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

[luv2drnkbr]

Uhhh, no shit Sherlock..??

[johnyj]

Ripple just sounds too complex to be widely accepted, I believe most of the people's IQ are capable of understanding the main benefit of bitcoin, but not ripple

Debt is slavery, this is another negative advertisement effort from ripple's IOU

[🏰 TradeFortress 🏰]

Uhhh, no shit Sherlock..??

Ask some Ripple users, I bet more than half don't know the difference, and it's OpenCoin Inc's fault for not stating it obvious enough.

[HurtK]

http://i.minus.com/jbdWLPldfrGiSr.PNG

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?
...

mayby you should explain why you are paying thousands of dolars to people on this forum to say ripple is scam before we start taking you are saying seriously

[🏰 TradeFortress 🏰]

Because I think Ripple is a scam?

From analytics and research a lot of people are taking me & ripplescam.org seriously on top of those that hard already figured out ripple is a scam themselves

I can find you more quotes if you'd like:

Ripple is not a scam, but my contentions with Ripple are the following:

1) It is closed source. Yes it might open in the future, but until then, my contention stands. The point of cryptocurrencies is that you don't have to trust any single person or group. Right now, everyone using Ripple has to trust the team at OpenCoin.

2) It is centralized.  Yes it may become decentralized in the future, but until then, my contention stands. It is not trust of the OpenCoin team which worries me here, it is the fact that they are the single point of failure. They could be shut down tomorrow a la egold. If Bitcoin had been as centralized as OpenCoin when it was getting started, the Government would've arrested and shut down the project long ago.

3) Ripple does not allow users to send "every kind of currency." Ripple is marketed as better than Bitcoin because it can "send any kind of currency." This is not true. It sends IOU's around, which are created out of thin air. The asset - the currency unit itself - is not transferred via Ripple. Sure you can sell a Bitcoin on Ripple for a USD, but then do you have the USD? No, it rests with a gateway somewhere. To actually get it, you're back in the normal banking system just as if you had traded BTC for USD on an exchange. Ripple can only transfer one asset - XRP's - everything else is a debt that must be fulfilled and transferred by someone else. There are numerous liability/risk issues with a payment system that relies on trust, in this case you need to trust "gateways" with the currency units that Ripple claims you own.

4) Issuance of XRP's is left to the whims of men. I do not care that OpenCoin will keep X number of XRP and thus get wealthy if it takes off. That's fine. My problem is that the XRP's which are supposed to be distributed have no planned distribution model. It's basically "we'll give it to our friends" approach. The problem here is that when and where they will be given is unknown, which causes considerable economic supply concerns. We all know how many Bitcoins there are in the wild, we have no idea with Ripple. 100 billion were created, and some number between several million and 99 billion is currently in circulation. To the extent that OpenCoin can issue, at whim, tranches of new XRP's into the market, it is no more attractive to me as a money system than any central bank.

5) The security model of Ripple is untested. This isn't OpenCoin's fault... it just means that Ripple has not been exposed to the wild in the same way that Bitcoin has for four years. Ripple needs to earn credibility with time in the wild. A number of people I've spoken with have grave concerns about the security model of Ripple, but we'll just have to wait and see. There's nothing wrong with experimentation.

In my opinion, Ripple is a pretty clever way to take the allure of the successful cryptocurrency system and leverage it into a proprietary project that will make the creators of the project rich. And that's fine, rich is good. But, I don't see that Ripple has any significant advantage over Bitcoin from a monetary perspective, and that's what will ultimately decide the success of the two projects.

Ripple's competitive advantage rests on the tenuous assertion that it transfers standard currencies, when it reality it doesn't do this. Ripple only really transfers XRP's, and in this way it is no better than Bitcoin, which transfers BTC's... yet Bitcoin is far more proven, widespread, and decentralized.

Ultimately, competition in cryptocurrency land is good. I have great respect for the OpenCoin developers, and Ripple is certainly not a scam, but I remain unconvinced of the system's ultimate merit.

The problem is if you go through a third party, you don't know how much debt they've created.  You can set a limit on how much you trust someone but there's no way to know how big of a leveraged position they're playing in aggregate.  In other words, there's a fundamental lack of transparency.  There's no point in Ripple if this is the case as we're back to the fundamental problem with current governments that we're trying to escape.

That's a problem that has to be addressed outside of Ripple itself. One possible solution is to only extend trust to people who you know, and who you trust to provide you with accurate information about their personal balance sheet.

There's stickies and posts all over this forum stating to, "trust no one."  Also, that's a tremendous amount to ask of someone.  Lets say I trust you up to a $50 IOU.  Are you willing to disclose to me all of your personal financial information for $50?  $100?  Most people will be reluctant to make this sort of information public and even if they do, validating their claims is difficult or expensive (third party audit).

The problem all goes back to peer-to-peer lending, which is what it seems Ripple is despite the duration of the loan.  Peer-to-peer lending is based on unsecured loans and there is ample evidence (including past projects of one of OpenCoin's founders) that this model does not work.  So the question to me then becomes what if we allow for secured IOUs?  So basically you can issue $10,000 in IOUs so long as you have $10,000 in collateral.  That works for me but the problem here is in a decentralized exchange, who holds the collateral? 

Right now what I see in Ripple is a decent business model but with some very large inherent flaws.  Maybe the creators have thought of a way to address these issues, but until I hear about it or understand more, I'm wary. 

Yeah, the main problem I see with Ripple is that it's probably a lot more centralized than it appears, even ignoring the issues with XRP distribution and source availability.

AFAICT, Ripple requires that your UNL:
- Contain entities that won't cooperate to defraud you.
- Contain entities that themselves have good UNLs, and the entities in their UNLs must have good UNLs, etc.
- Form a "good network". A UNL containing just your friends wouldn't form a good network because you wouldn't be linked well-enough to the rest of Ripple. Your section of the network might get into a situation where its idea of history will never converge with the rest of the network's idea of history.

As a result, I believe that Ripple can really only be used reliably and securely if everyone has pretty much the same UNL. It's probably OK to remove or add a handful of nodes to your UNL, but at least a big portion of it probably needs to remain the same between users. So this ends up being a distributed system, but not a decentralized one. Whoever decides who's on the canonical UNL has a lot of power over the network. Also, people generally can't be "full nodes" in Ripple and participate in the consensus process because full nodes need to be online all the time and in someone's UNL.

Despite this, I wouldn't be surprised to see Ripple grow over the next few years. A lot of people think that it's decentralized and safe, and if they use the default centralized Ripple configuration it probably will be safe and stable in the short-term, and it'll be a lot cheaper to transact using Ripple than with Bitcoin. But it won't actually be as decentralized or as robust as Bitcoin, and legal issues may bring the whole thing down eventually.

[lexxus]

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.

+1. It's in the Ledger of Ripple network.

[Sukrim]

Looking at this page and your "facts", this still seems like an elaborate joke to me that I just don't get (yet)...

On the other hand, maybe you are really convinced that if you spot a scam, you need to invest money to make people aware of it?

[🏰 TradeFortress 🏰]

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.

+1. It's in the Ledger of Ripple network.

I've already responded to this. The government can seize the backings behind the debt, which dramatically reduces the value to the point where it isn't worth anything.

Take a look at how BTC debt is going for.

[🏰 TradeFortress 🏰]

Looking at this page and your "facts", this still seems like an elaborate joke to me that I just don't get (yet)...

On the other hand, maybe you are really convinced that if you spot a scam, you need to invest money to make people aware of it?

Not a joke.

OpenCoin Inc has substantial capital in promoting a flawed scheme to get them rich to the detriment of the Bitcoin ecosystem. Make no mistake, OpenCoin Inc's goals are to kill bitcoin.

[lexxus]

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.

+1. It's in the Ledger of Ripple network.

I've already responded to this. The government can seize the backings behind the debt, which dramatically reduces the value to the point where it isn't worth anything.

Take a look at how BTC debt is going for.

Ok. But what's the difference with BTC? I have 10 BTC and took 50 more from you as a debt (without Ripple). Now goverment breaks in my home, siezes my PC and puts me in jail for 10 years for "money laundering" or something. How this doesn't dramatically reduces the value of my debt to you?

[🏰 TradeFortress 🏰]

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.

+1. It's in the Ledger of Ripple network.

I've already responded to this. The government can seize the backings behind the debt, which dramatically reduces the value to the point where it isn't worth anything.

Take a look at how BTC debt is going for.

Ok. But what's the difference with BTC? I have 10 BTC and took 50 more from you as a debt (without Ripple). Now goverment breaks in my home, siezes my PC and puts me in jail for 10 years for "money laundering" or something. How this doesn't dramatically reduces the value of my debt to you?

Ripple forces you to take debt, unless you use XRP which is premined.

The government can seize all BTCs an exchange has with a court order, because all the BTCs are kept in a centralized location. However, it is much more impractical for federal agents to seize decentralized storages.

[lexxus]

Ripple forces you to take debt, unless you use XRP which is premined.

The government can seize all BTCs an exchange has with a court order, because all the BTCs are kept in a centralized location. However, it is much more impractical for federal agents to seize decentralized storages.

But let's assume for a moment that OpenCoin will holds it's promises, delivers opensource server and we will see that it's truly decentralized. Then is there a problem with debt still there or not really?

The thing is that I don't see their incentives of failing to do what they promised. Yes, they hold 50bill. of XRP, but there is no way they can dump it and get rich quick. It's just to much to be absorbed in the open market unless Ripple network will become trustworthy and widely used. And this in turn requires opensource servers and decentralization.

[Micon]

I want this on record that I cannot understand Ripple.  I am not the smartest on these forums, I know that, but when I found bitcoin I keep researching the answers to questions I kept having.  I am still in that research process, 2+ yrs later:  and I'm still finding answers, and I'm never left hanging without an answer - I am always able to find it for myself or ask Freemoney to explain it to me.

With Ripple, I only generate questions, not answers.  How the pre-mine work?  what is an xrp, in reality? who got 50B xrps?  so they hold all the Ripple "debt" ?  so the initial friends of opencoin get most of the initial rights to issue trust (debt) ? - I watched that video about Gateways and pathways and became extremely confused.  I cannot find any answers.  How do I sell 1 btc for USD?  Is this possible with ripple?

It seems way too complex and not needed in any way. 

I have said this about litecoin / devcoin / feathercoin [lol] / the other alt-cryptos - there is 1 world-wide adopted crypto-currency, it's called bitcoin, and many many many businesses will be built on top of this amazing layer - PPl will try and copy this bitcoin model in many ways, trying to create another "base layer" for others to build on, but there is not a second bitcoin IMO.

After reading the whitepaper and their website, it seems to me that Ripple is trying to be bitcoin, or seems jealous of bitcoin - but again I admittedly do not understand it nor will take much more time to do so unless many of the bitcoin'ers that I respect start supporting it or at least explain it to me.

[redwraith]

I want this on record that I cannot understand Ripple.  I am not the smartest on these forums, I know that, but when I found bitcoin I keep researching the answers to questions I kept having.  I am still in that research process, 2+ yrs later:  and I'm still finding answers, and I'm never left hanging without an answer - I am always able to find it for myself or ask Freemoney to explain it to me.

With Ripple, I only generate questions, not answers.  How the pre-mine work?  what is an xrp, in reality? who got 50B xrps?  so they hold all the Ripple "debt" ?  so the initial friends of opencoin get most of the initial rights to issue trust (debt) ? - I watched that video about Gateways and pathways and became extremely confused.  I cannot find any answers.  How do I sell 1 btc for USD?  Is this possible with ripple?

It seems way too complex and not needed in any way. 

I have said this about litecoin / devcoin / feathercoin [lol] / the other alt-cryptos - there is 1 world-wide adopted crypto-currency, it's called bitcoin, and many many many businesses will be built on top of this amazing layer - PPl will try and copy this bitcoin model in many ways, trying to create another "base layer" for others to build on, but there is not a second bitcoin IMO.

After reading the whitepaper and their website, it seems to me that Ripple is trying to be bitcoin, or seems jealous of bitcoin - but again I admittedly do not understand it nor will take much more time to do so unless many of the bitcoin'ers that I respect start supporting it or at least explain it to me.

Ripple is not a "coin" and was never meant to be, and this is where it's detractors are willfully trying to mislead you.  XRP is a  common denominator liquidity provider inside the system that facilitates the transfer of differing currencies, including bitcoin.  It is used so that one can turn a currency into another one and is done automatically and seamlessly to make payments easy.  Any value gained by holding this internal liquidity provider is a side effect, but not the main purpose of ripple. 
   The whole "Oh, its premined!" argument is laughable, because it was never meant to be a mined cryptocurrency in the first place and this concept is something that some members of this forum cannot seem to grasp, therefore they attack, mislead and just basically lie because they're afraid of something unknown. 
Tradefortress has admitted he was a supporter of Ripple at one time, so he obviously saw something of value in it, but it seems mainly because it is not opensourced (the client is, BTW) he has decided to go into seek and destroy mode using basically nothing but speculation as attack vectors.  We'll see who's the fool in time.

[SamS]

I want this on record that I cannot understand Ripple.  I am not the smartest on these forums, I know that, but when I found bitcoin I keep researching the answers to questions I kept having.  I am still in that research process, 2+ yrs later:  and I'm still finding answers, and I'm never left hanging without an answer - I am always able to find it for myself or ask Freemoney to explain it to me.

With Ripple, I only generate questions, not answers.  How the pre-mine work?  what is an xrp, in reality? who got 50B xrps?  so they hold all the Ripple "debt" ?  so the initial friends of opencoin get most of the initial rights to issue trust (debt) ? - I watched that video about Gateways and pathways and became extremely confused.  I cannot find any answers.  How do I sell 1 btc for USD?  Is this possible with ripple?

It seems way too complex and not needed in any way.  

I have said this about litecoin / devcoin / feathercoin [lol] / the other alt-cryptos - there is 1 world-wide adopted crypto-currency, it's called bitcoin, and many many many businesses will be built on top of this amazing layer - PPl will try and copy this bitcoin model in many ways, trying to create another "base layer" for others to build on, but there is not a second bitcoin IMO.

After reading the whitepaper and their website, it seems to me that Ripple is trying to be bitcoin, or seems jealous of bitcoin - but again I admittedly do not understand it nor will take much more time to do so unless many of the bitcoin'ers that I respect start supporting it or at least explain it to me.

Ripple is not a "coin" and was never meant to be, and this is where it's detractors are willfully trying to mislead you. XRP is a  common denominator liquidity provider inside the system that facilitates the transfer of differing currencies, including bitcoin.  It is used so that one can turn a currency into another one and is done automatically and seamlessly to make payments easy.  Any value gained by holding this internal liquidity provider is a side effect, but not the main purpose of ripple.  
   The whole "Oh, its premined!" argument is laughable, because it was never meant to be a mined cryptocurrency in the first place and this concept is something that some members of this forum cannot seem to grasp, therefore they attack, mislead and just basically lie because they're afraid of something unknown.  
Tradefortress has admitted he was a supporter of Ripple at one time, so he obviously saw something of value in it, but it seems mainly because it is not opensourced (the client is, BTW) he has decided to go into seek and destroy mode using basically nothing but speculation as attack vectors.  We'll see who's the fool in time.

From the Ripple Website:

Ripple Credits
ripples (XRP)

Ripple contains a virtual currency, called ripples (XRP). These are used to pay the small fee required by the network for each transaction. They can also be sent between two accounts, converted into other currencies, or spent at venues that accept them.

And the link:
https://ripple.com/how-ripple-works/

[smoothie]

I guess for me the fact that ripple had a booth at Bitcoin 2013 speaks volumes.

Litecoin, Freicoin, name coin, terracoin etc. all did not ever have a booth at a conference.

Ripple is controlled by a single entity, OpenCoin Inc.

That basically sums it up on all of its flaws as a system.

Any system where I have to trust another human being to be the backing "alternative payment system" to traditional banking systems is not a system I want to use.

Trusting a single entity says it can be shut down implicitly by any governing body or regulators if they so choose.

Looks like a broken system to me.

[TTBit]

I want this on record that I cannot understand Ripple.  I am not the smartest on these forums, I know that, but when I found bitcoin I keep researching the answers to questions I kept having.  I am still in that research process, 2+ yrs later:  and I'm still finding answers, and I'm never left hanging without an answer - I am always able to find it for myself or ask Freemoney to explain it to me.

With Ripple, I only generate questions, not answers.  How the pre-mine work?  what is an xrp, in reality? who got 50B xrps?  so they hold all the Ripple "debt" ?  so the initial friends of opencoin get most of the initial rights to issue trust (debt) ? - I watched that video about Gateways and pathways and became extremely confused.  I cannot find any answers.  How do I sell 1 btc for USD?  Is this possible with ripple?

It seems way too complex and not needed in any way. 

I have said this about litecoin / devcoin / feathercoin [lol] / the other alt-cryptos - there is 1 world-wide adopted crypto-currency, it's called bitcoin, and many many many businesses will be built on top of this amazing layer - PPl will try and copy this bitcoin model in many ways, trying to create another "base layer" for others to build on, but there is not a second bitcoin IMO.

After reading the whitepaper and their website, it seems to me that Ripple is trying to be bitcoin, or seems jealous of bitcoin - but again I admittedly do not understand it nor will take much more time to do so unless many of the bitcoin'ers that I respect start supporting it or at least explain it to me.

You're over-thinking

Consider this - the US used to be on a min-ripple system, the gold standard. People routinely traded in their gold for paper IOUs and bank IOUs (and vise-versa). Ripple is a way to do this for all assets. We're getting lost in why people would want to turn in perfectly good assets for IOUs of said asset, but there can be advantages of doing so.

[themusicgod1]

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?

How long will bitcoin be around?  Does it matter?  You could use the same argument against mtgox or any online service which allows you to deposit BTC into it.  "Sure mtgox lets you keep your BTC on their service...but for how long?"

If you have trust issues, that's your problem.  But if you trust someone for 1BTC, and that person trusts someone else for 1BTC, then that 1BTC of value can be transferred between you.   You do not need a "real" bitcoin in order to make a transaction happen, and that's the whole point.  Let the "real" bitcoins stay in a more secure location and let trust be allocated via 'lighter' ways.

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 whole point of Ripple is that there will be *many* gateways and that a complete loss of one will only be a trivial problem.  Sure there's only a few right now, but there will be no barriers beyond legal ones(and good luck with that).

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

Equivocation.  You owned something, and that something can be recreated.  Unlike real bitcoin a balance can be reinstated after a hard disk is lost.  Obviously not all gateways are going to do this but there's nothing preventing a balance of 1BTC from being put right back after a hard drive is taken.  As you've pointed out these are not bitcoins these are *promises* of bitcoins, which is a different thing but, when treated right, can function *just as much of a currency as bitcoins themselves*.

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

I would encourage people who believe this go check out the source code to villages.cc and other releases of Ripple.  It has been a continuing path of decentralization, ending at the next version which is not yet released but which TradeFortress seems to have some kind of an issue with.

you don't have to trust anyone

Which is fantastic, if you're living in a cabin in the woods and don't have any friends but can still order stuff at gunpoint off of the internet.

Unfortunately most of us *do* trust people and our trust is limited to fairly local trust networks, and mostly sits unused.

Ripple allows you to use that trust so you, along with your entire community can build wealth that is not available without it.

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.

Satoshi has NEVER commented on Ripple.  TradeFortress is building an argument based on misunderstandings of what Ripple is.

[CurbsideProphet]

The gray area with Ripple "debt" is what troubles me most.  Debt is granted with the expectation of being repaid.  However, in the Ripple system I'm not even sure there is legal recourse you could take against someone if they were to default on you.  As I mentioned earlier, we're already dealing with unsecured debt, which already leaves the creditor with very little recourse but on top of that, these IOU's or whatever you want to call them, are they even legally binding?  

Even in peer-to-peer lending, you had the ability to sick debt collectors on a defaulter, hurt their FICO score, etc.  This was done through the peer-to-peer medium (i.e. Prosper) and not done by the actual creditors.  Is Ripple going to play collection agency?  I don't think they will nor do I think they can, not in a decentralized exchange.  So again, everything falls back on a system that is predicated purely on trust.  And rather opaque trust at that.  I'd like to see a real world example where a PURE trust-based system has been successful on a grand scale.  It doesn't work.  People follow the rules because if you don't, there are consequences.  If you take away the consequences and expect everyone to play fairly, you're incredibly naive.

[superduh]

tradefortres, to be fair the community should wait for the source code to be released and then fully judge it.
it does sound like it has several pitfalls at the moment.
trading xrps (as in buying them) should probably be avoided unless you want to do high stakes gambling.