges by bitcoin and actually there only one gateway.
Without gateways to fiat you cannot transfer fiat money just Ripple.

You can also "ripple" IOUs in any currency through your private trust network. Eventually gateways will become hubs that will connect everybody easily, but you can get started without them. It's a pity the existing gateways only accept IOUs for the USD and not for other real world currencies.

A virtual currency based on USD or EUR already exists. Liberty Reserve (USD and EUR) is easier than Ripple and it is also centralized but at least you don't need to install a closed source software where could be anything.
Ripple is an overkill for this purpose.
A total decentralized virtual USD could be constructed with the bitcoin technology with colored coins on the top of bitcoin or namecoin.

You do not need to install closed source software for ripple, the client is open source.  The server is currently closed source but they intend it to be open source.  They also intend the ledger to be decentralized.  That's their stated intention and we have no real reason to doubt them at the moment.  Liberty Reserve do not have this intention. 

I don't see how your decentralized vitual USD with bitcoin would be better than ripple rather than worse.  Each Gateway/Exchange/Whatever would have to issue their own coloured coins, and there would be no decentralised mechanism for exchanging one Gateway's coloured coin for another at parity or otherwise unless one is built separate to the bitcoin network. I haven't seen a solution for this in the bitcoinx documentation, can you describe it?

Thrust network:
If you thrust in somebody then why do you need Ripple to intermediate ? If you friend or your neighbor want to borrow 1.000 $ from you why would you need Ripple for it ?
A more complex thrust network for an organization or a religious group  can be built more reliable with colored coins on the bitcoin or namecoin network as stated above.

I agree, and the free transfer of debt that they allude to on a social scale is difficult to see ( Trust is A -> B -> C, so when C decides to send A and IOU it ends up with C owing B and B owing A, a frankly ridiculous position for B to be in.  Unless, of course, B was being paid for this service, but then we're talking about business not friends).  Some of the examples they give on their website, such as the restaurant one, while intending to be helpful are actually just confusing and give the wrong idea.

So the problem which exists by bitcoin with exchanges by Ripple is even worse at the moment it is just hidden by the complexity of the system which is difficult to understand.

As far as the mechanics of the payment system go it is better than Bitcoin, but it suffers from the same lack of adoption by real world merchant. However, I expect it to grow much more quickly since it can provide cheaper and more convenient payment services than traditional systems in any currency. The extreme volatility of BTC is a major impediment to its adoption as a payment system. Ripple allows you to avoid that risk by using fiat currencies. Adoption of XRP might also be easier because I've heard they are trying to stabilise the exchange rate, which they can do to a degree because they hold the bulk of all XRP that exist and because XRP reserves are needed to activate accounts and use their functionality.

But the killer app for Bitcoin users is as a decentralised exchange for BTC.

I am not sure if it would be more decentralized than a Liberty Reserve - Bitcoin exchange. As long as Ripple is controlled by somebody he can be forced to cooperate with the authorities.

The remaining XRP that haven't been distributed would be controlled by Opencoin but everything else would be distributed.  Lots of trusted people would have to be forced to cooperate and even then there's trust agility so trust could be assigned elsewhere.

[BTC Books]

Ripple is very difficult to understand and therefore is difficult to argument against it.

Unfortunately, that much is true, for Ripple as well as for Bitcoin.

I must half-way disagree with this.

Yes - Ripple is very difficult to understand.  I still don't, and I've looked at it several times.  And after a degree in physics and 20 years in IT, I tend to grasp complexities.

But bitcoin, on the other hand, was - for me anyway - like opening a door on a beautiful spring day after seven months of winter.  I got it immediately - all of it, and without any help or tutoring.  It just makes perfect sense.

[BubbleBoy]

Ripple is very difficult to understand and therefore is difficult to argument against it.
But what I understood it is centralized and not open source.
Another problem is that it needs gateways like exchanges by bitcoin and actually there only one gateway.
Without gateways to fiat you cannot transfer fiat money just Ripple.
So the problem which exists by bitcoin with exchanges by Ripple is even worse at the moment it is just hidden by the complexity of the system which is difficult to understand.

This is pretty much all true. But none of these things are fundamental about Ripple. It's just the difference between where we are and where we are going. You basically just summarized our priority list right now.

The XRP currency is somewhat similar to bitcoin, a fixed supply of coins that are owned by the company. The same deflationary characteristics only with a central issuer that hopes to earn money from seigniorage. So instead of individual speculators riding the deflation bubble, there is a single company dedicated to this, conjuring money out of thin air and playing the role of the central bank. I have to say the scheme is pretty sleazy and smart at the same time, but hardly revolutionary. If Ripple is successful there will be tremendous pressure from regulators to break or cripple it's anonymity and the company will have no choice but to comply. It's utterly irrelevant if the source is open, since the company owns the "central bank" keys, and there will be no reason to move to a different network with other keys where none of your money are valid anymore.

The one part I find exceptionally interesting is how the network achieves consensus without burning resources, using a darknet approach: nodes trust each other on an individual basis and keep their trust network secret. It's great that research and practical experimentations goes into this area, and I absolutely love the continuous ledger closing. I am a bit skeptical that the particular approach can achieve long term consensus in the face of network splits and deliberate attack, and I have my bets on prof of stake as the correct approach to this problem. But still, a practical way to run a distributed cryptocurrency without mining is a great experiment, proving there's no need for waste. If the scheme withstands scrutiny, it could form the basis of a truly open currency, where the minted money can go to the keys of a set of predefined charities, instead of private investors. (anyone interested can send my a message to brainstorm about this)

As for the credit network functionality, my primary gripe with "ripple type" systems is that they break the fungibility of money. I no longer have X amount of coins, I have a portfolio of credit lines of varying solvency. So instead of just trusting the bitcoin network (developers, miners etc.), I have to trust the ripple implementation (Opencoin, etc.) and on top of that I need to trust individual credit issuers when accepting credit from them and that their credit lines will remain solvent for some time until I will spend them. When you say "X dollars in ripple", the "dollar" there just fulfils the "unit of account" function of money. It's not a store of value and it's not a (fungible) means of exchange, in other words I can't reliably express my time and purchase preferences as I can with a dollar or a bitcoin.

Once people understand how ripple works (probably never for most people) the natural response is to settle al credits immediately to the entity trusted by most people, so the credit market will tend to form a cartel or a complete monopoly. This is not unlike the current banking landscape, only without state regulation. When a trusted entity will fail - and it has allot of incentives to do just that - it will wreck havoc. Maybe there's value in the ripple credit network, but ripple credit is not "money" in the common sense of the word: debt issued by an indisputable single entity with the sole purpose of serving as an exchange medium and with zero incentive for manipulation.

[Coincrazy]

Why do I see so many calls for implementing distributed Bitcoin exchanges or putting up more robust/centralized Bitcoin exchanges when we will soon have Ripple, which perfectly provides distributed order books?

I can't see a price discovery mechanism in ripple  .....a trading point ... a board .... where bids and offers are matched  and a price is fixed like in an exchange

Ripple can be used for transfer as long as the price is determined elsewhere ...example at an exchange or at a central bank


Also.... NOT directly connected to this question, Ripple has a counter party and the founders have a huuuuge stake

Please see

========

https://ripple.com/wiki/Introduction_to_Ripple_for_Bitcoiners#ripple.27s_Currency

Distribution

The ripple founders created the initial ripple ledger with 100 billion XRP. The founders gifted a for profit company called Opencoin 80 billion XRP. Opencoin intends to give away over 50 billion XRP. The remainder will be used to fund Opencoin operations, which include contributing code to the open source network and promoting the network.

Even if Opencoin should close, the ripple network will continue. Because the ripple is a P2P network, it is not operated by Opencoin but by the combined efforts of all the computers running the ripple server software. The ripple network cannot be shut down without shutting down the entire Internet.

============

[misterbigg]

I can't see a price discovery mechanism in ripple  .....a trading point ... a board .... where bids and offers are matched  and a price is fixed like in an exchange

You mean like this?

Also.... NOT directly connected to this question, Ripple has a counter party and the founders have a huuuuge stake

There is no counter-party risk for holding XRPs. No one can take your XRP away from you, or prevent you from sending or receiving them. It is true that there are large stakeholders of XRP but this is not significantly different from Bitcoin. Furthermore, it's not in OpenCoin's best interest to cause the value of XRP to drop through a sell-off.

[Calavera]

As for the credit network functionality, my primary gripe with "ripple type" systems is that they break the fungibility of money. I no longer have X amount of coins, I have a portfolio of credit lines of varying solvency. So instead of just trusting the bitcoin network (developers, miners etc.), I have to trust the ripple implementation (Opencoin, etc.) and on top of that I need to trust individual credit issuers when accepting credit from them and that their credit lines will remain solvent for some time until I will spend them. When you say "X dollars in ripple", the "dollar" there just fulfils the "unit of account" function of money. It's not a store of value and it's not a (fungible) means of exchange, in other words I can't reliably express my time and purchase preferences as I can with a dollar or a bitcoin.

Their website would often not make you think so, but they agree with you on this.  When you say that you have a dollar, for most people this actually means a dollar in the bank rather than in their pocket.  So basically they have an IOU from the bank.  Ripple just provides a way of transferring this IOU securely without the cooperation of the issuer.   It also provides a secure exchange (have you seen Advanced->Trade?), where the distributed system will guarantee that you get the IOU you're bidding for and not be ripped off. 

Once people understand how ripple works (probably never for most people) the natural response is to settle al credits immediately to the entity trusted by most people, so the credit market will tend to form a cartel or a complete monopoly. This is not unlike the current banking landscape, only without state regulation. When a trusted entity will fail - and it has allot of incentives to do just that - it will wreck havoc. Maybe there's value in the ripple credit network, but ripple credit is not "money" in the common sense of the word: debt issued by an indisputable single entity with the sole purpose of serving as an exchange medium and with zero incentive for manipulation.

That would imply that everybody in the world trusts this entity.  I don't see that being the case, although that would be up to individuals as it should be. 

[Calavera]

It is true that there are large stakeholders of XRP but this is not significantly different from Bitcoin. Furthermore, it's not in OpenCoin's best interest to cause the value of XRP to drop through a sell-off.

No small group of people have 99.9% of all bitcoins, and in fact only half of the bitcoin money supply has even been allocated.  Even if the bitcoin creators mined up a significant portion of coins before other people got on board, that's still profoundly different to what's intended for XRP. 

[mmeijeri]

OpenCoin temporarily acting as a central bank could be advantageous for adoption. They could prevent the exchange rate from rising too fast by selling from their hoard of XRPs. In doing so they could build up a stash of real world currency which they could use to buy up XRP if the exchange rate drops too quickly. They could also destroy some of their hoard. If XRP appreciates slowly but steadily, then it would be attractive both as a payment mechanism and as a store of value.

[Coincrazy]

Ripple is very difficult to understand and therefore is difficult to argument against it.

Unfortunately, that much is true, for Ripple as well as for Bitcoin.

I must half-way disagree with this.

Yes - Ripple is very difficult to understand.  I still don't, and I've looked at it several times.  And after a degree in physics and 20 years in IT, I tend to grasp complexities.

But bitcoin, on the other hand, was - for me anyway - like opening a door on a beautiful spring day after seven months of winter.  I got it immediately - all of it, and without any help or tutoring.  It just makes perfect sense.

Agree 100%

I do not have a degree in physics nor have I put in 20 years in IT

I have though , put in 20+ years in corporate finance

[Este Nuno]

JoelKatz:

Are gateways allowed to charge their own fees on top of ripple?

[Calavera]

Agree 100%

I do not have a degree in physics nor have I put in 20 years in IT

I have though , put in 20+ years in corporate finance

I think it's just currently badly explained rather than difficult to understand ... but then, perhaps my understanding of it is incorrect!

JoelKatz:

Are gateways allowed to charge their own fees on top of ripple?

OpenCoin will ultimately have no direct control over who is a gateway or not, or any means of setting rules for what they charge.  The only control they'll have will be via XRP.  I'd suggest that if that control is enough to dictate rules to gateways in practice then Ripple has failed to be an open system. 

[Este Nuno]

If not fees, what incentive would someone have to be a gateway? I can't really think of much reason for a company to become a gateway.

So if gateways will charge fees, doesn't that diminish the value of the system? What cost advantages would it have over the money transfer services available now?

[Calavera]

If not fees, what incentive would someone have to be a gateway? I can't really think of much reason for a company to become a gateway.

So if gateways will charge fees, doesn't that diminish the value of the system? What cost advantages would it have over the money transfer services available now?

They will almost certainly charge fees unless they're fractional reserve or have some other incentive, see https://ripple.com/wiki/Transit_Fees .   If it all works as envisioned then the system will be more open than what we have which should allow for tighter competition, hence lower fees. 

[Sukrim]

Domestic transfers would be probably cheaper. You could p2p exchange some trusted USD to some trusted Eur and withdraw them after moving to Cyprus.

Still I kinda have an issue with the idea that the more trust you have, the more funds you probably have in storage and then the easier it is to fail (e.g. 100k Eur insured bank account).
Once you get too big to fail like a bank that has to be bailed out its nice again - most likely gateways will be somewhere in between though.

Still, becoming a gateway seems to be quite interesting but I'm also not too sure how to handle all the associated risks like scams, payments being canceled and so on.
Also: how well does ripple actually scale? Can it actually reliably exchange USD to btc and vice versa, who actually does process the order book and how many transactions per second can it currently/max. handle? Also where are the limitations? CPU? HDD? Server side? Client side? Who decides if my order was first and gets taken?

[BubbleBoy]

As for the credit network functionality, my primary gripe with "ripple type" systems is that they break the fungibility of money. I no longer have X amount of coins, I have a portfolio of credit lines of varying solvency. So instead of just trusting the bitcoin network (developers, miners etc.), I have to trust the ripple implementation (Opencoin, etc.) and on top of that I need to trust individual credit issuers when accepting credit from them and that their credit lines will remain solvent for some time until I will spend them. When you say "X dollars in ripple", the "dollar" there just fulfils the "unit of account" function of money. It's not a store of value and it's not a (fungible) means of exchange, in other words I can't reliably express my time and purchase preferences as I can with a dollar or a bitcoin.

When you say that you have a dollar, for most people this actually means a dollar in the bank rather than in their pocket.  So basically they have an IOU from the bank.  Ripple just provides a way of transferring this IOU securely without the cooperation of the issuer.   It also provides a secure exchange (have you seen Advanced->Trade?), where the distributed system will guarantee that you get the IOU you're bidding for and not be ripped off.  

When I say I have a dollar, most people understand that I either have a dollar in my pocket, that I have a dollar in a FDIC insured bank account, held by a bank regulated by the government and expected to adhere to minimal reserves and liabilities matching their assets, which requires a collateral and does risk assessment before lending money, and for which the Fed is ready to print unlimited amounts of green bills to stop a bank run. If I tell people that "an unregulated ecurrency market called BitInstant, ran by a 22 year old, with no financial oversight owes me 5000 dollars" they will ask me "so... when will they give you the money" ?

Without disagreeing with you, that's what I saying: the steady state for a ripple credit network is something similar to our current banking system, only without the state's (OpenCoin's) emergency assistance. A very brittle shadow banking system issuing heterogeneous money substitutes (that's an economic term). The size of Bitinstant does not matter, the amount of trust people have in Bitinstant does not matter, the fact that Bitinstant doesn't make out loans does not matter. If it walks like a bank, it smells like a bank. For all we know, all coins that Bitinstant owes have been stolen or poorly invested in Bitinstant2. And we won't know that until a bank run is under way, there is no way for the market to discover what's really in Bitinstant's coffers.

I've seen the secure exchange, from what I gather it's mainly a way to bring money into the system and pump the XRP, that's what Opencoin really cares about.

Even if Opencoin should close, the ripple network will continue. Because the ripple is a P2P network, it is not operated by Opencoin but by the combined efforts of all the computers running the ripple server software. The ripple network cannot be shut down without shutting down the entire Internet.

That's just half of the story. If Opencoin spends all it's XRP and fails, then yes, the network will probably continue without it. But how could Opencoin fail with such a large endowment ? I'm much more worried that the majority of coins in existence will continue to be held by Opencoin for the foreseeable future and will act as a sword of Damocles over the currency. They will have practically unlimited power and thus could act as a proxy for other entities, such as world governments.

[misterbigg]

Domestic transfers would be probably cheaper.

The cost of a transfer is determined by both the gateway transfer fee and also the bid/ask spreads in the best corresponding order books used when calculating a currency conversion path.

Still I kinda have an issue with the idea that the more trust you have, the more funds you probably have in storage and then the easier it is to fail (e.g. 100k Eur insured bank account).

Trusting a gateway is no different than trusting a bank. We expect that after Ripple gains popularity, Ripple-enabled banks will emerge where you can open a traditional checking account that can also be used to send and receive Ripple payments.

When you hold IOUs there is always counterparty risk, whether the gateway is a bank or a MtGox. That's why Ripple complements Bitcoin but does not replace it - if you want to eliminate the risk from holding IOUs, then redeem your balance in Bitcoins and hold the coins yourself. Another option is to convert your IOU balance into XRPs (by buying them on the distributed market). Over time, it is likely that the usefulness of XRP will make it a store of value equal to or better than Bitcoin but that might take a while. Appreciation of XRP will probably be dampened somewhat for as long as OpenCoin and the founders hold a significant amount.

Still, becoming a gateway seems to be quite interesting but I'm also not too sure how to handle all the associated risks like scams, payments being canceled and so on.

The "gateway" concept already exists outside of Ripple. A bank is a gateway to the banking system. Paypal is a gateway to the PayPal payment network. MtGox is a gateway to the Bitcoin system. Gateways already exist, and they already deal with the risks that you pointed out. Becoming Ripple-enabled just means that their IOUs can trade in a cryptographically secure fashion and in a global market.

Also: how well does ripple actually scale? Can it actually reliably exchange USD to btc and vice versa, who actually does process the order book and how many transactions per second can it currently/max. handle? Also where are the limitations? CPU? HDD? Server side? Client side? Who decides if my order was first and gets taken?

These are great questions. From the information available, it seems that Ripple will scale in a better fashion than Bitcoin. But more importantly, Ripple does not have as a design goal to run validators/nodes on low end hardware in the same way that Bitcoin does. Right out of the starting gate, Ripple has a huge advantage in that transactions confirm very quickly (a few seconds as of now).

[misterbigg]

If Opencoin spends all it's XRP and fails, then yes, the network will probably continue without it. But how could Opencoin fail with such a large endowment ? I'm much more worried that the majority of coins in existence will continue to be held by Opencoin for the foreseeable future and will act as a sword of Damocles over the currency. They will have practically unlimited power and thus could act as a proxy for other entities, such as world governments.

There are only a few outcomes, and they can all be enumerated:

Q: Can OpenCoin hoard all the XRPs?
A: Yes, but if XRPs become too scarce then nodes will use the consensus algorithm to lower the XRP fees and reserve requirements.

Q: What if OpenCoin sells all it's XRPs at once?
A: There is little incentive to do that, since the price would crash and OpenCoin would make less money. Even so, the result would be similar to recent Bitcoin crashes. Mass panic, and then the price recovering. But OpenCoin could only do this once. After that, the market will set the price. The core Ripple functionality of sending fiat-denominated IOUs securely to anywhere on the planet would be largely unaffected.

Q: How should OpenCoin sell the XRPs?
A: To maximize profit from XRPs sales, OpenCoin needs to carefully maintain the price of XRP. They don't want to sell too much XRP at once since that would lower the price and reduce their profits. But they also don't want too sell too little. OpenCoin will likely sell just enough XRPs so that their scarcity does not slow down adoption of the system.

Once the give-aways are all over, the only way for a new user to create a Ripple wallet will be to either buy the reserve XRPs directly from a gateway, or to have the gateway subsidize the reserve requirement as part of the marketing costs of acquiring a new customer. Should OpenCoin sell too few XRPs, the cost for gateways to acquire new customers will exceed the expected return. At this point, there will be strong pressure for all participating nodes to vote to reduce the reserve requirement. If this vote is successful it would instantly liberate some amount of XRPs that were previously sequestered as reserves, thus reducing the price of XRP and also OpenCoin's future profits.

[Calavera]

As for the credit network functionality, my primary gripe with "ripple type" systems is that they break the fungibility of money. I no longer have X amount of coins, I have a portfolio of credit lines of varying solvency. So instead of just trusting the bitcoin network (developers, miners etc.), I have to trust the ripple implementation (Opencoin, etc.) and on top of that I need to trust individual credit issuers when accepting credit from them and that their credit lines will remain solvent for some time until I will spend them. When you say "X dollars in ripple", the "dollar" there just fulfils the "unit of account" function of money. It's not a store of value and it's not a (fungible) means of exchange, in other words I can't reliably express my time and purchase preferences as I can with a dollar or a bitcoin.

When you say that you have a dollar, for most people this actually means a dollar in the bank rather than in their pocket.  So basically they have an IOU from the bank.  Ripple just provides a way of transferring this IOU securely without the cooperation of the issuer.   It also provides a secure exchange (have you seen Advanced->Trade?), where the distributed system will guarantee that you get the IOU you're bidding for and not be ripped off. 

When I say I have a dollar, most people understand that I either have a dollar in my pocket, that I have a dollar in a FDIC insured bank account, held by a bank regulated by the government and expected to adhere to minimal reserves and liabilities matching their assets, which requires a collateral and does risk assessment before lending money, and for which the Fed is ready to print unlimited amounts of green bills to stop a bank run. If I tell people that "an unregulated ecurrency market called BitInstant, ran by a 22 year old, with no financial oversight owes me 5000 dollars" they will ask me "so... when will they give you the money" ?

Absolutely.  This is where I think the Ripple website doesn't do them justice.  They're well aware of that.  This is a more unified and open system of what's going on at the moment.  And while it's far from completely open due to XRPs it's still considerably more open that what's in place.

Without disagreeing with you, that's what I saying: the steady state for a ripple credit network is something similar to our current banking system, only without the state's (OpenCoin's) emergency assistance. A very brittle shadow banking system issuing heterogeneous money substitutes (that's an economic term). The size of Bitinstant does not matter, the amount of trust people have in Bitinstant does not matter, the fact that Bitinstant doesn't make out loans does not matter. If it walks like a bank, it smells like a bank. For all we know, all coins that Bitinstant owes have been stolen or poorly invested in Bitinstant2. And we won't know that until a bank run is under way, there is no way for the market to discover what's really in Bitinstant's coffers.

Again, completely agree, but the argument is that that's the state we're in at the moment anyway.  For one thing there's no reason that the entities have to be Bitinstant, they can be PayPal or BoA and have whatever regulation they want.  If there are regulated portions they don't have to trust unregulated portions.

I've seen the secure exchange, from what I gather it's mainly a way to bring money into the system and pump the XRP, that's what Opencoin really cares about.

Well, I certainly agree that Opencoin can only be trusted to care about Opencoin.  However, the exchange doesn't have to involve XRP (apart from the transaction fee, i.e. one side doesn't have to be denominated in XRP).  To be fair, you're saying you've seen it but you flat out asked where it was a second ago, which is the only reason it was brought up.

Even if Opencoin should close, the ripple network will continue. Because the ripple is a P2P network, it is not operated by Opencoin but by the combined efforts of all the computers running the ripple server software. The ripple network cannot be shut down without shutting down the entire Internet.

That's just half of the story. If Opencoin spends all it's XRP and fails, then yes, the network will probably continue without it. But how could Opencoin fail with such a large endowment ? I'm much more worried that the majority of coins in existence will continue to be held by Opencoin for the foreseeable future and will act as a sword of Damocles over the currency. They will have practically unlimited power and thus could act as a proxy for other entities, such as world governments.

I'd really need to do some research and maths.  As I understand it all the fees and figures are set by consensus of the set of nodes that end up most trusted.   So, if there was later a movement against opencoin the fees and reserves could be adjusted by consensus so that whatever had already been distributed was sufficient to run an economy.  That said OpenCoin's control of the XRP supply is a clear avenue of attack against the system.  Also, apart from XRPs all the debts in Ripple represent actual debts and can be removed from the Ripple system if Ripple becomes infeasible.  If ripple is actually no better than what's in place at the moment then there would be no massive problem doing that.

[Sukrim]

A few seconds might be great for transfers, for trades however... just look at mtgox. Also who is the one running the order book? The server?

With domestic transfers I meant that ripple gateways would probably help in you getting a domestic transfer to your account instead of international wires. Instead of paying wire fees, you'd pay hopefully fewer fees to convert to IOUs that a domestic gateway accepts. Then withdraw there.

I know that ripple doesn't use proof of work for consensus, still there are quite some bottlenecks that I can think of. I really wanna know which parts handle which systems in the whole ripple idea.