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

[Sukrim]

I have to say you are a retard if you keep your bitcoins in a third party service instead of a private key.

From your signature:
http://coinlenders.com/
https://bitfunder.com/
http://coinchat.org/
https://bitmillions.com/

All these services only issue IOUs, never pay directly to your private key (thankfully, otherwise there would be a lot of bitdust and spam in the block chain).

I can and did choose how much I am willing to risk with Bitstamp as you can do implicitly by allowing to let your balances on these services grow to a certain amount before you withdraw. You just have a bit more manual work and less control over the amount of debt you are allowing these services to have towards you (e.g. with Ripple you could limit your exposure towards Bitfunder to 5 BTC max., everything above that gets converted to some other IOUs, with Bitfunder currently you have to take as much debt as they give you).

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[🏰 TradeFortress 🏰]

I have to say you are a retard if you keep your bitcoins in a third party service instead of a private key.

From your signature:
http://coinlenders.com/
https://bitfunder.com/
http://coinchat.org/
https://bitmillions.com/

All these services only issue IOUs, never pay directly to your private key (thankfully, otherwise there would be a lot of bitdust and spam in the block chain).

I can and did choose how much I am willing to risk with Bitstamp as you can do implicitly by allowing to let your balances on these services grow to a certain amount before you withdraw. You just have a bit more manual work and less control over the amount of debt you are allowing these services to have towards you (e.g. with Ripple you could limit your exposure towards Bitfunder to 5 BTC max., everything above that gets converted to some other IOUs, with Bitfunder currently you have to take as much debt as they give you).

BitMillions pays out directly to your address.

 

There's an obvious difference from changing for chips in a casino to use on the service, and keeping your balance in casino chips across the world.

What the fuck do you mean "Bitfunder currently you have to take as much debt as they give you"? They can give me 10000 BTC if they want, if they do then there's zero chance for it to be honored. My Bitfunder IOU does not randomly get exchanged for payb.tc IOUs unlike in Ripple (if I trust them both).

Whereas with Bitstamp, if they gave everyone BTC up to their trust limit, then same thing, there is zero chance for it to be honored. So in either case you just lost all your coins beyond the amount that people is willing to pay for Pirate/Bitcoin24/Bitcoinica/whatever debt (aka nothing).

[Sukrim]

BitMillions pays out directly to your address.

 

So who holds their jackpot then and what does the "waiting" state imply? As long as they don't send back Bitcoins directly using a function of the network itself, they issue IOUs. Maybe for a short amount of time (in BitMillions it seems you can play for multiple rounds), maybe with a limited risk (you only risk the coins you send), maybe not even with a displayed balance but only an implicit version of it. Still, BitMillion can run right now just by refusing to pay out anything they promised to pay. I'd call that an IOU.

There's an obvious difference from changing for chips in a casino to use on the service, and keeping your balance in casino chips across the world.

True, that's why I keep a good part of my BTC in a safe place. The analogy is actually quite good, as you would likely also only want to have chips from 1 or maybe 2 casinos nearby and not some random chips from somewhere in Siberia, even if that was an honest casino over there.

What the fuck do you mean "Bitfunder currently you have to take as much debt as they give you"? They can give me 10000 BTC if they want, if they do then there's zero chance for it to be honored. My Bitfunder IOU does not randomly get exchanged for payb.tc IOUs unlike in Ripple (if I trust them both).

Whereas with Bitstamp, if they gave everyone BTC up to their trust limit, then same thing, there is zero chance for it to be honored. So in either case you just lost all your coins beyond the amount that people is willing to pay for Pirate/Bitcoin24/Bitcoinica/whatever debt (aka nothing).

I the fuck mean that the issue you are referring to (automatic exchange between 2 IOUs of the same currency where one is potentially toxic) is in my opinion a bug (in the sense of that it can't be easily adjusted in the client).
If Bitstamp did that (issue and send huge amounts of IOUs), they would be effectively bankrupt/hacked, I don't see the difference to any other service (including the ones in your signature - this exact scenario actually happend at MtGox btw.) offering fantasy amounts of balance that are not withdrawable. I would try to recover whatever is possible and then move on with my life, cutting the trust line to the bad service.

As long as I don't trust somebody not trustworthy, I have low risks. Feel free to send me any amount of your trillion BTC to my ripple address (it is in the giveaway thread), all I will receive are Bitstamp BTC that I can withdraw or XRP that I can trade.

You only repeat the risk that a gateway is hacked or goes out of order for some reason. I don't see the risk for that happening much higher than any other service in the Bitcoin universe being hacked or closing down in an unorderly fashion. This is not inherent to Ripple at all but simply the risk you cannot avoid, even dealing purely in Bitcoin (just like your BitMillion game that can still steal from you, as there is no enforcable contract in the block chain that will get you your earnings).

[mmeijeri]

It can involve small amounts for short periods or big amounts for long periods. It really depends on how you use it.

Yes, but for the purpose we are talking about it means small amounts and short periods, and then your objections don't apply. I'd advise anyone against transferring large amounts of money through gateways or keeping any non-trivial amount inside the Ripple system for the foreseeable future.

I don't see how XRP is a solution to the trust problem, as it is a premined cryptocurrency controlled exclusively by a private corporation.

Premined is a nonsensical term when applied to XRP, which doesn't have a concept of mining. Investing in XRP right now is very risky, just as BTC was in the beginning. In the longer term that may change, as to a degree it did with BTC.

[misterbigg]

XRP...is a premined cryptocurrency controlled exclusively by a private corporation.

Premined is a nonsensical term when applied to XRP, which doesn't have a concept of mining.

Actually "premined" although something of a misnomer is a very accurate term considering the history of alt-coins. Perhaps a more correct term would be "self-issued." But everyone understands the term pre-mined so its going to be here to stay.

Now XRP is not "controlled exclusively". Once it leaves the hands of OpenCoin they can no longer control it (once the code is open sourced). It is true that for as long as they have most of the XRP in accounts under their control, they can keep the price down by selling.

If the Ripple system consisted only of XRP then I would consider it a useless alt-coin. But Ripple does other things so it may turn out that having all the XRPs self-issued works in the end.

[mmeijeri]

Actually "premined" although something of a misnomer is a very accurate term considering the history of alt-coins.

It's very appropriate for alt-coins, but not for XRP. And even for alt-coins premining doesn't make it a scam, as long as you don't try to mislead people into believing no premining took place.

Perhaps a more correct term would be "self-issued." But everyone understands the term pre-mined so its going to be here to stay.

Sure, but it's still misleading.

If the Ripple system consisted only of XRP then I would consider it a useless alt-coin. But Ripple does other things so it may turn out that having all the XRPs self-issued works in the end.

Not quite useless, because of the faster confirmation and the lower resource requirements. Whether that would be enough to establish a decent market share without the rippling system is an open question. In fact, it's still an open question whether it will even with the rippling system. I'm not investing XRP yet, but I'm using Ripple to buy BTC.

[abrkn]

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[Matthew N. Wright]

XRP are stamps. They're only used for mailing transactions from one location to the other. Guess what their original name was before OpenCoin decided on "XRP"?

Stamps.

[misterbigg]

XRP are stamps.

Even stamps have value. But anyway, XRP is a currency not "just a stamp." I'm not sure why OpenCoin marketed it as just a stamp but it functions as money the same way that Bitcoin does, except that the method of initial distribution is different.

[mmeijeri]

XRP are stamps. They're only used for mailing transactions from one location to the other.

Yeah, but the only thing the anti-Ripple brigade are worried about is that XRP will become more than just stamps, soar in value, displace Bitcoin and make all their BTC worthless. They don't fear XRP will become worthless, they're just trying to scare people into believing that, while they believe or at least fear the exact opposite.

[mmeijeri]

I'm not sure why OpenCoin marketed it as just a stamp but it functions as money the same way that Bitcoin does, except that the method of initial distribution is different.

I'm not sure either, but it's bad marketing if you are addressing Bitcoin enthusiasts, and maybe not such a hot choice if you are trying to coexist with the USG for long enough to get Ripple established.

[misterbigg]

it's bad marketing if you are addressing Bitcoin enthusiasts

Definitely a mistake. I don't think there was any real "grand plan" as much as a handful of programming nerds hacking away for two years. Maybe this is why the wiki is a bit messy.

[Matthew N. Wright]

Definitely a mistake. I don't think there was any real "grand plan" as much as a handful of programming nerds hacking away for two years. Maybe this is why the wiki is a bit messy.

You've just described bitcoin.

[mmeijeri]

Definitely a mistake.

I meant calling it a currency would have been a mistake as it could drive people away. I don't think the anti-Ripple brigade was fooled though, despite their claims.

[misterbigg]

You've just described bitcoin.

Yeah but Bitcoin is orders of magnitude simpler. So documenting it well was easier.

[misterbigg]

Definitely a mistake.

I meant calling it a currency would have been a mistake as it could drive people away. I don't think the anti-Ripple brigade was fooled though, despite their claims.

Well, just my opinion but honesty and clarity is the best policy. If its a currency, then call it that.