Ripple or Bitcoin

[Este Nuno]

I think it's worth singling out this post and bringing it to everyone's attention because not only does it speak to the character of MPOE-PR but it also shows that not everything coming from this persona is accurate (although to be fair shim has been right about a few things, like Coinlab).

I am not an employee of OpenCoin nor have I been paid or compensated to talk or do anything related to Ripple. It's interesting how I get called a shill, while certain bad actors are paying newbies to shill for anti-Ripple. It is true that I am the author of BearShare, but iMesh took it over a long time ago. Anything having to do with the RIAA getting details of the BearShare users has nothing to do with me.

I must vigorously disagree that I am "made out of shit." Quite the contrary if anyone is "made out of shit" I think it is probably MPOE-PR although this a matter of opinion. It seems he resorts mostly to ad hominems, or worse name calling. Compare and contrast the content of my posts where I try to present facts in a calm and concise manner, versus the other guy's which routinely resort to name calling, slander, and disinformation.

Far from being "against Bitcoin" or wanting Ripple to "destroy Bitcoin" I am bullish on both: I hold most of my net worth in Bitcoin and XRP in equal amounts. My feeling is that Ripple and Bitcoin are complementary with each having their own strengths. I'm also a contributor to both the Bitcoin repository as well as the Ripple repository. Interesting that when I look through the commit log of either, I see nothing from either MPOE-PR or his puppet master.

I've had lots of experience with forum trolls (the BearShare forums were raunchy!) and when I read anything from MPOE-PR, I just mentally note that everything written is "for entertainment purposes only." Perhaps someday, hot air will be a viable source of alternative energy but until then MPOE-PR will remain delegated to the dust-bin of irrelevance.

So basically, you made a fake torrent piece of spyware, but it's not true that you made a fake torrent piece of spyware, and you're a shill but you're not a shill, and more words and even pictures. Well done. Your protest doth not convince. Carry on.

Google helped me find a Wall St. Journal quote regarding misterbigg: "prodigiously efficient one-man software operation."

Not bad.

[1714329959]

1714329959

[HostFat]

I think that here there are many haters with an hand, but they buying XRP with the other

[Este Nuno]

Well, if he really said he's the chick on the avatar he's just trolling you: MPOE is Mircea's company, as well as BitBet and Polimedia.

What about kakobrekla?

[timeofmind]

I'm here to try to get a better grasp of weaknesses in Ripple before I make a decision on whether it will work out or not. I had to go through the same mental processes with BitCoin, and will for any new currency that captures my interest. What I find funny are these people who get defensive and think their currency is being "slandered", just because people are trying to get a grasp of the possible weaknesses in the currency. I am also very much interested in discussing the possible weaknesses in BitCoin in order make a good estimate of how much risk I am incurring by saving in it. I think many of my questions are still unanswered here as this conversation digresses into accusations and characterizations.

Anyone out there willing to take a crack at this one yet? "Lets say either Ripple or Bitcoin become the global currency of choice. (ie. the Ripple "gateway" system becomes redundant). Which one of these currencies would be more reliable/resilient? Is "consensus" of nodes an improvement over mining?

[JoelKatz]

Is "consensus" of nodes an improvement over mining?

I think it's too early to tell especially given the extensive testing that proof of work has received. But I'm very optimistic. Two big fundamental differences: Proof of work can also be used to distribute a currency -- there's no known good way to do that using consensus. There's no known good way to handle a 51% attack on a proof of work system.

[cypherdoc]

Is "consensus" of nodes an improvement over mining?

I think it's too early to tell especially given the extensive testing that proof of work has received. But I'm very optimistic. Two big fundamental differences: Proof of work can also be used to distribute a currency -- there's no known good way to do that using consensus. There's no known good way to handle a 51% attack on a proof of work system.

this is where i think you've got it wrong.

POW is the ideal way to distribute coins as it starts everyone off on a level playing field.  yes, you had to know about Bitcoin and "see" it's potential to mine early but that's the way any startup goes.  also the subsequent buildup of POW systems (miners) acts not only to distribute validators widely but also increases the security of the system orders of magnitude making a 51% attack highly unlikely or infeasible.

by handing out XRP's randomly and w/o order creates all sorts of distortions.  everyone sees this now.

[misterbigg]

POW is the ideal way to distribute coins as it starts everyone off on a level playing field.  yes, you had to know about Bitcoin and "see" it's potential to mine early but that's the way any startup goes.

This is purely subjective. One could say that the XRP pre-mine is the ideal way to distribute coins because it funds the development and marketing of Ripple. Which one is "right?" I don't think there's any correct answer. Neither proof of work nor pre-mining violate the Non-aggression principle so from an ethical point of view they are both acceptable solutions.

I believe that much of the anti-Ripple sentiment comes from the manner in which the XRP are distributed (i.e. the founders and OpenCoin start with all of them). I can relate to this, we're all human after all. But once all the XRP have been distributed or sold does it matter? Ripple is still very functional without having to have your own hoard of XRP. Unlike Bitcoin you will probably have to pay a reasonable fee to create a wallet (since it needs to have XRP reserves). On the other hand you can reap a lot of benefits of Ripple without having a wallet at all thanks to the federation protocol - just open an account at a gateway. You'll need to do that anyway to get money into and out of the system. This is why I keep saying that Ripple and Bitcoin are different and complementary.

If you want to deal purely in cryptocurrency and not interact at all with the fiat world, Bitcoin could be ideal. When you need to interface with other centralized government currencies, use Ripple. When you want to use government money to buy and sell bitcoin, use both.

[Este Nuno]

Is "consensus" of nodes an improvement over mining?

I think it's too early to tell especially given the extensive testing that proof of work has received. But I'm very optimistic. Two big fundamental differences: Proof of work can also be used to distribute a currency -- there's no known good way to do that using consensus. There's no known good way to handle a 51% attack on a proof of work system.

this is where i think you've got it wrong.

POW is the ideal way to distribute coins as it starts everyone off on a level playing field.  yes, you had to know about Bitcoin and "see" it's potential to mine early but that's the way any startup goes.  also the subsequent buildup of POW systems (miners) acts not only to distribute validators widely but also increases the security of the system orders of magnitude making a 51% attack highly unlikely or infeasible.

by handing out XRP's randomly and w/o order creates all sorts of distortions.  everyone sees this now.

I think you misread what he said. I don't think he is saying that POW isn't a good way to distribute coins. He's saying that ripple's consensus system does not have any obvious way to to distribute coins in a fair manner. Which is why they've chosen the traditional method of distribution(which isn't inherently bad btw).

[misterbigg]

He's saying that ripple's consensus system does not have any obvious way to to distribute coins in a fair manner. Which is why they've chosen the traditional method of distribution(which isn't inherently bad btw).

Well, I am not so sure I would agree.

They could have used proof of work to distribute the XRP. The hashes wouldn't serve the same purpose as bitcoin, which is to protect the ledger. They would only serve to distribute the XRP. Once all the XRP are distributed proof of work would no longer be needed. It could have been set up on some type of time table similar to Bitcoin.

But then that leaves Ripple development in an unfunded state, having to beg for donations. It is going to be a lot easier for Ripple to gain traction with large established companies because they will be dealing with a CEO (Chris Larsen) instead of a guy living under a bridge (Amir Taaki). And we desperately need established companies not just for Ripple but Bitcoin as well. Exchanges and money transmitters are dropping like flies lately, think Liberty Reserve and Dwolla.

The challenge of producing high quality open source software (as opposed to just open source software) is figuring out how to make money to pay the bills. I think Ripple did a great job answering this question.

[Este Nuno]

What I find interesting is that bitcoin's economic design (block reward reduction, 21 million, deflationary ect) is probably eventually going to be what ends up causing bitcoin's success or failure. The technology behind bitcoin seems pretty solid at this point, so that's not so much of an issue now. But with ripple, XRP and how they choose to deal with it isn't going to be a critical factor in the success or failure of ripple. Ripple isn't about XRP. XRP is a sideshow which attracts a lot of attention but is ultimately irrelevant in the bigger picture.

[Este Nuno]

He's saying that ripple's consensus system does not have any obvious way to to distribute coins in a fair manner. Which is why they've chosen the traditional method of distribution(which isn't inherently bad btw).

Well, I am not so sure I would agree.

They could have used proof of work to distribute the XRP. The hashes wouldn't serve the same purpose as bitcoin, which is to protect the ledger. They would only serve to distribute the XRP. Once all the XRP are distributed proof of work would no longer be needed. It could have been set up on some type of time table similar to Bitcoin.

But then that leaves Ripple development in an unfunded state, having to beg for donations. It is going to be a lot easier for Ripple to gain traction with large established companies because they will be dealing with a CEO (Chris Larsen) instead of a guy living under a bridge (Amir Taaki). And we desperately need established companies not just for Ripple but Bitcoin as well. Exchanges and money transmitters are dropping like flies lately, think Liberty Reserve and Dwolla.

The challenge of producing high quality open source software (as opposed to just open source software) is figuring out how to make money to pay the bills. I think Ripple did a great job answering this question.

I agree with you. If they included a POW system for people to "earn" their XRP it would just be another distraction and totally unnecessary.

[Este Nuno]

I doubt they expected XRP to be trading at the price that it is now as well. It's pretty amazing actually. I wonder if they have a target price in mind and they'll keep a tight grip on the money supply to control inflation.

[SamS]

POW is the ideal way to distribute coins as it starts everyone off on a level playing field.  yes, you had to know about Bitcoin and "see" it's potential to mine early but that's the way any startup goes.

This is purely subjective. One could say that the XRP pre-mine is the ideal way to distribute coins because it funds the development and marketing of Ripple. Which one is "right?" I don't think there's any correct answer. Neither proof of work nor pre-mining violate the Non-aggression principle so from an ethical point of view they are both acceptable solutions.

I believe that much of the anti-Ripple sentiment comes from the manner in which the XRP are distributed (i.e. the founders and OpenCoin start with all of them). I can relate to this, we're all human after all. But once all the XRP have been distributed or sold does it matter? Ripple is still very functional without having to have your own hoard of XRP. Unlike Bitcoin you will probably have to pay a reasonable fee to create a wallet (since it needs to have XRP reserves). On the other hand you can reap a lot of benefits of Ripple without having a wallet at all thanks to the federation protocol - just open an account at a gateway. You'll need to do that anyway to get money into and out of the system. This is why I keep saying that Ripple and Bitcoin are different and complementary.

If you want to deal purely in cryptocurrency and not interact at all with the fiat world, Bitcoin could be ideal. When you need to interface with other centralized government currencies, use Ripple. When you want to use government money to buy and sell bitcoin, use both.

I think you could argue that Ripple would get funded without a cache of XRP's just as easily. The obvious winners are gateways and exchanges. Each of them would have a profit motive to support development. Then the Ripple team could just charge a transaction fee for using the system, that would allow for a profit motive and VC investment as well. Or they could charge an ongoing Gateway/Exchange fee rather than a transaction fee.

The chosen solution -- we'll distribute the XRP's as we see fit -- seems rather one-sided on its face. Ultimately, I think the idea that the system is distributed by handing out XRP's and spreading the risk so to speak is a chimera. Whether the target is Ripple, the Gateways, or the Exchanges, governments have an easy target to regulate transactions from.

[wingding]

What I find interesting is that bitcoin's economic design (block reward reduction, 21 million, deflationary ect) is probably eventually going to be what ends up causing bitcoin's success or failure. The technology behind bitcoin seems pretty solid at this point, so that's not so much of an issue now. But with ripple, XRP and how they choose to deal with it isn't going to be a critical factor in the success or failure of ripple. Ripple isn't about XRP. XRP is a sideshow which attracts a lot of attention but is ultimately irrelevant in the bigger picture.

What makes bitcoin special and new is the technology. The block reward reduction and limited supply are only parameters. And I think the idea of creating coins fast in the beginning and then more slowly is completely wrong. It drives bitcoin into the domain of pyramid schemes rather than a currency. I do not know if that is what Satoshi wanted, but i believe it was just a bad choice from his/their side.

[misterbigg]

I think the idea of creating coins fast in the beginning and then more slowly is completely wrong. It drives bitcoin into the domain of pyramid schemes rather than a currency. I do not know if that is what Satoshi wanted, but i believe it was just a bad choice from his/their side.

I think that front-loading coin generation creates a "sense of urgency" which stimulates adoption. If the coins were loaded towards the end then most people might take a "wait and see attitude," in which case Bitcoin might have never gotten off the ground.

[N12]

by handing out XRP's randomly and w/o order creates all sorts of distortions.  everyone sees this now.

Indeed. It's already causing a massive bubble where Ripple is valued at a higher market cap than Bitcoin (a ridiculous assumption for an unproven system both technically and legally with near 0 acceptance and usage compared to Bitcoin). They have no planned distribution, and the market doesn't even know the current state of distribution and also lacks a complete picture of past distribution and its rate. How many XRP does OpenCoin still hold? 60%? 95%? 99%? Who knows!

OpenCoin is anything but open, they are completely intransparent about their "monetary policy". I don't know if willfully or out of incompetence, because I'm certain it will end up hurting Ripple.

I think the idea of creating coins fast in the beginning and then more slowly is completely wrong. It drives bitcoin into the domain of pyramid schemes rather than a currency. I do not know if that is what Satoshi wanted, but i believe it was just a bad choice from his/their side.

Ideally, one could have created an S-curve distribution that fits the actual adoption of a technology. However, it's impossible to time it correctly, and the Bitcoin network cannot measure the state of adoption and then speed up its curve.

[colour]

How many XRP does OpenCoin still hold? 60%? 95%? 99%? Who knows!

OpenCoin is anything but open, they are completely intransparent about their "monetary policy". I don't know if willfully or out of incompetence, because I'm certain it will end up hurting Ripple.

I don't think it will ever be possible for Opencoin to prove how many coins they actually gave away. Even if they released a list of all the addresses to which they sent XRP, these addresses could just belong to Opencoin themselves. In order to prove a distribution that would be considered fair by the majority of users, they would have to reveal the identity behind those adresses, which is not going to happen in such a semi-anonymous system. The intransparency is unavoidable, I guess.

[GraphicImpulse]

OpenCoin is linked "for profit" business. The PR that misterbigg displays tell us that this is going absolutely nowhere. I and everyone I know have already unloaded every single ripple. It is a scam.

[N12]

How many XRP does OpenCoin still hold? 60%? 95%? 99%? Who knows!

OpenCoin is anything but open, they are completely intransparent about their "monetary policy". I don't know if willfully or out of incompetence, because I'm certain it will end up hurting Ripple.

I don't think it will ever be possible for Opencoin to prove how many coins they actually gave away. Even if they released a list of all the addresses to which they sent XRP, these addresses could just belong to Opencoin themselves. In order to prove a distribution that would be considered fair by the majority of users, they would have to reveal the identity behind those adresses, which is not going to happen in such a semi-anonymous system. The intransparency is unavoidable, I guess.

I actually didn't realize that. Great point.

[ivanc]

I have a sneaking suspicion TradeFortress, MPOE, and some of the major Ripple detractors may be working in Ripple's favour. Their impact on these forums is may really be a net positive for Ripple, since Katz and Co. clearly have the ability to respond to any questions or legitimate criticisms, and are open to debating Ripple's features.

As a user and entrepreneur who is still fairly new to these modern payment solutions, it's very easy for me to be supportive of Ripple. Meanwhile MPOE and his/her ilk are diminishing my like for Bitcoin ttytt.

Let me tell you, with no disrespect, that if you really were an entrepreneur, you wouldn't be that naive. Those who are buying into Ripple at this premature stage are either the naive/hipster types or the accomplices that Opencoin has managed to buy into the scheme. Once Opencoin releases the full spec and the source code of Ripple, we can start evaluating it and decide what its real value is. Before that, it is just vaporware speculation.

It is a fact that Mircea's arguments sometimes go a bit overboard and the personal accusations (maybe sometimes wrong) should be avoided, but if you can look behind the sarcasm then what you find is simple and basic logic. And guess what, at the end, logic always wins.
Ripple might have bought fanboys and convinced dodgy VCs into the scheme, but it doesn't change the foundations of what it relies on. Their algorithm is flaky to say the least.

I wouldn't go like Mircea and make personal accusations of scam against members of their team, or against the naive types that they have managed to buy out. Surely someone like David Schwartz is not malicious and he's the one being used here, not the scammer. Throughout his posts, he comes accross as a curious scientist eager to explore a novel type of consensus system. Obviously, I wouldn't put the guy who created the card exchange website and who is now fiddling around with VCs in the same category. Both of them surely would like to become richer, however... anyway, back to the argument.

For the lazy types who can't be bothered thinking too much, the reality is as follows: the algorithm that Ripple would like to use for their system has no stable fixed point. Not if it's open source, not if it's honest, not if it's decentralized. It boils down to a deeper and abstract (and unproven) argument, that I'd formally sum up as this: "only Proof-of-work cannot be faked". This, in turn, comes from a deeper and general law of the world we live in, the law of "conservation of energy". For those without any scientific background, this law implies that energy cannot be faked. This is why the consensus system of Bitcoin was made to rely on Proof-of-work (= energy) and nothing else.

Now, if you prefer to believe in the marketing of Ripple rather than the hard facts, logic and mathematics of Bitcoin, it's entirely up to you. I would strongly advise people to let the Ripple developers do their work first though. Until they release a working (and open source) product, as far as I'm concerned Ripple doesn't exist yet.