themusicgod1
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May 27, 2013, 07:05:33 PM |
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I woudnt trust a gaeway that trusts someone else.
You are unjustly paranoid. People and institutions have other people and institutions that they trust. Even if most employees do not have access to the cold storage wallet SOMEONE does, and that person the exchange trusts. The exchange trusts employees to not quit, to not steal from them, to not cause legal problems on their behalf, and so on. There is no institution that is free from this necessary trust that binds society together. You'd need a purely virtual exchange to do this and then you wouldn't be dealing with fiat currency at all. If your friend needs help, send him money.
Firstly, who are you to tell the world how to help their friends? More options for friends to work their finances together isn't necessarily a bad thing. So it's not your cup of tea, that's OK - you don't have to use it. But it just works. Secondly, you don't necessarily know when your friend is going to need it. Suppose they don't need money 99.99% of the time, is it really worth the effort of their asking you to borrow it when they need it, rather than ahead of time when they don't? Thridly, since you're effectively creating money when you create ripple connections, this is money that does not really exist in the economy, and as the money supply is increased, the amount of trade that can occur increases, further separating your group of friends, and the entities it is involved with from autarky.. If you only lend money to your friend when he needs it rather than making sure the ripple network routes it appropriately, money can sit more idle than it could given a Ripple network to route it. It can allow him to be *more productive*, allowing your friend to be better off, which reduces the odds even further of him having to actually use it for something he needs.
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Mitzplik
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May 27, 2013, 07:45:49 PM |
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Musicgod, You dont need ripple to help your friends like that. Just give them checks that they can withdraw from your account when they need (its exactly the same concept). About trusting ( ![Cheesy](https://bitcointalk.org/Smileys/default/cheesy.gif) ) LOL!!! I mean granting trust in ripple network (giving ripple checks), not the feeling of trust!!!! LOL!!!!!!!!!!
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JoelKatz
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May 27, 2013, 07:58:33 PM |
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You dont need ripple to help your friends like that. Just give them checks that they can withdraw from your account when they need (its exactly the same concept).
The problem is that this lets them borrow from you even when it's not convenient for you, it makes it hard to keep track of how much they've borrowed and when they've paid you back, and it makes it hard to set and manage a limit to how much they can borrow. Ripple can knock down a lot of these barriers. But whether that's enough to make social credit work, I don't know. Real social changes will be necessary -- people will have to be more open about their finances and more willing to accept help.
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I am an employee of Ripple. Follow me on Twitter @JoelKatz 1Joe1Katzci1rFcsr9HH7SLuHVnDy2aihZ BM-NBM3FRExVJSJJamV9ccgyWvQfratUHgN
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abrkn
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May 27, 2013, 08:01:19 PM Last edit: March 15, 2015, 03:25:37 AM by abrkn |
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JoelKatz
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May 27, 2013, 08:42:03 PM |
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Why would a gateway trust anyone?
Consider a gateway whose primary purpose is to serve merchants. Merchants who accept their balances won't do any business unless their customers can get balances from them. The easiest way for them to get that going is to agree to accept balances from other more established gateways that have a working "cash in from the general public" infrastructure. If customers with balances at other gateways can't pay the merchants, the gateway fails. One way to ensure this is to provide backstop liquidity by trusting other gateways. Obviously, this has risk associated with it. The gateway would have to carefully weigh the benefits and costs associated with doing this. Unless arbitragers or market makers come in, a gateway aimed primarily at merchants will have a huge cash imbalance as they pay out to merchants but don't get any cash coming in. Unless they accept balances from other gateways, this imbalance will destroy their business as their customers' customers can't acquire balances to make payments to the gateway's customers.
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I am an employee of Ripple. Follow me on Twitter @JoelKatz 1Joe1Katzci1rFcsr9HH7SLuHVnDy2aihZ BM-NBM3FRExVJSJJamV9ccgyWvQfratUHgN
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themusicgod1
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May 27, 2013, 09:50:31 PM |
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Musicgod, You dont need ripple to help your friends like that. Just give them checks that they can withdraw from your account when they need (its exactly the same concept). About trusting ( ![Cheesy](https://bitcointalk.org/Smileys/default/cheesy.gif) ) LOL!!! I mean granting trust in ripple network (giving ripple checks), not the feeling of trust!!!! LOL!!!!!!!!!! Maybe, but maintaining the status on those cheques would be a management nightmare with 600 friends. Ripple makes it easier. (Also not everyone gets free chequing -- if you trust your friend for 2$ but your cheque costs 2$ to cash...doesn't help you two much) Also there are things that Ripple can do that are not included with that scenario.
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themusicgod1
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May 27, 2013, 09:53:58 PM |
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I woudnt trust a gaeway that trusts someone else. If your friend needs help, send him money.
Why would a gateway trust anyone? Suppose the Gateway has a physical location, somewhere that they rent, such as the Toronto Startup space company that accepts bitcoin. They might be interested in being able to pay rent with Ripple, however the Toronto Startup space does not trust them. They would trust their rental space, and in the event that they managed to use that trust, they would pay a month's rent with it, putting the balance back at 0, perpetually. In practice this just looks like the customers paying rent for the Gateway, and I've seen something very similar work.
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abrkn
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May 27, 2013, 10:10:06 PM Last edit: March 15, 2015, 03:25:57 AM by abrkn |
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solex
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May 27, 2013, 10:20:31 PM |
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Maybe, but maintaining the status on those cheques would be a management nightmare with 600 friends. Ripple makes it easier.
More evidence that social media has corrupted the word "friend" until it is almost meaningless. Someone might have 600 acquaintances, but friends?, no. Trusted friends, much less. Robin Dunbar's wrote the first paper on social group maximums without a hierarchial/authoritiarian structure. http://en.wikipedia.org/wiki/Dunbar%27s_numberTL;DR 150 friends is the most anyone can reasonably have, and that is exceptional.
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themusicgod1
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May 27, 2013, 11:40:46 PM |
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Maybe, but maintaining the status on those cheques would be a management nightmare with 600 friends. Ripple makes it easier.
More evidence that social media has corrupted the word "friend" until it is almost meaningless. Someone might have 600 acquaintances, but friends?, no. Trusted friends, much less. Robin Dunbar's wrote the first paper on social group maximums without a hierarchial/authoritiarian structure. http://en.wikipedia.org/wiki/Dunbar%27s_numberTL;DR 150 friends is the most anyone can reasonably have, and that is exceptional. Actually that's evidence that you're not using your media efficiently. 600 is a little extreme, but 150 is really low ball these days. You can be interacting with people in some way shape or form 24/7 and can know more about the people around you than your ancestors would have thought possible. Trust has always been a hard nut to crack, but I think that Dunbar's Limit can actually be computed in terms of ripple connections you can honestly maintain in the interests of both parties. Once Ripple (and other technology) enters into the equation, you can coordinate with much larger groups than had been up until that point reasonable (however still finite).
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MPOE-PR
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May 28, 2013, 10:31:23 AM Last edit: May 28, 2013, 10:55:04 AM by MPOE-PR |
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In fairness to ripple, MP appears to not totally understand ripple. He seems to be confusing XRP with IOUs/debt on occasion (in the IRC conversation) and also making the mistake many have made of believing if you trust someone and they then trust someone else that causes a problem.
In practical terms: the person was given some XRP, the person took out some BTC. At some point somewhere there existed a conversion of XRP for BTC, via the IOU system. to trade XRPs for IOUs
This is all that's needed. "Well... that's not how Ripple works. As long as you trust both Lou Jiwei and some random Chinese dude any people who trust you can trade LJ's yuans straight for the random dude's."
The emboldened part should read "any people who trust LJ and hold random dude's yuan can exchange random dude's yuan for any of LJ's yuan that YOU hold".
Well thank you for that. Passed this along, we all got to enjoy one of those rare "holy shit!" MP faces. Apparently that's what he meant to say. Thanks! The general issues pointed out by MP at the start ARE real problems of course - particularly the whole system being based on a requirement that users willingly accept CP risk (I might not get my money back) and opportunity cost (my money isn't earning anything) without remuneration. If the software is amended to fix the specific issue discussed in this thread (which effectively blind-sides people into providing general liquifity when they thought they were holding specific debt) then it's hard to see where liquidity will come from - as providing liquidity at significant risk but with no benefit isn't going to appeal to too many people (not ones who still have significant funds that is - the ones willing to do that should mostly have lost their money by now doing the same stupid thing before).
All of that said, if I can figure out some way to pay interest on Ripple I'd seriously considering offering bonds on it. If there's people willing to provide liquidity for no cost then I'm guessing I wouldn't have to pay a very high rate - making it a cheaper way to fund-raise than I currently use.
Quoting this mostly so it doesn't get as quickly covered by the prattle of idiocy.
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Deprived
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May 28, 2013, 01:35:46 PM |
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In practical terms: the person was given some XRP, the person took out some BTC. At some point somewhere there existed a conversion of XRP for BTC, via the IOU system.
No. The person wasn't given any XRP. The only movement of XRP that occurred in the process was the destruction of a tiny amount. XRP is entirely seperate to the conversion of debt from one issuer to another (other than some being destroyed during transactions). The only time XRP gets exchanged for a different currency is if two parties intentionally exchange it - which DOES require both parties to agree to a change in the currency they hold (though they can't necessarily control the issuer from whom the currency comes if they have more than one line of trust open in the currency). XRP, in general, is seperate from the IOU system - it exists alongside it as an 'actual' currency like Bitcoin. It's official purpose is to be used to prevent spam by anyone creating a transaction having to destroy some. BTCs/yuan/USD/whatever in ripple, on the hand, can be created from nothing by anyone (as IOUs) - with ripple treating them as of equal value to ones of the same denomination created by anyone else. This is a common area of confusion with ripple (IOUs/XRP) - in part because the official function of ripple is rippling IOUs but the only part that works properly/is easily usable is XRPs. So all the talk/trading is of XRPs despite them being officially just a minor feature to control spamming (in reality the main aim of OpenCoin is to extract value from the 1 billion XRPs they printed - the IOU trading etc is just a necessary evil for them in making the XRPs have some semblance of use/value).
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Deprived
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May 28, 2013, 01:46:14 PM |
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Actually there's two seperate things being discussed in the IRC conversation which MP conflated.
namworld was talking about selling XRPs to someone else. That has nothing to do with IOUs - XRPs are an alt-currency and there are people who are DELIBERATELY buying them despite them being given away free. namworld sold his free XRPs to someone for a few BTC - that person wanted to buy XRPs, knew they were buying XRPs and there's no flaw in ripple involved or misunderstanding by either party (of what was being traded).
This topic and the flaws in ripple are entirely seperate and have nothing to do with XRP as a currency in its own right or people voluntarily exchanging BTC for them.
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Mitzplik
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May 28, 2013, 01:52:06 PM |
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In practical terms: the person was given some XRP, the person took out some BTC. At some point somewhere there existed a conversion of XRP for BTC, via the IOU system.
This is a common area of confusion with ripple (IOUs/XRP) - in part because the official function of ripple is rippling IOUs but the only part that works properly/is easily usable is XRPs. So all the talk/trading is of XRPs despite them being officially just a minor feature to control spamming (in reality the main aim of OpenCoin is to extract value from the 1 billion XRPs they printed - the IOU trading etc is just a necessary evil for them in making the XRPs have some semblance of use/value). I agree partially. XRP will be part of Opencoin profit. It will be in fact a currency or, if it fails, people will have to buy it from Opencoin to use their system. But it has its charm. The system depends on the gateways to work, and the liquidity will rise following the number of existing gateways. When there are enough of them people will actually be able to send FIAT currency globally, trough a worldwide compensation system, XRP being or not a currency.
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🏰 TradeFortress 🏰
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May 28, 2013, 02:05:49 PM |
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Yes, that is called "Ripple" before OpenCoin Inc bought it and turned it into a venture for their new cryptocurrency. It exists, it works fine, and there's no XRPs or transaction fees.
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ElectricMucus
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May 28, 2013, 02:55:41 PM |
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This is a common area of confusion with ripple (IOUs/XRP) - in part because the official function of ripple is rippling IOUs but the only part that works properly/is easily usable is XRPs. So all the talk/trading is of XRPs despite them being officially just a minor feature to control spamming (in reality the main aim of OpenCoin is to extract value from the 1 billion XRPs they printed - the IOU trading etc is just a necessary evil for them in making the XRPs have some semblance of use/value).
Apple building iphones and macbooks is just a necessary evil to make APL shares have some semblance of use/value.
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themusicgod1
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May 28, 2013, 04:27:17 PM |
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Yes, that is called "Ripple" before OpenCoin Inc bought it and turned it into a venture for their new cryptocurrency. It exists, it works fine, and there's no XRPs or transaction fees.
But, as you must know, while it works fine it is incomplete and *they are finishing the job*. XRP, with all its sketchy properties looks like it was the key to their being able to do so.
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MPOE-PR
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May 28, 2013, 04:44:39 PM |
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Yes, that is called "Ripple" before OpenCoin Inc bought it and turned it into a venture for their new cryptocurrency. It exists, it works fine, and there's no XRPs or transaction fees.
But, as you must know, while it works fine it is incomplete and *they are finishing the job*. XRP, with all its sketchy properties looks like it was the key to their being able to do so. Except it still doesn't do anything. So yeah, adding a scam to a dysfunctional system resulted in a lot of shills being advanced some quarters and doing their thing, on obscure blogspot blogs and on obscure bitcointalk accounts. A great success indeed, call the freakshow VCs, the coin* failure shall be nothing compared.
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Deprived
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May 28, 2013, 04:49:20 PM |
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This is a common area of confusion with ripple (IOUs/XRP) - in part because the official function of ripple is rippling IOUs but the only part that works properly/is easily usable is XRPs. So all the talk/trading is of XRPs despite them being officially just a minor feature to control spamming (in reality the main aim of OpenCoin is to extract value from the 1 billion XRPs they printed - the IOU trading etc is just a necessary evil for them in making the XRPs have some semblance of use/value).
Apple building iphones and macbooks is just a necessary evil to make APL shares have some semblance of use/value. Think you accidentally said the truth there - whilst trying to be sarcastic. Apple's primary objective is to make profit for their shareholders - building iphones etc is what they do to do that. Their shares reflect their success in that. With OpenCoin the value of XRP reflects how well they're doing - as they've defined that as the means by which they'll extract profit from ripple. Increasing the value of XRP is thus their primary objective (as the means by which they'll make profit). I have no problem at all with a for-profit organisation trying to make money. What's unfortunate is that tieing their profit to XRP rather than to the success of ripple itself (and the two are NOT necessarily the same) leads to the situation where the decision of whether to implement a change that makes the platform stronger but lowers the price of XRP becomes a difficult one for them. Life would be far simpler if they'd picked a profit-making strategy that rewarded them based on the success of otherwise of ripple (XRP can succeed or fail as a currency in its own right largely independently of how well ripple as a whole succeeds). But then they wouldn't be able to make a decent profit if ripple itself never really takes off. So now when deciding how to distribute XRP they can no longer focus on what the most efficient methods are - but have to factor in (to a very significant extent) the likely impact of any particular distribution method on their ability to get cash out of XRP. That specifically means making distribution inefficient so that some people are forced to buy XRP. Every legitimate user getting enough free XRP to use ripple would be ideal for ripple - but a total disaster for OpenCoin. And that's the conflict of interest they've created for themselves. The distribution of XRP is, in any event. the big unsolved problem with using it as spam-prevention - my money is very much on it mainly stopping legitimate users : attackers have other vectors and those wanting to use transactions for information aren't likely to be priced out of it.
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JoelKatz
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May 28, 2013, 04:59:35 PM Last edit: May 28, 2013, 05:49:04 PM by JoelKatz |
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What's unfortunate is that tieing their profit to XRP rather than to the success of ripple itself (and the two are NOT necessarily the same) leads to the situation where the decision of whether to implement a change that makes the platform stronger but lowers the price of XRP becomes a difficult one for them. That's a large part of the reason we designed it so that we wouldn't be running it. Ultimately, we think it's adoption of Ripple as a payment network that will drive demand for XRP. We're willing to take the risk that we're wrong on that, as we've taken so many other risks. If we fail because Ripple is successful as a payment network and demand for XRP just doesn't arise, well, of all the many ways we could fail, that's not too bad. Our primary strategy is to remove every possible drag on adoption of Ripple as a payment network and do everything we can to drive adoption. So now when deciding how to distribute XRP they can no longer focus on what the most efficient methods are - but have to factor in (to a very significant extent) the likely impact of any particular distribution method on their ability to get cash out of XRP. We don't think so. We think long term that driving adoption is the right strategy both for growth of the payment network and for eventual value for XRP. That specifically means making distribution inefficient so that some people are forced to buy XRP. Every legitimate user getting enough free XRP to use ripple would be ideal for ripple - but a total disaster for OpenCoin. We don't care about the value of XRP over that short a term. If people are forced to buy XRP, some people won't adopt Ripple because of that. Our success strategy is exponential growth for many years. Sacrificing growth now for a short term boost in the price of XRP would be foolish.
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I am an employee of Ripple. Follow me on Twitter @JoelKatz 1Joe1Katzci1rFcsr9HH7SLuHVnDy2aihZ BM-NBM3FRExVJSJJamV9ccgyWvQfratUHgN
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