PSA: 'Bitcoins' in Ripple are not Bitcoins. They are not real, can be seized.

[🏰 TradeFortress 🏰]

Your balances on Ripple are not real. They don't exist, they never existed in the first place and will never exist. Some people honor their printed Ripple balances, but for how long?

It doesn't have to be malicious by the gateway.

What if the gateway loses all the bitcoins through a natural disaster and a poor back up strategy?

What if the Department of Homeland Security seizes the gateway's stored bitcoins, like what happened earlier?

The answer is.. nothing changes. You never owned anything of existence in the first place.

"We can win a major battle in the arms race and gain a new territory of freedom for several years. Governments are good at cutting off the heads of a centrally controlled networks like Napster, but pure P2P networks like Gnutella and Tor seem to be holding their own." - Satoshi Nakamoto

Napster was a centralized network controlled by one company. It was closed source. You had to trust files that they were legit.

Ripple is a centralized network controlled by one company. It is closed source. You have to trust gateways that they actually pays out.

Bitcoin is an decentralized network, controlled by every peer (that's you) who run Bitcoin and enforces the network rules. It's open source, and you don't have to trust anyone. A bitcoin, is a bitcoin that can't be seized without physical or malware intrusion - because it's enforced by every peer.

History repeats itself. Don't blindly follow Satoshi, but as someone who has created Bitcoin, you have to give their word a moment of thought.

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[QueenElizabeth]

Hang on. How does this work?

If I trust you for 1 trillion BTC you can send them to me even if you don't actually have them in your Ripple account? If that's the case, yes, serious bug; but how come nobody realized?

[Gabi]

What if the Department of Homeland Security seizes the gateway's stored bitcoins, like what happened earlier?

This! Your bitcoin are your only if they are in your wallet!

[🏰 TradeFortress 🏰]

Hang on. How does this work?

If I trust you for 1 trillion BTC you can send them to me even if you don't actually have them in your Ripple account? If that's the case, yes, serious bug; but how come nobody realized?

Because you cannot send anything of value in Ripple. You can only send debt.

Please excuse me for using you as an example, but this is one of the users that OpenCoin Inc has deceived.

[datz]

That is BTC debt.

You could theoretically collect 1 trillion in USD debt and collect that as long as someone lives.

[datz]

Debt is valuable - it all depends on the source.

[🏰 TradeFortress 🏰]

What if the Department of Homeland Security seizes the gateway's stored bitcoins, like what happened earlier?

This! Your bitcoin are your only if they are in your wallet!

If you don't hold the private key, you don't own the bitcoin. The government can seize centralized currencies all they like with a court order, but the government cannot seize your BTCs without showing up to your door at gunpoint and forcing you to delete your wallet.dat.

One is plausible to do en-masse, the other is not.

[🏰 TradeFortress 🏰]

Debt is valuable - it all depends on the source.

Debt is valuable until the DHS starts seizing it.

Do you seriously think that Mt Gox is the last cryptocurrency DHS seize we will see? I'm willing to bet 1:100 on that.

[datz]

Fiat debt is valuable as long as someone thinks it is. Just as BTC is valuable because someone thinks it is. My dirty laundry is valuable if someone thinks it is.

The value of XRP and debt in the Ripple protocol is derived from its effectiveness and advantages as a protocol.

[🏰 TradeFortress 🏰]

Fiat debt is valuable as long as someone thinks it is. Just as BTC is valuable because someone thinks it is. My dirty laundry is valuable if someone thinks it is.

The value of XRP and debt in the Ripple protocol is derived from its effectiveness and advantages as a protocol.

See the part about seizure.

"Bitcoins" in ripple cannot survive in an environment where it is illegal, Bitcoin (although there would be many inconveniences) can.

[datz]

The government can and has seize and seized your "real" US dollars and "real" BTC from Mt. Gox as well.

[datz]

The government can and has seize and seized your "real" US dollars and "real" BTC from Mt. Gox as well.

The government cannot seize debt.

[🏰 TradeFortress 🏰]

The government can and has seize and seized your "real" US dollars and "real" BTC from Mt. Gox as well.

I never claimed my bitcoins in Mt Gox were real bitcoins. They're only real when I see a transaction on the network - the saying, "I don't believe it until I see 6 confirmations"

Explain to me how a government can seize my bitcoins in a Brainwallet without using physical force against me.

The government can seize the backing behind debt (which may turn out to never have existed). Let's get this straight first, do you believe it is much easier for the government to crack down on Ripple balances backed by centralized and legal entities versus real Bitcoin balances on the blockchain?

[datz]

The government can and has seize and seized your "real" US dollars and "real" BTC from Mt. Gox as well.

I never claimed my bitcoins in Mt Gox were real bitcoins. They're only real when I see a transaction on the network - the saying, "I don't believe it until I see 6 confirmations"

Explain to me how a government can seize my bitcoins in a Brainwallet without using physical force against me.

The government can seize the backing behind debt (which may turn out to never have existed). Let's get this straight first, do you believe it is much easier for the government to crack down on Ripple balances backed by centralized and legal entities versus real Bitcoin balances on the blockchain?

Ripple is not centralized - it is actually designed to be a decentralized currency. For the time being I would not load up on BTC debt from untrusted sources which do not follow regulations of the countries they reside in. Nor would I loan my untrustworthy, addict friend $1000.

You are completely correct - the government cannot seize bitcoins in your Brainwallet unless you left any passwords or information unsecured.

The government may seize your hardware, audit and seize any companies holding your bitcoins on a server, and search/seize any written passwords or keys you may have in your possession. The government may seize your freedom. The government may prevent you from ever spending that currency.

[🏰 TradeFortress 🏰]

Ripple was designed to be a decentralized currency, however at the current stage it is centralized. Core network rules were changed at a whim - see the lowered requirements for XRP balances to actually use Ripple.

This would be like Gavin introducing 20 million new coins to Bitcoin, and no, no miner is going to adopt that. Reducing XRP requirements creates new XRPs that may be used in the economy, inflating the currency.

In addition, assuming that we will see a holocaust-like mass imprisonment of Bitcoin users is what I would consider unlikely.

[datz]

Ripple was designed to be a decentralized currency, however at the current stage it is centralized. Core network rules were changed at a whim - see the lowered requirements for XRP balances to actually use Ripple.

This would be like Gavin introducing 20 million new coins to Bitcoin, and no, no miner is going to adopt that. Reducing XRP requirements creates new XRPs that may be used in the economy, inflating the currency.

Let's not bicker. Let's wait it out - 6 more months - and then resume this conversation.

[🏰 TradeFortress 🏰]

Ripple was designed to be a decentralized currency, however at the current stage it is centralized. Core network rules were changed at a whim - see the lowered requirements for XRP balances to actually use Ripple.

This would be like Gavin introducing 20 million new coins to Bitcoin, and no, no miner is going to adopt that. Reducing XRP requirements creates new XRPs that may be used in the economy, inflating the currency.

Let's not bicker. Let's wait it out - 6 more months - and then resume this conversation.

Let's not. When there's a new movie, we don't want 6 months before giving feedback, nor is it a good idea to shelve away discussion because "let's wait it out".

Perhaps you were not aware that Bitcoin was released in an open source state? It's not unfair to expect the same thing from a competitor.

[tclo]

Yeah the whole IOU thing does make me a bit hesitant to embrace ripple more fully.  I'm not sure if this is a drawback,but it's definitely a concern.

[TTBit]

It doesn't have to be malicious by the gateway.

What if the gateway loses all the bitcoins through a natural disaster and a poor back up strategy?

Only trust gateways that are worth trusting. When sending USD, BTC, Credit Card numbers, Social security numbers, etc to a gateway such as MtGox, BTC-E, BitcoinStore.com, Amazon.com, Citibank, you must trust them to be good stewards of your BTC / USD / Credit Card / Data / Products.

Why do you see gateways in ripple differently from a local bank, retaurant, amazon, etc?

[Cryptoman]

Right, you shouldn't keep a lot of Bitcoins as IOUs in Ripple.  However, there's nothing wrong with keeping a minimal amount there, only what's necessary for creating and exchanging IOUs for products or services from merchants.  Let's not ignore Ripple's utility for offloading some of the transaction volume from the block chain.