I apologize if someone has pointed this out already, but...OP, you do realize that Bitcoin and Ripple are entirely different virtual transaction utilities, right? Saying one is better than the other is like trying to explain why apples are better than oranges.
Bitcoin, brilliant in design, sidesteps the need for most of this trust.
Correct, for the most part anyway. Bitcoin was designed as an anonymous P2P system. Anything where a real world identity is unknown or otherwise obfuscated has a greater likelihood for a compromise of trust.
Bitcoin's base value comes from fanboys, folks willing to take a stand for their monetary ideology, but most importantly its usefulness in transactions that can't be done online for legal reasons or when a person would prefer not to reveal their identity. Due to this base value, it has attracted speculators who have driven up its price way beyond its value based on its base uses.
Partially true. Bitcoin (as well as
any niche item/product/tool) starts off as entirely "fanboy" based. As the virtual economy grows, and assuming it gathers attention along the way, so does the community around it. Growth in any financial area (whether commodities, currencies, company stock, etc) always attracts speculators...the same applies to Ripple. People are buying and selling XRP for BTC. Not sure if you knew this or not, but this is called
speculation.
That said, in every day transactions, is it useful or practical for people to exchange their dollars (or other currency), pay 4% to move it to Bitinstant so they can get it into MTGOX, so that they can buy some Bitcoin (another 1/2 % fee), so that they can buy a pizza at their corner store? I'm going to go out on a limb and say "no."
I'm going to go out on a limb here, but that scenario isn't intended for Bitcoin. However, if you change [
a pizza] to [
any non-perishable item] and [
at their corner store] to [
from anywhere in the world, and all anonymously], then I'd say "yes" it is worth it.
Opencoin, Inc., is smart in that they have printed up the currency in their instance of the pre-open source server almost like a stock issue. They have a certain number of shares that they are banking will increase in value, since xrp is the Bitcoin/gold in the Ripple system. They can hand out these "shares" like an IPO without the usual regulatory rigmorole and without having banks in between each transaction. Ingenious in my opinion. However, as mainly a transaction system, the value of the xrp will only increase and be worth something if Opencoin Inc. gains an early mover advantage in the market with their version of Ripple.
I think I have a better system, though it's along the same lines. Hear me out, I promise it's worth while:
What if we had sort of a paper currency..something we could hold in our hands and see with our own eyes? It would have to be distributed though, so I propose some sort of central agency that has all of the currency on reserve, and then from there they distribute it out to various nodes, which in turn come to us. It's an incredible "trust based" system, since trading the currency requires you to have an in-person interaction. In order to keep the currency flowing, we could do favors for each other (like mowing lawns, fixing cars, building computer systems, etc) and we would use this currency to compensate the person doing the work. If we get enough people to jump on this bandwagon, we could create an enormous economy seemingly overnight!
If they succeed then their xrp will be worth quite a bit, in my opinion.
Could be true. I happen to have a few XRP lying around not being used for anything...interested in buying?
Open-source, closed-source. Who cares?
I actually cringed when I read this, and I can tell others did as well. I wasn't cringing so much at the statement, but more at the thought of you losing about 90% of any credibility you had
