Ripple - the real Bitcoin competition?

[ElectricMucus]

That "not meant to be a currency" goes for things like trading goods and (third party) services for it, which it really isn't intended to be used for. But intention and outcome often differ, so I wouldn't be surprised if it did.
After all I don't see any mechanism that would prevent that.

I think that must be their goal, how else would their XRP holdings become valuable?

I don't think they would mind that, though I don't think they secretly intend it.
But it can also become valuable by backing in terms of payment for usage of the network, and as currently speculative investment.

I like to think of XRP as kind of a stock which does pay dividends through deflation.

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[moocowpong1]

There is one of the paradox that no one has ever been able to resolve: in order for OCRipple to work, XRP must have both almost no value and also - at the same time - substantial value. I have asked about this many times and never heard a good answer.

Both statements are more or less false. I assume the "almost no value" is so that it's easy for people to create new accounts and process transactions, and the "substantial value" is in order to act as DDOS prevention.

The various reserve requirements are adjustable, so they can remain low no matter what value XRP have. And the expected behavior of transaction fees is the following: typically they will have a very low XRP cost (transactions should be cheap, assuming the network can support it), but during a DDOS they will automatically increase in order to make the DDOS uneconomical. In order to continue the DDOS, they need to keep the network at maximum load as the fees compound – to do this for any extend period would require paying truly extraordinary fees. In the mean time, anybody wanting to use the network will just need to prove that their transactions are more important than the DDOSer's transactions by paying a higher fee than them on *one* transaction. (Rather than the many transaction fees per second the DDOSer is paying.)

What this means is that you will usually only need a very small amount of XRP to use Ripple (leading to a possibly low XRP price overall), but a determined attacker can pay an extraordinary cost in order to make the network temporarily more expensive to use. Remember that if a DDOSer makes it so that getting a transaction through costs a dollar, they're paying for many transactions per second at the same cost, or tens of thousands (hundreds of thousands?) of dollars per hour. If such an event happened over a long period of time, the price of XRP would probably spike as people realized they needed it to send transactions – this is where the apparent paradox of almost no value and substantial value is resolved. However, given the built in cost and lackluster effects of running a DDOS on Ripple, it's hard to imagine that anybody would actually try to do this, and the price of XRP would remain low. The mere presence of this variable XRP transaction cost acts as an effective anti-spam device.

Of course, this has been explained to you before, so I don't expect that you'll be convinced by this repetition of the argument...

[befuddled]

And please don't say something stupid like "This is a good thing, it keeps people honest".

Yeah, what kind of fool thinks there needs to be any honesty in a financial system.

[anti-scam]

XRP is a pre-mined scam. People will not choose slavery.

[zby]

And please don't say something stupid like "This is a good thing, it keeps people honest".

It's not stupid, it's the truth. Yes, irrationality can trigger a stampede, but that will only be a problem for those exchanges that practice fractional reserve banking. Then that is the problem, not the XRP exchange rate, and the offending exchanges will be quickly eliminated, thus solving the problem. I'm not going to hold large sums of money at an exchange, or in the form of IOUs until they have earned my trust, which may take a very long time.

Unless of course the "Good" (non-fractional reserve) gateways had allowed people to redeem IOUs from other gateways before they realized there was run on; in which case their reserves (which includes IOUs from other gateways) are no longer sufficient to cover their own IOUs; despite being 100% funded.

...

How about only letting people redeem IOUs that the gateway can immediately redeem itself?  In a transaction - so that the gateway does not need to take risks - but still accept all kinds of IOUs (that are issued by nodes reachable from it).

[Zangelbert Bingledack]

Ripple is designed to facilitate currency exchange, not product exchange, they aren't meant to be a currency.

Except the core developers and OpenCoin have admitted that XRP is intended to be a currency and they require it to have speculative value so they can fund development selling XRP to the public. Why do you think XRP is not meant to be a currency? Even the official word is that it is meant to be a currency. Ripple supporters are so misinformed its not even funny.

There is one paradox that no one has ever been able to resolve: in order for OCRipple to work, XRP must have both almost no value and also - at the same time - it must have considerable value (to be viable to pay dev team, etc.). I have asked about this many times and never heard a good answer. All signs point to the XRP aspect being tacked on after the fact just as a money maker for OpenCoin, the utility of the system always being second priority. It seems extremely clever in that OC must have known XRP would take on a market value yet they advertize it as essentially worthless so they can look blindsided by the speculative phenomenon. "Oops, we got rich before even releasing our product."

Everything about the entire OpenCoin project just reeks of style over substance and the most brazen sort of milking Fugger's original idea for a chance to be an early adopter in the cryptocurrency realm. "Open" has so far been a lie, even as the creators enrich themselves on no utility provided to the community at all yet, very unlike Bitcoin. And "Coin" is just PR to try to associate itself with proper (mined!) cryptocurrencies, especially of course Bitcoin. It'd be like if Coca Cola tried to make a cryptocurrency system.

Finally, it's not that I begrudge people trying to make a profit. This is capitalism after all. It's just that they have actually put making money first every single time they had an opportunity to do so, even when it has damaged the usability and credibility of the system, seemingly intent on papering over this with a glossy marketing campaign. Of course for all we know they might just never release their product and simply hype it with teasers as they gradually sell off their XRP and ride into the sunset fabulously wealthy.

[Zangelbert Bingledack]

There is one of the paradox that no one has ever been able to resolve: in order for OCRipple to work, XRP must have both almost no value and also - at the same time - substantial value. I have asked about this many times and never heard a good answer.

Both statements are more or less false. I assume the "almost no value" is so that it's easy for people to create new accounts and process transactions, and the "substantial value" is in order to act as DDOS prevention.

I don't think many people familiar with Austrian economics would be convinced that this is possible. It sounds like the central bankers' false belief that they can and should increase and decrease the money supply "as needed." Assuming this is a Hayek vs. Keynes type of issue, which it seems like it is, demonstrating why this can't work like you explained it would take us far afield. But the form of the debate would be familiar to people who are conversant in Austrian economics. Until we or some others have time to go through the whole argument piece by piece while also arguing for and against the possibility and utility of central economic planning, we'll have agree to disagree on this.

However, even before that, the assumption is wrong in the first place: the reason XRP must have substantial value is of course to pay the dev team. This is their actual plan. Everything about it is inconsistent. It takes but a few minutes' thought to see what they're actually trying to do: simply tack a superfluous, utility-reducing get-rich-quick scheme on to the original Ripple idea. Apparently paying off Ryan Fugger not to use the Ripple name anymore just takes the cake as far as co-opting is concerned. Final nail in the coffin if you ask me.

I should add that my opinion really isn't so final IF they actually release something that turns out to be very useful and decentralized. To be perfectly charitable to OC, I should say that I am simply extremely skeptical that they can do this, and the way they are conducting their PR is making it look very fishy to me (and, it seems to me, many or most of the more intelligent members of this forum). I do think, however, that they can convince the masses.

[dave111223]

Another issue; when reading on the Ripple wiki about how to become a gateway i noticed this:

Preparation

    Provide your github ID to OpenCoin to receive access to the rippled source.
    Decide on a fee schedule.
    Have a graphic image, a logo, suitable for registration with gravatar.com
    Numeric representation

https://ripple.com/wiki/Gateway_Integration_Manual#Prerequisites

Does that mean you have to pay Opencoin fees to be a gateway.  If so how does that business model match up with planning to release the source, seeing as once the Ripple system is distributed and opensource Opencoin would have no way to enforce this?

Or maybe I'm misunderstanding and it just means you have to set how much you are going to charge your users...either way I'd like to know if Opencoin collects fees from gateways in order to gain gateway access.

[ElectricMucus]

Another issue; when reading on the Ripple wiki about how to become a gateway i noticed this:

Preparation

    Provide your github ID to OpenCoin to receive access to the rippled source.
    Decide on a fee schedule.
    Have a graphic image, a logo, suitable for registration with gravatar.com
    Numeric representation

https://ripple.com/wiki/Gateway_Integration_Manual#Prerequisites

Does that mean you have to pay Opencoin fees to be a gateway.  If so how does that business model match up with planning to release the source, seeing as once the Ripple system is distributed and opensource Opencoin would have no way to enforce this?

Or maybe I'm misunderstanding and it just means you have to set how much you are going to charge your users...either way I'd like to know if Opencoin collects fees from gateways in order to gain gateway access.

You are misunderstanding correctly.  

The fees are the fees the gateway can decide to collect. As I understand it opencoin receives no fees besides from deflation of XRP.

[dave111223]

So why is it that no one has yet signed up as a gateway and then released (leaked) the rippled source?

[ElectricMucus]

I've got no idea. Perhaps it's just lack of interest.

[BubbleBoy]

What makes you think the source is available to gateways, as opposed to a precompiled binary for your flavor OS ?

[zachcope]

In this forum I Speculate:

Ripple won't be around in 10 years.

Bitcoin will be.

[antimattercrusader]

I am sure it's been said 1000 times... but I don't think ripple has the same "validity" as bitcoin.

Ripple is a innovative concept, IMO, but I don't see it as any better than fiat when considered a currency. With regards to currency itself, what makes Ripple's XRP better than Liberty Dollar or existing things such as Liberty Reserve? (It's trust/IOU/p2p model is interesting though but seems like it might be more equvilent to Paypal than Bitcoin...) At least fiat has a large arsenal of nuclear weapons to force people to support it and to "protect" it. Ripple? not so much.

BTW: Cryptography > Nukes IMO, but Ripple has neither.

[bozak]

Altcoins are not real competition for bitcoin.  They don't provide any substantial advantage over bitcoin - it's all the same digital gold - but Ripple with the distributed clearing house idea is something quite a bit more complex and potentially enabling.  

On the other hand OpenCoin declares to discourage XRP speculating and they have all 100 billion XRPs already created - so it might not gain such notoriety as Bitcoin.

When did they declare that they are discouraging speculating?  I doubt this is true, speculating directly helps the company since they control XRP supply.   

[mmeijeri]

Ripple is a innovative concept, IMO, but I don't see it as any better than fiat when considered a currency.

As a cryptocurrency it's just like BTC, so your claim makes no sense.

With regards to currency itself, what makes Ripple's XRP better than Liberty Dollar or existing things such as Liberty Reserve? (It's trust/IOU/p2p model is interesting though but seems like it might be more equvilent to Paypal than Bitcoin...)

The trust model only applies to fiat IOUs, not to XRP. It adds something that BTC doesn't have yet, a distributed bridge to fiat. And makes it available to BTC too!

BTW: Cryptography > Nukes IMO, but Ripple has neither.

You clearly don't understand Ripple.