HELP: have some difficulties to fully understand Ripple...

[lixiaolai]

One of simplest methods to understand something is to ask "What're the problems it tries to solve?"

It seems to me that Ripple is trying to solve several problems at once:

1. it's trying to complement the lack of credit system in Bitcoin. (the old ripplepay project was designed to give a p2p solution of 'IOU' credit)
2. it provides a p2p exchange solution for bitcoin and fiat currencies. (a seemingly nice solution that bitcoin traders are looking forward to)
3. it introduces xrp, and rendering transition fees subject to a mechanism so that DDoS attacks might well be prevented. (just a theory, needs to be verified)
4. it introduces "ripple gateway", working like VISA/MASTER agent (but need no a unity of various banks, since it is the only bank of p2p currency online?)

but I have many holes that need to be filled:

1. what's the exact role of xrp?
2. now it seems xrp has already held a tremendous value. the price is approching 21million / 100billion，that is, 1BTC is equivalent to 4672 XRP: the price seems now to be about 1BTC = 6000 XRP (May.05). it's a price and market cap that bitcoin has been working so hard to achieve. is it reasonable? what if the XRP price continues to boost, to an extent to which the market cap of xrp exceeds that of bitcoin?
3. XRP is a centralized distributing currency, which is almost certainly subject to inflation, though it is alleged the number of XRP is designed to be fixed. What are its potential effect on bitcoin value?
4. What is the impact of Ripple on existing exchange service provides, such as MtGox?

sorry folks, too many questions. thank you for your time.

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[virtualmaster]

One of simplest methods to understand something is to ask "What're the problems it tries to solve?"

It seems to me that Ripple is trying to solve several problems at once:

1. it's trying to complement the lack of credit system in Bitcoin. (the old ripplepay project was designed to give a p2p solution of 'IOU' credit)
2. it provides a p2p exchange solution for bitcoin and fiat currencies. (a seemingly nice solution that bitcoin traders are looking forward to)
3. it introduces xrp, and rendering transition fees subject to a mechanism so that DDoS attacks might well be prevented. (just a theory, needs to be verified)
4. it introduces "ripple gateway", working like VISA/MASTER agent (but need no a unity of various banks, since it is the only bank of p2p currency online?)

but I have many holes that need to be filled:

1. what's the exact role of xrp?
2. now it seems xrp has already held a tremendous value. the price is approching 21million / 100billion，that is, 1BTC is equivalent to 4672 XRP: the price seems now to be about 1BTC = 6000 XRP (May.05). it's a price and market cap that bitcoin has been working so hard to achieve. is it reasonable? what if the XRP price continues to boost, to an extent to which the market cap of xrp exceeds that of bitcoin?
3. XRP is a centralized distributing currency, which is almost certainly subject to inflation, though it is alleged the number of XRP is designed to be fixed. What are its potential effect on bitcoin value?
4. What is the impact of Ripple on existing exchange service provides, such as MtGox?

sorry folks, too many questions. thank you for your time.

Take care because they are a lot of scam warnings in connection with Ripple and even if you will have the impression that you understand Ripple it will not be the case because it is closed source and centralized so they can make whatever they want with your money if you put it in their network.

[justusranvier]

I took a swing at explaining Ripple here, so I'm just going to link this instead of repeating myself.

http://www.porctherapy.com/2013/05/04/porc-therapy-2013-05-03-live-show/

Skip to 0:43:05 for the discussion about Ripple.

Also this thread should be in Alternate Cryptocurrencies.

[🏰 TradeFortress 🏰]

One of simplest methods to understand something is to ask "What're the problems it tries to solve?"

It seems to me that Ripple is trying to solve several problems at once:

1. it's trying to complement the lack of credit system in Bitcoin. (the old ripplepay project was designed to give a p2p solution of 'IOU' credit)
2. it provides a p2p exchange solution for bitcoin and fiat currencies. (a seemingly nice solution that bitcoin traders are looking forward to)
3. it introduces xrp, and rendering transition fees subject to a mechanism so that DDoS attacks might well be prevented. (just a theory, needs to be verified)
4. it introduces "ripple gateway", working like VISA/MASTER agent (but need no a unity of various banks, since it is the only bank of p2p currency online?)

but I have many holes that need to be filled:

1. what's the exact role of xrp?
2. now it seems xrp has already held a tremendous value. the price is approching 21million / 100billion，that is, 1BTC is equivalent to 4672 XRP: the price seems now to be about 1BTC = 6000 XRP (May.05). it's a price and market cap that bitcoin has been working so hard to achieve. is it reasonable? what if the XRP price continues to boost, to an extent to which the market cap of xrp exceeds that of bitcoin?
3. XRP is a centralized distributing currency, which is almost certainly subject to inflation, though it is alleged the number of XRP is designed to be fixed. What are its potential effect on bitcoin value?
4. What is the impact of Ripple on existing exchange service provides, such as MtGox?

sorry folks, too many questions. thank you for your time.

Ripple is a novel idea, however it takes the concept of web of debt too far. In addition, it is closed source, premined, and currently 100% of the network validators are from OpenCoin Inc (directly or indirectory) which means that they can change the network rules anytime they want, including spending your money.

It is against the concepts of bitcoin - having control over your money with FOSS software.

Check my sig.

[oakpacific]

https://ripple.com/wiki/Consensus According to Ripple wiki, this is how they are going to validate a transaction: by trusting a set  of validators which are not supposed to collude.

If everyone chooses a completely disparate sets of validators the network will be unlikely to reach consensus that a particular version of the ledger is the one true and accurate ledger. But, in practice, people's UNL lists will overlap. This overlap causes the honest validators to come to the same consensus.

This is exactly what I would consider to be a proposal of centralization, in the real world government was usually formed with someone trusted by all closely-knitted groups.

IMHO they simply fail to understand Byzantine Generals problem, Bitcoin works because a miner/validator doesn't know if/when he will come out first in the mining competition so a transaction cannot be maliciously rejected for long unless the malicious actor controls more than 51% of the network hashpower. The Ripple network, otoh, could split easily if two bunches of validators disagree about if a transaction is to be accepted and go political.

[Alex Zee]

1. what's the exact role of xrp?

XRPs both act like a universal denominator to various currencies exchange and a potential future currency in itself.

2. now it seems xrp has already held a tremendous value. the price is approching 21million / 100billion,that is, 1BTC is equivalent to 4672 XRP: the price seems now to be about 1BTC = 6000 XRP (May.05). it's a price and market cap that bitcoin has been working so hard to achieve. is it reasonable? what if the XRP price continues to boost, to an extent to which the market cap of xrp exceeds that of bitcoin?

This is mostly caused by OpenCoin currently being a dysfunctional company. I am trying to figure out the reasons of this, but so far have only few guesses. One probable reason is that they focus too much on coding and not enough on the "business" side of their operation. There is actually a whole set of problems currently, but I'm still hoping things will be fixed soon.

The high price is just a lack of attention on their part to this particular issue too. The market is very thin, so don't draw any conclusions about the whole 100 billion ripples capitalization. There is no sense in comparing it to Bitcoin in that area yet.

3. XRP is a centralized distributing currency, which is almost certainly subject to inflation, though it is alleged the number of XRP is designed to be fixed. What are its potential effect on bitcoin value?

I don't think there's much interconnectivity between Ripple and Bitcoin, unless Ripple will be so effective as to replace Bitcoin completely.

4. What is the impact of Ripple on existing exchange service provides, such as MtGox?

Ugh... Making their life easier?

It's hard to say. If Ripple's internal exchange will be very good then it can either replace services like Mt.Gox or at least significantly transform the way they operate, and what benefits to customers they provide as a service.

[anti-scam]

Ripple is a scam to make OpenCoin rich off of other's evangelism. Luckily for them, it seems to be working.

[Alex Zee]

Ripple is a scam to make OpenCoin rich off of other's evangelism. Luckily for them, it seems to be working.

That's not that simple. Their technological solutions are quite complicated, there were a lot of thinking and coding involved, so it's not a Ponzi scheme, they did some real work and plan to open source it for free, so anyone can easily create competing forks.

So I wouldn't call it a scam - it doesn't look like that.

[anti-scam]

Ripple is a scam to make OpenCoin rich off of other's evangelism. Luckily for them, it seems to be working.

That's not that simple. Their technological solutions are quite complicated, there were a lot of thinking and coding involved, so it's not a Ponzi scheme, they did some real work and plan to open source it for free, so anyone can easily create competing forks.

So I wouldn't call it a scam - it doesn't look like that.

They plan to open source it for free when they are confident that a fork won't be successful (not that it will work). There was a lot of thinking and coding involved (except for how the system could work without a centralized currency), but not enough to be worth every XRP in existence. Is Satoshi's contribution to Bitcoin worth every Bitcoin in existence? It takes a lot of work by many people to make a currency popular. Ripple promoters are basically acting as slave labor on behalf of OpenCoin for a paltry sum of XRP. There are more kids looking to get rich quick than brains in the cryptocurrency community.

[Alex Zee]

Ripple promoters are basically acting as slave labor on behalf of OpenCoin for a paltry sum of XRP. There are more kids looking to get rich quick than brains in the cryptocurrency community.

That is very presumptuous.

Satohi does hold a hell of lot of bitcoins, doesn't he? How OpenCoin's holdings are different?

They maybe waiting to open source to help them secure leadership, but so what? Do you want them instead to work hard and write a complex system and then give it to you for free before themselves? So you can then beat them as a competitor and they are left with nothing? What a nice present that would be.

They work hard, they get rich. Seems fair to me.

[oakpacific]

Seems to me Ripple's greatest weakness is it can be so easily forked. They count on several bunches of non-colluding validators to cooperate to process the transactions, in the real world things never work that way...

[oakpacific]

Ripple promoters are basically acting as slave labor on behalf of OpenCoin for a paltry sum of XRP. There are more kids looking to get rich quick than brains in the cryptocurrency community.

That is very presumptuous.

Satohi does hold a hell of lot of bitcoins, doesn't he? How OpenCoin's holdings are different?

They maybe waiting to open source to help them secure leadership, but so what? Do you want them instead to work hard and write a complex system and then give it to you for free before themselves? So you can then beat them as a competitor and they are left with nothing? What a nice present that would be.

They work hard, they get rich. Seems fair to me.

Satoshi has no capability to create a potentially unlimited amount of bitcoins out of thin air, opencoin, otoh.........

[Alex Zee]

Seems to me Ripple's greatest weakness is it can be so easily forked.

They do have a hefty head start and other advantages. And they rely on a simple fact that once the system is working well, it's much better to join and reap the benefits, rather than compete.

They count on several bunches of non-colluding validators to cooperate to process the transactions, in the real world things never work that way...

What about SWIFT? Several bunches of non-colluding banks in different countries cooperate to process transactions

[Alex Zee]

Satoshi has no capability to create a potentially unlimited amount of bitcoins out of thin air, opencoin, otoh.........

Once the system is distributed they will have no such special powers either.

[oakpacific]

Seems to me Ripple's greatest weakness is it can be so easily forked.

They do have a hefty head start and other advantages. And they rely on a simple fact that once the system is working well, it's much better to join and rip the benefits, rather than compete.

The problem is will there ever be one day the system works well

What about SWIFT? Several bunches of non-colluding banks in different countries cooperate to process transactions

Exactly what I meant, banks/clearing houses suck, that's why Bitcoin was created. And you want to reinvent the wheel by replicating what the banking system has done, playing on their home court, good luck with that.

[oakpacific]

Satoshi has no capability to create a potentially unlimited amount of bitcoins out of thin air, opencoin, otoh.........

Once the system is distributed they will have no such special powers either.

No technical guarantee.

[Alex Zee]

The problem is will there ever be one day the system works well

Well, unless somebody has a crystal ball, nobody knows. We can speculate, but what will actually happen can only be known once it actually happens

Exactly what I meant, banks/clearing houses suck, that's why Bitcoin was created. And you want to reinvent the wheel by replicating what the banking system has done, good luck with that.

You are like a teenage girl at the Occupy Wall Street - shaking here iPhone in anger and shouting how corporations suck.

Do you have any idea how much your life is better because of banks? And to just dismiss them as "banks suck"? What kind of naive "argument" is that?

[Alex Zee]

No technical guarantee.

And you base it on what? Not reading their wiki?

[oakpacific]

The problem is will there ever be one day the system works well

Well, unless somebody has a crystal ball, nobody knows. We can speculate, but what will actually happen can only be know once it actually happens

Exactly what I meant, banks/clearing houses suck, that's why Bitcoin was created. And you want to reinvent the wheel by replicating what the banking system has done, good luck with that.

You are like a teenage girl at the Occupy Wall Street - shaking here iPhone in anger and shouting how corporations suck.

Do you have any idea how much your life is better because of banks? And to just dismiss them as "banks suck"? What kind of naive "argument" is that?

You're nit-picking my words out of context, read what I wrote again. The essence is the banking system at least sucks in some aspects, otherwise Bitcoin would not have been attractive, it has to do certain things many times better to mitigate the sunk costs. Unlike Ripple, which basically tries to go to the bank's home court and play by their rules and hope to win, hmmm....

EDIT: Oh, I forgot, there is one difference between the Ripple and the banking network-your Ripple transaction "contract" is not legally enforceable.

[anti-scam]

Ripple promoters are basically acting as slave labor on behalf of OpenCoin for a paltry sum of XRP. There are more kids looking to get rich quick than brains in the cryptocurrency community.

That is very presumptuous.

Satohi does hold a hell of lot of bitcoins, doesn't he? How OpenCoin's holdings are different?

They maybe waiting to open source to help them secure leadership, but so what? Do you want them instead to work hard and write a complex system and then give it to you for free before themselves? So you can then beat them as a competitor and they are left with nothing? What a nice present that would be.

They work hard, they get rich. Seems fair to me.

Satoshi mined his bitcoins like everybody else. Pre-mined currencies have always failed. XRP will be no different. Ripple as a concept will succeed, but XRP will not. Don't invest any more than you can afford to lose.