Ripple or Bitcoin

[JoelKatz]

First, we didn't reserve the right to print money. 100 billion XRP is all there will ever be, unless in some distant future there's a consensus of validators to change it.

"..., unless in some distant future there's a consensus of validators to change it." is exactly reserving the right to print money.

Umm, sure, reserved to the public at large, not to OpenCoin. If in some far future the vast majority of Ripple users want to modify the system to create more XRP, we can't stop them. But how is that us reserving anything?

I think the critics here are not about a company making profit. I don't think that most people here have problem with a private company issuing a crypto currency to the free market with the intention of making profit.

The critics here are much more about the deceptive propaganda. Like that double-tongued piece above.

Can you be more specific about exactly what you think is propaganda and why? I'm honestly having a hard time understanding what the criticism is.

[JoelKatz]

Maybe in five years, in the middle of some establishment induced crisis, OpenCoin will announce something like that: "The goverment asked us to put some extra XRP into circulation, because of ... the crisis. We will, because of the severe nature of this very surprisingly and unexpected crisis, be responsible and inject xxx RP into the economy to help everyone (and to protect the country/world against this libertarian terrorists)". Satoshi cannot do this.

Satoshi could have done that in the early stages of Bitcoin -- he picked the 21 million number. Ripple is still in those early stages. To the extent that people worry that this will happen, that will be a drag on Ripple adoption which hurts OpenCoin. So we have every incentive to make sure we don't have this kind of control.

[FreeBit]

First, we didn't reserve the right to print money. 100 billion XRP is all there will ever be, unless in some distant future there's a consensus of validators to change it.

"..., unless in some distant future there's a consensus of validators to change it." is exactly reserving the right to print money.

Umm, sure, reserved to the public at large, not to OpenCoin. If in some far future the vast majority of Ripple users want to modify the system to create more XRP, we can't stop them. But how is that us reserving anything?

I think the critics here are not about a company making profit. I don't think that most people here have problem with a private company issuing a crypto currency to the free market with the intention of making profit.

The critics here are much more about the deceptive propaganda. Like that double-tongued piece above.

Can you be more specific about exactly what you think is propaganda and why? I'm honestly having a hard time understanding what the criticism is.

No. It is absoluty clear what I am saying. No need to talk to a public-relation-agent and spend energy on avoiding his rhetoric traps.

[Taz]

Joelkatz,
Thanks for participating here, all the best to opencoin and ripple.
Please realise that few here believe this is a conspiracy, but any reassurances you provide, such as pitch and strategy, wouldn't be unwelcome.

The point of the thread is to figure why Average Jane with no interest in business, politics, economics, programming or anonymity, when investigating this new Ripple craze all the friendly ads are talking about, go even further out of her way to look into this novelty bitcoin money she may or may not have heard is created by drug criminals that are some how tied to lots of people in cyprus losing all their money.

And while your at it please answer this ignorant question. If the government of any country wanted you to freeze peoples accounts until they provided proof of idedntity, can they legally force you to?

[FreeBit]

Joelkatz,
Thanks for participating here, all the best to opencoin and ripple.
Please realise that few here believe this is a conspiracy, but any reassurances you provide, such as pitch and strategy, wouldn't be unwelcome.

The point of the thread is to figure why Average Jane with no interest in business, politics, economics, programming or anonymity, when investigating this new Ripple craze all the friendly ads are talking about, go even further out of her way to look into this novelty bitcoin money she may or may not have heard is created by drug criminals that are some how tied to lots of people in cyprus losing all their money.

ripple/OpenCoin will succeed. Because ripple.com is very cool and functional and a solution to a problem. They will weed out the understanding problems. The aspect of centralized meaning govermental control over the not-going-away-cryptocurrencies, that goes along with it, will not be understood by the (ignorant, stupid, opportunistic, degenerated and submissive) mainstream. Same as ever, including the talking by people like me ...

And while your at it please answer this ignorant question. If the government of any
country wanted you to freeze peoples accounts until they provided proof of idedntity, can they legally force you to?

Of course they can and they will. Maybe not legally in the sense of the US-constitution, but - in my opinion - the patriot act allows that for sure.

Do you really think, OpenCoin will resist to a request from the US-goverment? This would mean to start a revolution and this is not, what investors want. They will never do this. They want to drive around in shiny cars and looking from the point of financial power onto the struggling people in the streets, while enjoying their self-talk about "changing the world into the future."

Conclusion: You can use and you probably will have to use ripple, but you can never ever trust them in way beyond running a functional software system in their own interest.



* They are also preparing a marketing camapaign with cool T-Shirts and stuff like that.

[woodrowchai]

nothing new for ripple.
you can consider USA as ripple.

[JoelKatz]

And while your at it please answer this ignorant question. If the government of any country wanted you to freeze peoples accounts until they provided proof of idedntity, can they legally force you to?

The nightmare scenario would be if, say, some foreign government declares some Ripple account held by someone who has violated that country's laws and insists we freeze that account. They could perhaps bring an action in a United States court or even threaten the lives of OpenCoin employees. If the network was decentralized, we'd have no ability to freeze accounts or make changes except in our own servers, which would just get outvoted by other servers.

[DastanX]

nothing new for ripple.
you can consider USA as ripple.

+1

[misterbigg]

And while your at it please answer this ignorant question. If the government of any country wanted you to freeze peoples accounts until they provided proof of idedntity, can they legally force you to?

The nightmare scenario would be if, say, some foreign government declares some Ripple account held by someone who has violated that country's laws and insists we freeze that account. They could perhaps bring an action in a United States court or even threaten the lives of OpenCoin employees. If the network was decentralized, we'd have no ability to freeze accounts or make changes except in our own servers, which would just get outvoted by other servers.

More likely methods of governmental attack:

Domain seizure: Simply take over the .com, .net, or .org address.

Freeze settlement: Using a court order, prevent gateways from settling / redeeming IOUs back into the banking system for specific individuals.

Surrender private keys: Using a court order, force a gateway to turn over the private keys to their wallet (or go to jail).

As with Bitcoin, the gateways are points of failure although to a lesser degree. But there will always be a "largest gateway", or the gateway that has the largest amount of assets on deposit / IOUs issued. A gateway always exposes a surface against which government force can be used. A government can disrupt gateway activities and cause its IOUs to become worthless. This could cause a loss of confidence in Ripple in general, and a wave of withdrawals, with other gateways going bankrupt or otherwise unable to conduct business. Similar to the recent Bitcoin crash from $266 to $57.

[mmeijeri]

Even without gateways the trust network between individuals could provide a black market between fiat currencies and XRP / BTC even if merchants were forbidden to use XRP / BTC. This would be a very desirable development in say Zimbabwe. It could overthrow the government.

[JoelKatz]

As with Bitcoin, the gateways are points of failure although to a lesser degree. But there will always be a "largest gateway", or the gateway that has the largest amount of assets on deposit / IOUs issued. A gateway always exposes a surface against which government force can be used. A government can disrupt gateway activities and cause its IOUs to become worthless. This could cause a loss of confidence in Ripple in general, and a wave of withdrawals, with other gateways going bankrupt or otherwise unable to conduct business. Similar to the recent Bitcoin crash from $266 to $57.

If you have "one big gateway", it's always going to be a single point of failure. One thing Ripple does to reduce this risk is not allow gateways to freeze individual balances. So if a gateway refuses to redeem for particular people for any reason, so long as they're still in operation generally, those people can exchange balances at that gateway for some other asset. But it's certainly true that some kind of general failure of a major gateway could be a significant blow to the Ripple network. This is one of the reasons we are working to get some gateways going that are operated by regulated and insured financial institutions.

[misterbigg]

If you have "one big gateway", it's always going to be a single point of failure. One thing Ripple does to reduce this risk is not allow gateways to freeze individual balances. So if a gateway refuses to redeem for particular people for any reason, so long as they're still in operation generally, those people can exchange balances at that gateway for some other asset.

I'm talking about the scenario where specific individuals who are citizens of the United States have a blanket ban on deposits to their accounts / frozen accounts. This would affect all gateways which provide settlement via ACH or wire transfer. In theory these individuals could do a cash settlement (gold or fiat). Still, there would be a blow to confidence.

But it's certainly true that some kind of general failure of a major gateway could be a significant blow to the Ripple network. This is one of the reasons we are working to get some gateways going that are operated by regulated and insured financial institutions.

This is definitely helpful but the banking cartel could always use government force / regulatory capture to disrupt the smaller banks. Most likely this will be done under the ruse of preventing money laundering, stopping terrorism, or hindering child pornography. A court order might prevent ACH / wire settlements at smaller depository institutions, creating panic and driving the value of those IOUs to zero. The result would be a flight to the "anointed" banks (Goldman Sachs, JP Morgan, etc...)

Technology works both ways. It allows us to be more productive but it also allows those with a monopoly on the use of force to more efficiently extract output from the rest of the world.

[grondilu]

On ripple.com/bitcoiners I can read:

Decentralized network

Ripple is a distributed network – meaning it does not rely upon one company to maintain and protect the database. This provides two main benefits. First, transaction confirmations happen across the entire network at the same time so no more waiting for block confirmations. Second, because it is a peer-to-peer system, there is no central target or point of failure in the system. This means more stability for the entire BTC community

It's difficult for me to consider this as an honest statement.  The server of the source code has not been published, has it?   Then we are not even sure their method for decentralization actually works.

[JoelKatz]

The server of the source code has not been published, has it?

Not yet, but we have committed to open sourcing it. The reasons it has not been done yet have been discussed extensively.

Then we are not even sure their method for decentralization actually works.

It's documented in the Wiki and we've answered any number of detailed questions about how it works.

[grondilu]

Not yet, but we have committed to open sourcing it. The reasons it has not been done yet have been discussed extensively.

Well, I guess I missed that part.
 

Then we are not even sure their method for decentralization actually works.

It's documented in the Wiki and we've answered any number of detailed questions about how it works.

Sure, but has it been tested??

[JoelKatz]

Not yet, but we have committed to open sourcing it. The reasons it has not been done yet have been discussed extensively.

Well, I guess I missed that part.

Once the server is open source, we expect a large number of people to start running the server. As they build trust networks and the system becomes decentralized, we will have to establish a consensus before we can make any change that affects how transactions are processed. By intentional design, the system, once distributed, is very hard to change so that people can rely on it doing what they expect it to do. Right now, we are adding new features rapidly and occasionally fixing bugs that affect transaction processing. Once the server is open sourced, the deployment schedule will have to slow down dramatically.

The design isolates those portions that do require consistency (how the set of accepted transactions affects the construction of the next ledger) from those portions that don't (such as interactions with clients, pathfinding, most of the consensus process) so that as much of the code as possible can be changed and improved without requiring universal agreement. This is much the same as the way Bitcoin works -- you can change the RPC commands you support, the way blocks are stored locally, how you form your own transactions, and so on, without needing community agreement. But any change on the affects of a transaction or any case where you accept as valid a transaction everyone else would reject requires a community consensus, deployment of the new code to everyone, selecting a point at which the feature is enabled, and so on.

Then we are not even sure their method for decentralization actually works.

It's documented in the Wiki and we've answered any number of detailed questions about how it works.

Sure, but has it been tested??

The algorithms have been tested in simulation under various conditions including large networks with realistic path latencies. The implementation has been tested in test networks and is currently running the live network. It hasn't been tested on thousands of nodes on multiple continents, so there's always the possibility of growing pains. Having our implementation massively tested at no cost to us is another incentive for us to open source the server as soon as possible. Finding and fixing any growth issues sooner rather than later is also a priority.

[pa]

I've been playing around with Ripple over the past day. It's an amazing system and I think I see how it could help revolutionize payment and also create a decentralized exchange. But one concern I have is about privacy. If my wallet will eventually contain information about everyone I "trust" and how much I "trust" them, I don't want that becoming public. Who would have access to this information?

[misterbigg]

I've been playing around with Ripple over the past day. It's an amazing system and I think I see how it could help revolutionize payment and also create a decentralized exchange. But one concern I have is about privacy. If my wallet will eventually contain information about everyone I "trust" and how much I "trust" them, I don't want that becoming public. Who would have access to this information?

Well the ledger contains the state of the entire system, including every account balance, every offer in the every order book, every contract, and every trust line by every person. In short, the ledger contains everything with the exception of the labels that you give to your contacts (those are kept in the encrypted wallet blob).

But they are not heavily promoting the concept of self-issued credit networks between light weight peers. The vast majority of users will have exactly one trust line, to the gateway of their convenience. Extending trust to multiple gateways can create a situation where payments can be routed "through" you, causing your IOU balances to fluctuate without your explicit action (although the sum of your balances would remain the same).

There is no way for trust relationships to be kept private - the client software needs this information in order to calculate paths.

[SwannyMatt]

Pardon my ignorance as I try to wrap my head around Ripple, but couldn't it just use BTC instead of XRP? How would it not work as well? Is the only reason for it not working as well with BTC is that Opencoin wouldn't have a stock of XRP to hand out to promote the system? If that's the only case it doesn't sound like a good reason. If so I would assume that as soon as Ripple becomes open source a fork would be created with people opting to prefer their "free-ish" transaction fee be denominated in BTC as opposed to XRP?

[mmeijeri]

It should make it easier for them to get funding, which should help with development, publicity and ecosystem building. It would also allow them to stabilise the exchange rate to a degree, which could help enormously. I've heard that's what they're doing, but I don't know if they've made any official statements about it.