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

[btbrae]

I'm not really sure I support Ripple. I like the idea of a p2p trust network. I'm not sure Ripple fills that criteria as XRP is controlled by a central authority, who can print it at will or on a whim in the future with unforetold consequences. It puts a bad taste in my mouth like it would if Ben Bernanke were coding the Bitcoin client.

Obviously there will be some argument against this that I've probably already read but not taken in properly so anyone that can clarify feel free.

[misterbigg]

XRP is controlled by a central authority, who can print it at will or on a whim in the future

So far there is no evidence that OpenCoin can create additional XRPs above the 100 billion that already existed in the genesis ledger.

[mr_random]

XRP is controlled by a central authority, who can print it at will or on a whim in the future

So far there is no evidence that OpenCoin can create additional XRPs above the 100 billion that already existed in the genesis ledger.

I am guessing since they decided to award themselves 80% of that 100 billion they can do whatever they see fit.

[LeTanque]

I am guessing since they decided to award themselves 80% of that 100 billion they can do whatever they see fit.

OpenCoin securing ~20% for development is the reason Ripple will be more successful. They address some of the problems with bitcoin, while supporting bitcoin at the same time.

Here are some of the problems with bitcoin that OpenCoin fixes: development hinges on donations. This means fewer devs, less dev attention, fewer strategic partnerships, no marketing budget, virtually no support.

You know what they say, it takes money to make money.

What the world needs is a decentralized currency and a better way to use money digitally. OpenCoin will get us there, the fact that they will profit along the way is inconsequential.  OpenCoin doesn't even take a transaction fee, they are creating a system that will eventually be "let loose in the wild" and it fixes some huge problems... at like zero cost to the end user.

It's a win-win for business and consumer.

[misterbigg]

I am guessing since they decided to award themselves 80% of that 100 billion they can do whatever they see fit.

Do you understand the protocol as described in the wiki? There's no way to create XRPs. They exist only because of the initial balance in the genesis ledger.

[🏰 TradeFortress 🏰]

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.

There's a difference between $0.999 worth of debt and $0.80 worth of debt.

I am guessing since they decided to award themselves 80% of that 100 billion they can do whatever they see fit.

Do you understand the protocol as described in the wiki? There's no way to create XRPs. They exist only because of the initial balance in the genesis ledger.

That is because the developers chose to give themselves the ripples. They could easily have distributed the XRPs in a fair way or create them in advance, but they chose not to because they want 50 billion XRPs.

[🏰 TradeFortress 🏰]

I am guessing since they decided to award themselves 80% of that 100 billion they can do whatever they see fit.

OpenCoin securing ~20% for development is the reason Ripple will be more successful. They address some of the problems with bitcoin, while supporting bitcoin at the same time.

Here are some of the problems with bitcoin that OpenCoin fixes: development hinges on donations. This means fewer devs, less dev attention, fewer strategic partnerships, no marketing budget, virtually no support.

You know what they say, it takes money to make money.

What the world needs is a decentralized currency and a better way to use money digitally. OpenCoin will get us there, the fact that they will profit along the way is inconsequential.  OpenCoin doesn't even take a transaction fee, they are creating a system that will eventually be "let loose in the wild" and it fixes some huge problems... at like zero cost to the end user.

It's a win-win for business and consumer.

Let's enforce a tax of 20% on all bitcoin transactions! Nobody will help develop bitcoin without that tax!

Well, you are wrong. It's not a win win, it's a win for ScamCoin Inc, a lose for everyone who get suckered in thinking that they have "USD" or "BTC" when in fact they don't own those currencies, only debt.

Bitcoin businesses, adopters and users have an incentive to contribute to bitcoin. And OpenCoin is keeping 50 billion, not 20 billion.

[nameface]

And OpenCoin is keeping 50 billion, not 20 billion.

The original dev team is keeping 20B XRP, OpenCoin is distributing 50B and keeping 30B.

Ripple is mostly just a payment processing system. It's the paypal killer that bitcoin is not. Worried you'll miss the boat on soaring XRP value? Buy a few. You're worried their credit system is wonky? Then wait 5 years and judge it then because it's not important right now.

Ripple is a big vision and misterbigg gets it and he's totally pwning all ye trolls, sry.

[🏰 TradeFortress 🏰]

And OpenCoin is keeping 50 billion, not 20 billion.

The original dev team is keeping 20B XRP, OpenCoin is distributing 50B and keeping 30B.

Ripple is mostly just a payment processing system. It's the paypal killer that bitcoin is not. Worried you'll miss the boat on soaring XRP value? Buy a few. You're worried their credit system is wonky? Then wait 5 years and judge it then because it's not important right now.

Ripple is a big vision and misterbigg gets it and he's totally pwning all ye trolls, sry.

I don't waste time with people who pull the troll card. Learn what a troll actually is.

[virtualfaqs]

I don't mind people posting their opinion on what they don't like about Ripple, but please stop posting misinformation. It gives people like me who are trying to figure out what the hell Ripple is a headache.

[🏰 TradeFortress 🏰]

I don't mind people posting their opinion on what they don't like about Ripple, but please stop posting misinformation. It gives people like me who are trying to figure out what the hell Ripple is a headache.

Point out the "misinformation" please.

[qxzn]

Can somebody explain to me why I want to use ripple? Or is it to early to be practically useful in any way yet?

I know why I like to use BTC: I'm in control of my own money, it can't be inflated, cheap transactions (though I understand it might not stay that way), international transactions, trust-free system.

In fact, bitcoin is pretty close to everything I want out of money. Why do I want to use ripple, again?

And does anyone use ripple for anything practical yet?

[🏰 TradeFortress 🏰]

Can somebody explain to me why I want to use ripple? Or is it to early to be practically useful in any way yet?

I know why I like to use BTC: I'm in control of my own money, it can't be inflated, cheap transactions (though I understand it might not stay that way), international transactions, trust-free system.

In fact, bitcoin is pretty close to everything I want out of money. Why do I want to use ripple, again?

And does anyone use ripple for anything practical yet?

It's useful for this, lol https://bitcointalk.org/index.php?topic=147155.20

[mmeijeri]

In fact, bitcoin is pretty close to everything I want out of money. Why do I want to use ripple, again?

To exchange between BTC and fiat currencies. It's the killer app for Bitcoin enthusiasts.

[qxzn]

In fact, bitcoin is pretty close to everything I want out of money. Why do I want to use ripple, again?

To exchange between BTC and fiat currencies. It's the killer app for Bitcoin enthusiasts.

Can you explain more? So ripple is like Mtgox? I can wire cash to a bank somewhere and get BTCs in return?

[🏰 TradeFortress 🏰]

In fact, bitcoin is pretty close to everything I want out of money. Why do I want to use ripple, again?

To exchange between BTC and fiat currencies. It's the killer app for Bitcoin enthusiasts.

Can you explain more? So ripple is like Mtgox? I can wire cash to a bank somewhere and get BTCs in return?

Ripple is made up of two parts really:

1) the XRP (ripple units) part
It fails because it is 100% premined and is under a 51% attack from the founders, but there is the advantage of faster transaction times. All it needs is PoW and no premining, however the Ripple developers do not wish to release the source code for others to contribute and make forks of it.

2) the exchange part
Where you can exchange debt in exchange for other debt or XRPs. It works as long as no gateway collapses.

[mmeijeri]

Can you explain more? So ripple is like Mtgox? I can wire cash to a bank somewhere and get BTCs in return?

With Ripple, you can transfer two kinds of things: Ripples (XRP) and IOUs in any real or virtual currency. The system keeps perfect track of those, but to make payments you have to find someone who is willing to accept them in payment. This is the same as with Bitcoin. Trading in real world currencies is made easier by the existence of gateways like Bitstamp. You can send USD to Bitstamp in a number of ways and you can then send that money to Ripple in the form of Bitstamp-flavoured USD IOUs. Those IOUs in turn can be sent back to be redeemed for real USD by Bitstamp. People who trust that Bitstamp will redeem its IOUs for real dollars, will then accept the IOUs as payment. They indicate that trust by granting Bitstamp a certain credit limit within the Ripple system.

The same thing works without gateways: if you want to make a payment to someone you don't know, then Ripple will try to find a path between you and the receiver in the trust graph. If that person is a friend of a a friend of a friend, and if credit limits and balances along the path allow it, the transfer of IOUs will be made. Each person can settle with their direct neighbours at the end of the month, or whenever they please. In fact, this uses the exact same system as in the example with the gateway, the gateway is merely acting as a professional "friend" of both you and the receiver, thus making you friends of a friend.

To avoid getting scammed, a gateway will not reciprocate the trust and will only issue IOUs for money it has already received from you. It depends on its reputation to get people to buy its IOUs. And since the Ripple system has a built-in exchange, complete with order book, you can even trade IOUs denominated in the same real or virtual currency but issued by different gateways, or even just check the exchange rate to see whether people in the network believe the gateway is credit worthy.

You have to get used to the idea before you really get it, but it's perfectly natural. And it turns out it's no more than a digital form of the system that was used in the 17th and 18th centuries: Ripple, or Bills of Exchange 2.0.

[qxzn]

Can you explain more? So ripple is like Mtgox? I can wire cash to a bank somewhere and get BTCs in return?

With Ripple, you can transfer two kinds of things: Ripples (XRP) and IOUs in any real or virtual currency. The system keeps perfect track of those, but to make payments you have to find someone who is willing to accept them in payment. This is the same as with Bitcoin. Trading in real world currencies is made easier by the existence of gateways like Bitstamp. You can send USD to Bitstamp in a number of ways and you can then send that money to Ripple in the form of Bitstamp-flavoured USD IOUs. Those IOUs in turn can be sent back to be redeemed for real USD by Bitstamp. People who trust that Bitstamp will redeem its IOUs for real dollars, will then accept the IOUs as payment. They indicate that trust by granting Bitstamp a certain credit limit within the Ripple system.

The same thing works without gateways: if you want to make a payment to someone you don't know, then Ripple will try to find a path between you and the receiver in the trust graph. If that person is a friend of a a friend of a friend, and if credit limits and balances along the path allow it, the transfer of IOUs will be made. Each person can settle with their direct neighbours at the end of the month, or whenever they please. In fact, this uses the exact same system as in the example with the gateway, the gateway is merely acting as a professional "friend" of both you and the receiver, thus making you friends of a friend.

To avoid getting scammed, a gateway will not reciprocate the trust and will only issue IOUs for money it has already received from you. It depends on its reputation to get people to buy its IOUs. And since the Ripple system has a built-in exchange, complete with order book, you can even trade IOUs denominated in the same real or virtual currency but issued by different gateways, or even just check the exchange rate to see whether people in the network believe the gateway is credit worthy.

You have to get used to the idea before you really get it, but it's perfectly natural. And it turns out it's no more than a digital form of the system that was used in the 17th and 18th centuries: Ripple, or Bills of Exchange 2.0.

Thank you for the detailed response. I'm going to sound repetitive, and I hope I don't frustrate you, but I'm still trying to put my finger on a reason I should want to use ripple.

In terms of buying bitcoins; it sounds like it's just about the same user experience, maybe a little more complicated. I guess I'll stick to mtgox.

And what need have I for IOUs when I can just as easily pay/receive real value in the form of bitcoins? It seems like an IOU is only useful when you're broke, or you've mismanaged your cash flows and need to borrow. And in that case, why not just borrow some bitcoins directly?

Are you using ripple for any kind of commerce / financial activity? What for?

[mmeijeri]

In terms of buying bitcoins; it sounds like it's just about the same user experience, maybe a little more complicated. I guess I'll stick to mtgox.

It will be a distributed exchange, and therefore much more resistant to DDoS or government shutdowns than Mt Gox.

And what need have I for IOUs when I can just as easily pay/receive real value in the form of bitcoins? It seems like an IOU is only useful when you're broke, or you've mismanaged your cash flows and need to borrow. And in that case, why not just borrow some bitcoins directly?

Traditional electronic fiat currencies are IOUs too, you have to trust that your bank will redeem your balance in real dollars. An electronic ledger is no more than a record, it cannot enforce settlement in a real world currency. When you trade BTC for USD on Mt Gox you are effectively trading Mt Gox issued BTC IOUs for Mt Gox issued USD IOUs.

One of the interesting things about Ripple is that it allows you to specify explicit trust lines. All nodes you can reach through these lines can pay you and you can pay them, and you don't need any banks or governments to do it. Each party settles with his or her direct neighbours periodically, in whatever form is convenient. As adoption increases, you'd have to settle less and less frequently, because more and more companies would accept payment through Ripple.

I expect Ripple to become more reliable, resilient, anonymous and liquid than Mt Gox.

Are you using ripple for any kind of commerce / financial activity? What for?

Just playing around with it for now. If I'm going to buy any new BTC, it's likely going to be through Ripple. I won't hold large amounts of XRP or IOUs in the Ripple system until after the code is open sourced, gateways have proven their creditworthiness and many others than OpenCoin are running validators.

[ihsotas]

Question -- so am I correct in thinking that Ripple allows you to send XRP alone through the system, while it does NOT mediate sending BTC through the system, but only BTC IOUs that have to be sent separately (off-network) through the transacting gateways?