Ripple SCAM: You *do not* own BTC or USD, you own debt that will collapse

[🏰 TradeFortress 🏰]

Because Ripple lets you send debt.

You can't send a BTC through ripple. You can send a "user rEckWuf927y3fu9 promises to pay 1 BTC when you redeem this coupon" BTC through Ripple.

Ripple is closed source and centralized, and as it is debt based you are going to end up seeing your "money" and "bitcoins" disappear as the debtors default.

What happens when user rEckWuf doesn't honor the BTC debt he sent? Dominios collapse. People who have trusted people who have trusted people who have trusted [..] people who have trusted rEckWuf is out of their coins - this is because of their literally infinite "web of debt" system. There's a reason why WoT works with trust, not debt.

Even if you trust people you know in life, if they trust people who either trusted someone that defaults, or trusts someone that either trusts someone who defaults or trusts someone that either [..]

and here you can see a sufficient enough default will end up with all "USD", "EUR", "BTC" vanished into thin air. Seriously, it is a disaster waiting to happen.

[1715203046]

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[1715203046]

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[🏰 TradeFortress 🏰]

Updated title.

[manface]

It is based on human trust. Seems ridiculous to me as you can invent USD amounts that you have.

[zby]

I guess there will be cases like this - when people default and cause others to default, but it is easy to isolate yourself - you just need to limit the debt amounts of your friends that you are willing to cover (and choose your friends wisely).

But I think that the Ripple guys do need to think a bit more about defaults and setting up new accounts in the network.

[crazy_rabbit]

I'd use it to owe people beer. Not a house.

[dadrizforshizz]

people are paying good bitcoins for ripples and getting ripped off in the process (pun intended? lol)

[cdog]

Ripple will fail because $1 in debt is not worth $1, its worth less.

[TTBit]

Ripple will fail because $1 in debt is not worth $1, its worth less.

With this logic, paypal wouldn't exist, because $1 in my pocket is worth more than $1 at paypal. Paypal exists because there is utility in moving that $1 when physical transfer is not practical.

[dchapes]

Ripple will fail because $1 in debt is not worth $1, its worth less.

I've heard you repeat that false analogy before. You clearly have no clue about Ripple. The original classic.ripplepay.com has been functioning successfully for years. If you don't like it then don't use. The rest of us will move forward.

[dchapes]

With this logic, paypal wouldn't exist, because $1 in my pocket is worth more than $1 at paypal. Paypal exists because there is utility in moving that $1 when physical transfer is not practical.

For that matter, neither would banks. Your bank balance is the amount your bank owes you. Your balance at MtGox is the amount they owe you. Gift certificates are merchandise owed. Pre-paid credit cards are an IOU. Etc.

[TTBit]

I don't see this "domino" effect taking place, at least not anymore chance than currently exists. Bitstamp could be issuing IOUs in ripple and secretly using specie on the side. However, they don't need ripple to do this. They could have less USD or BTC than they have in customer accounts, hoping there will never be a run.

In fact, wouldn't ripple help prevent this? Their ripple address balance is public information, customer account balances are not. If I tally their ripple address info and it comes to $4.3 billion, I might suspect something and take delivery of my USD and BTC.

[mr_random]

There's a lot of reasons why I don't like ripple.

• It's closed source
  
• It's too centralised
• The founders have hoarded 100 billion XRP
• Too complicated

If people find Bitcoin too complicated they haven't got a hope in hell of wrapping their head around Ripple.

[dchapes]

• It's closed source

For good and obvious reasons until their out of beta and stable.

• It's too centralised

The whole point of this implementation of Ripple is decentralization. Once it's out of beta OpenCoin won't control the servers anymore and it will be as decetralised as bitcoin.

• The founders have hoarded 100 billion XRP

This is not true in the way you state it. They made 100 billion XPR. They gave away some large percent to the founders; some large percent they'll keep for future use; and the lions share they'll continue to give away. If you don't like that (I'm not pleased with some of the details of the give-away so far) then either don't use the Ripple system or just use the amount of XRP you got from the give-away and never buy or sell any. The give-away on this forum started with ~50,000 XRP and is now down to ~20,000XRP. A life supply of XRP is probably 1000 to 2000 for most people. Personally I don't give a shit what the price of XRP is and if the founders or OpenCoin makes money with it, as long as the system remains cheap enough for new users. (And the XRP needed for reserves and transactions can be lowered by consensus of the network if XRP somehow becomes expensive, the network would want to do that as a network too expensive to use benefits no one).

• Too complicated

This is probably your only valid point. The whole idea of money, fiat, currency exchange, loans, interest rates, inflation, deflation, etc is too complicated for most people. Yet somehow they use money. Some people can't manage Paypal; Ripple may not be for them.

If people find Bitcoin too complicated they haven't got a hope in hell of wrapping their head around Ripple.

And yet bitcoin is doing fine with not everyone understanding it. A lot of Ripple is simpler, more like Paypal, once you start to use it. Once clients evolve it should be easier. It would be easy for someone to write a client that hides all the details and just gives a "send grandma money" button (okay, a bit more complicated, but you get the idea). The current UI has problems but I get the impression a lot more effort is being expended (rightly so) on the back-end rather than the client at this time.

[grue]

• It's closed source

For good and obvious reasons until their out of beta and stable.

and what are they trying to accomplish by doing that? security through obscurity? bitcoin is still beta, but it's open source as well.

[glitch003]

• It's closed source

For good and obvious reasons until their out of beta and stable.

and what are they trying to accomplish by doing that? security through obscurity? bitcoin is still beta, but it's open source as well.

No, they want a monopoly on it and if they release the source than people will fork it and make it better.  They want to retain control.  If this prospect sits uneasy with you, it should.

There is no other reason for them to keep it closed source right now.  They paid good money for it, and they want to make money off of it, and if it's forked, their little plan of eventually selling 20 billion XRP that they kept for themselves is in trouble.  Ripple is a get-rich-quick scheme for the creators.  It should be obvious at this point.

Imagine what people would be saying if satoshi premined 1 mil BTC before he released the client.  This is the situation that Ripple is in, and this is why Ripple is clearly a scam.


If you like the idea of Ripple, then please, create your own version if it.  It obviously has utility.  But don't use this corporate crap.  We need a community effort, not a bunch of business people trying to make a quick buck.

[manface]

• It's closed source

For good and obvious reasons until their out of beta and stable.

and what are they trying to accomplish by doing that? security through obscurity? bitcoin is still beta, but it's open source as well.

No, they want a monopoly on it and if they release the source than people will fork it and make it better.  They want to retain control.  If this prospect sits uneasy with you, it should.

There is no other reason for them to keep it closed source right now.  They paid good money for it, and they want to make money off of it, and if it's forked, their little plan of eventually selling 20 billion XRP that they kept for themselves is in trouble.  Ripple is a get-rich-quick scheme for the creators.  It should be obvious at this point.

Imagine what people would be saying if satoshi premined 1 mil BTC before he released the client.  This is the situation that Ripple is in, and this is why Ripple is clearly a scam.


If you like the idea of Ripple, then please, create your own version if it.  It obviously has utility.  But don't use this corporate crap.  We need a community effort, not a bunch of business people trying to make a quick buck.

I agree. The fact these guys have centralized it and created so much currency for themselves screams of get rich quick. Not to mention a digital currency system based around human trust in tenuous at best.

[misterbigg]

When you deposit money at MtGox, you are given USD IOUs. When you buy Bitcoins using those IOUs on the MtGox exchange, you are given BTC IOUs. When you redeem your USD or BTC IOUs at MtGox, you get USD or BTC. Ripple functions identically.

[manface]

When you deposit money at MtGox, you are given USD IOUs. When you buy Bitcoins using those IOUs on the MtGox exchange, you are given BTC IOUs. When you redeem your USD or BTC IOUs at MtGox, you get USD or BTC. Ripple functions identically.

Except everyone and anyone is a mtgox and can invent their earnings in Ripple.

Just because one major bitcoin player (mtgox) takes a lot of trust doesn't mean everyone should have that level of trust. Bitcoinica, Pirate, Mybitcoin, etc are going to look like dice in the alley operations compared to what is possible in Ripple if it takes off.

[misterbigg]

Except everyone and anyone is a mtgox and can invent their earnings in Ripple.

As is stated in the Ripple wiki, only trust issuers whose IOUs feel that you can depend on. I certainly won't be extending YOU any trust for your "manface coins."

Just because one major bitcoin player (mtgox) takes a lot of trust doesn't mean everyone should have that level of trust. Bitcoinica, Pirate, Mybitcoin, etc are going to look like dice in the alley operations compared to what is possible in Ripple if it takes off.

I agree. That's why in Ripple, you set the trust relationship manually for every entity. More than likely, people will have just one trust line to the most convenient gateway. Keep in mind that people already do this now - they trust their bank with their checking account and/or savings account.

If you don't trust anyone, you can simply hold your assets in Bitcoins, XRPs (if you trust the Ripple source code), and/or precious metals.

[manface]

Except everyone and anyone is a mtgox and can invent their earnings in Ripple.

As is stated in the Ripple wiki, only trust issuers whose IOUs feel that you can depend on. I certainly won't be extending YOU any trust for your "manface coins."

Just because one major bitcoin player (mtgox) takes a lot of trust doesn't mean everyone should have that level of trust. Bitcoinica, Pirate, Mybitcoin, etc are going to look like dice in the alley operations compared to what is possible in Ripple if it takes off.

I agree. That's why in Ripple, you set the trust relationship manually for every entity. More than likely, people will have just one trust line to the most convenient gateway. Keep in mind that people already do this now - they trust their bank with their checking account and/or savings account.

If you don't trust anyone, you can simply hold your assets in Bitcoins, XRPs (if you trust the Ripple source code), and/or precious metals.

So what sort of regulations must a ripple gateway have compared to a legal bank in a country? None. Case closed.

Like I said people can invent their earnings and con people with no problem. In Bitcoin I can't con you that I have 20 million Bitcoins, it's easy to confirm. In Ripple I can save I have 20 billion USD and some people may believe me as there is no way to confirm it. If people think Bitcoin scams are a problem Ripple is going to magnify them 100x.