Ripple: A Distributed Exchange for Bitcoin

[stretchtime]

Till now I've not entirely understood the ripple approach. They say that there is no currency riks. Does it mean that XRP exhange rate is always stable. Are the money tranfers are always connected to XRP? If yes and the ripple gateways will be used in the future heaviliy, there should be like a bottleneck for XRPs, beacuse they are limited. In consequence a change in the exchange should result, what leads us to a currency risk. Where I am wrong? Thanks...

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[mmeijeri]

There is no exchange rate risk if you make payments in fiat currency IOUs, but then there is counterparty risk. That can be managed, but it's there. If you make payments in XRP (or in BTC outside the Ripple system), then there is no counterparty risk, but you do have exchange rate risk.

[stretchtime]

okay then I conclude that the ripple system (IOU) does not depend on xrp. Am I right?

[mmeijeri]

okay then I conclude that the ripple system (IOU) does not depend on xrp. Am I right?

Well, it depends on it in the sense that you need to make small deposits in XRP to open an account and to access various functionalities, but not in the sense that you need to convert IOUs to XRP to make payments. Since the amounts involved are only small, I'd say it's almost true it doesn't depend on XRP.

[stretchtime]

thanks and regards

[ab8989]

I agree. I was just trying to come up with different terminology for IOU in ripple, but gave up, because that's exactly what it is. We don't deposit money in banks, we lend our money to the bank.

Same with MtGox. We deposit fiat, and we get IOUs which are a database entry in their MySQL server. Then you buy Bitcoins on the exchange but you are really getting Bitcoin IOUs which also sit in their database. When you withdraw US Dollars from MtGox you get IOUs from your bank instead of MtGox IOUs. It is only when you withdraw Bitcoins to a wallet under your control that you actually have something which is not debt based and without counterparty risk.

What Ripple nay-sayers don't realize is that Ripple functions identically to the MtGox scenario, it's just more explicit. It would be like being able to send your "MtGox US Dollar IOUs" in a cryptographically secure way to anyone else with a Ripple wallet. Clearly, this is useful and not a "scam" as forum trolls would have us think.

No. I am a ripple nay-sayer and I do that exactly because I realize ripple functions like MtGox and to say it even more extreme, it operates exactly like banks.

I hate banks and I hate MtGox. Unfortunately I have to use banks and I have to use MtGox, but the less I use them the better and the less time I have my money on them is better. Hopefully in the future I can be able to use them even less and if I happen to develop a particular distaste for some of them I would like to retain my capability to completely cut my ties to any of them. I am not going to root for Citibank, Bank of America, MtGox or Ripple.

Actually ripple can be said to actually be even more fundamentally evil than regular banks. When people say banks can print money out from nothing that is true only in figurative way, not literally. Ripple on the other hand actually and literally prints their own money. There is no way I can support that. Ripple is totally 100% opposite to bitcoin in what it will do to the world monetary system if it ever happens to take over. Much more dangerous than normal banks and there is actually nothing that can neutralize that threat. No matter how much opensourcing, no matter how much forking or no amount of dubious decentralization within ripple will change that fundamental. Those acts just multiply the evil. They do not eliminate it.

I find it funny that some lipservice to bitcoin ideals is enough to convince many bitcoin advocates to completely turn around to support ripple.

[mmeijeri]

The stupid, it hurts.

[freequant]

So much drama around Ripple.
Looks like some people really feel threatened.

[TTBit]

Ripple on the other hand actually and literally prints their own money.

Do you think this bitcoin rally is due to people printing up their own money in ripple, depositing it in bitstamp and buying bitcoins?

That statement is false. This is like saying I write $100 on an index card and expect to use it to purchase goods.

[QuantumQrack]

I agree. I was just trying to come up with different terminology for IOU in ripple, but gave up, because that's exactly what it is. We don't deposit money in banks, we lend our money to the bank.

Same with MtGox. We deposit fiat, and we get IOUs which are a database entry in their MySQL server. Then you buy Bitcoins on the exchange but you are really getting Bitcoin IOUs which also sit in their database. When you withdraw US Dollars from MtGox you get IOUs from your bank instead of MtGox IOUs. It is only when you withdraw Bitcoins to a wallet under your control that you actually have something which is not debt based and without counterparty risk.

What Ripple nay-sayers don't realize is that Ripple functions identically to the MtGox scenario, it's just more explicit. It would be like being able to send your "MtGox US Dollar IOUs" in a cryptographically secure way to anyone else with a Ripple wallet. Clearly, this is useful and not a "scam" as forum trolls would have us think.

No. I am a ripple nay-sayer and I do that exactly because I realize ripple functions like MtGox and to say it even more extreme, it operates exactly like banks.

I hate banks and I hate MtGox. Unfortunately I have to use banks and I have to use MtGox, but the less I use them the better and the less time I have my money on them is better. Hopefully in the future I can be able to use them even less and if I happen to develop a particular distaste for some of them I would like to retain my capability to completely cut my ties to any of them. I am not going to root for Citibank, Bank of America, MtGox or Ripple.

Actually ripple can be said to actually be even more fundamentally evil than regular banks. When people say banks can print money out from nothing that is true only in figurative way, not literally. Ripple on the other hand actually and literally prints their own money. There is no way I can support that. Ripple is totally 100% opposite to bitcoin in what it will do to the world monetary system if it ever happens to take over. Much more dangerous than normal banks and there is actually nothing that can neutralize that threat. No matter how much opensourcing, no matter how much forking or no amount of dubious decentralization within ripple will change that fundamental. Those acts just multiply the evil. They do not eliminate it.

I find it funny that some lipservice to bitcoin ideals is enough to convince many bitcoin advocates to completely turn around to support ripple.

I am going to agree here.  I think Ripple is simply a get rich quick scheme for the principals involved, and is essentially antithetical to the spirit of Bitcoin.

No doubt these yahoos have already bought many btc with their free xrp that others are unknowingly making valuable.  I will refrain from participating.

[btcmind]

If it is of use for you, then you will use the system independent of the involvement of the principals. However, then the next ripple comes along, replacing ripple. Basically you could say the same about deposits. Why have deposit in a bank - it serves the bank employees first, then the bank equity holders and lastly yourself. Basically 99% of banks should go out of business, and the lending side completely decoupled.

[LaggedOnUser]

Question: The Ripple payment network works with any currency.  Supposedly, the ripple currency (XRPs) are limited to a fixed amount of 100 billion coins.  What is there to prevent Ripple from issuing more batches of coins as separate currencies any time they feel like it (XRP 2.0, XRP 3.0, etc)?  This has the same problem with Bitcoin and its derivatives.  It is not backed by a scarce commodity, and therefore can be endlessly duplicated (inflation).

[TTBit]

Question: The Ripple payment network works with any currency.  Supposedly, the ripple currency (XRPs) are limited to a fixed amount of 100 billion coins.  What is there to prevent Ripple from issuing more batches of coins as separate currencies any time they feel like it (XRP 2.0, XRP 3.0, etc)?  This has the same problem with Bitcoin and its derivatives.  It is not backed by a scarce commodity, and therefore can be endlessly duplicated (inflation).

Right now, nothing other than OpenCoin having a bad reputation. When decentralized though, I believe it would take a consensus. Much like a consensus would be needed to increase btc to more than 21 million coins.

[justusranvier]

I think Ripple is simply a get rich quick scheme for the principals involved, and is essentially antithetical to the spirit of Bitcoin.

Ripple has the potential to be an excellent way of easing the government money -> bitcoin upgrade path. Whether or not this potential will be realized is an open question.

[virtualmaster]

I think Ripple is simply a get rich quick scheme for the principals involved, and is essentially antithetical to the spirit of Bitcoin.

Ripple has the potential to be an excellent way of easing the government money -> bitcoin upgrade path. Whether or not this potential will be realized is an open question.

If something doesn't work it has always the potential to get work one day.
Bitcoin has not only the potential but already works.
I cannot beleave that some people are giving 1 bitcoin for 50.000 Ripple what you cannot use for anything.
I could make also a system and give to everybody 1 trillion of scamcoins, which doesn't cost anything.
This Ripples didn't cost anything but every bitcoin was mined with computing power and energy.
Coins like Ripple can make anybody with absolutely no cost in any amount.

[misterbigg]

Question: The Ripple payment network works with any currency.  Supposedly, the ripple currency (XRPs) are limited to a fixed amount of 100 billion coins.  What is there to prevent Ripple from issuing more batches of coins as separate currencies any time they feel like it (XRP 2.0, XRP 3.0, etc)?  This has the same problem with Bitcoin and its derivatives.  It is not backed by a scarce commodity, and therefore can be endlessly duplicated (inflation).

The difference is how the Ripple server software ("rippled") treats self-issued IOUs versus the built-in XRP currency. The XRPs are "special" in how they are handled. They cannot be created, only sent. In a sense they are as cryptographically secure as Bitcoins. Now if all of the people running the Ripple server software decided to apply a patch to the source code which made it so that XRPs could be created, then this situation would be different.

It would be very unlikely though. Bitstamp and Weexchange would certainly not approve of such a change. Nor would any other gateways that spring up between now and "open source day."

[Sukrim]

I think Ripple is simply a get rich quick scheme for the principals involved, and is essentially antithetical to the spirit of Bitcoin.

Ripple has the potential to be an excellent way of easing the government money -> bitcoin upgrade path. Whether or not this potential will be realized is an open question.

If something doesn't work it has always the potential to get work one day.
Bitcoin has not only the potential but already works.
I cannot beleave that some people are giving 1 bitcoin for 50.000 Ripple what you cannot use for anything.
I could make also a system and give to everybody 1 trillion of scamcoins, which doesn't cost anything.
This Ripples didn't cost anything but every bitcoin was mined with computing power and energy.
Coins like Ripple can make anybody with absolutely no cost in any amount.

What stops you from issuing and selling your own coins then?
Some people can't "beleave" that some other people are paying some amount of USD for Bitcoins...

Would it be better if Ripples were just called "Megatransactions" (1 XRP = 1 million(?) transactions) instead of "currency"? Then you'd just pay 1 BTC for 50 gigatransactions on Ripple...

Edit:
I'm still unclear about performance of the actual built-in "Ripple exchange" (= exchanging currencies automatically within Ripple itself, not withdrawing to e.g. Bitstamp, trading and depositing a different currency) - what are the bottlenecks besides block timers, how many transactions per second can it really handle and what's the trade lag?

[virtualmaster]

I think Ripple is simply a get rich quick scheme for the principals involved, and is essentially antithetical to the spirit of Bitcoin.

Ripple has the potential to be an excellent way of easing the government money -> bitcoin upgrade path. Whether or not this potential will be realized is an open question.

If something doesn't work it has always the potential to get work one day.
Bitcoin has not only the potential but already works.
I cannot beleave that some people are giving 1 bitcoin for 50.000 Ripple what you cannot use for anything.
I could make also a system and give to everybody 1 trillion of scamcoins, which doesn't cost anything.
This Ripples didn't cost anything but every bitcoin was mined with computing power and energy.
Coins like Ripple can make anybody with absolutely no cost in any amount.

What stops you from issuing and selling your own coins then?
Some people can't "beleave" that some other people are paying some amount of USD for Bitcoins...

Would it be better if Ripples were just called "Megatransactions" (1 XRP = 1 million(?) transactions) instead of "currency"? Then you'd just pay 1 BTC for 50 gigatransactions on Ripple...

Edit:
I'm still unclear about performance of the actual built-in "Ripple exchange" (= exchanging currencies automatically within Ripple itself, not withdrawing to e.g. Bitstamp, trading and depositing a different currency) - what are the bottlenecks besides block timers, how many transactions per second can it really handle and what's the trade lag?

OK
Good point. Let's try. it.
At least registration worked now. I already tried longer time ago but didn't worked for some reason.
As I see I cannot do anything without Ripples.

[Sukrim]

You can get free ones in the giveaway thread or buy just few (1000 XRP last for a LONG time!)

[zemario]

I could make also a system and give to everybody 1 trillion of scamcoins, which doesn't cost anything.

If you have no moral objection to that, then by all means, this is a recipe for profit. Bitcointalk is weird mix of people genuinely interested in bitcoin and a huge number of people begging to be scammed. I can ensure you, if yo do make a trillion scamcoins and put them for sale here on the forums, you will get a good amount of bitcoins for it.

On a more serious note...
I don't like the way opencoin is trying to 'sell' us the concept.

The word "decentralized" is abused. So much free credit trying to getting people to believe that what hapened with MTGOX and more seriously with btc24 can be prevented by using ripple. This doesn't sound very honest. So if mtgox or btc24 had gateways on ripple, how exactly would things be different? Not much, what happened with btc24 would still happen if it would be a ripple gateway.

Also, trying to avoid telling people that xrp is indeed a currency so people don't think that it boils down to yet another coin, except that this one can be literally minted till value exhaustion.