The True Explanation of Ripple for Bitcoiners

[mmeijeri]

All IOUs for the same real-world instrument (BTC, USD, Gold, Oranges) are regarded as fully fungible 1:1 even though they originate from different people with different circumstances. This means that:

This is simply false. IOUs aren't interchangeable in Ripple until you say so. If you say that you are willing to accept IOUs in a given currency issued by a certain person, then Ripple will make use of that when routing payments. If you don't, it won't. If you are willing to exchange IOUs in the same currency issued by different gateways or even individuals, then you can specify the exchange rate and Ripple will make use of that when matching trades and routing payments. By default, the Ripple system will not accept anyone's IOUs and won't trade one person's IOUs for another's, let alone 1:1.

[misterbigg]

Why would someone think trying to sell the ability to create IOUs to bitcoiners would give them anything but shit and drama? Debt Stinks... I should know 

[mmeijeri]

That's a healthy amount of money you have there misterbigg!

[boonies4u]

Why would someone think trying to sell the ability to create IOUs to bitcoiners would give them anything but shit and drama? Debt Stinks... I should know  

I don't use exchanges and I don't plan to. At least with MtGox and other exchanges I would know what I would be getting into.

Has anyone claimed Ripple to be open source? If the answer is yes, where is the source code?

Has anyone claimed Ripple to be decentralized? If the answer is yes, is it infact true?

I'm not trying to troll, these are legitimate questions. I haven't been following Ripple lately, because I don't particularly like IOUs.

That's a healthy amount of money you have there misterbigg!

He obviously values IOUs from a central authority which has recently had their liquidity threatened.

[cypherdoc]

what is wrong with you?  can't you get the message when your threads keep getting moved off Discussion?

like i said before:

in Bitcoin, exchanges aren't critical for the network to funcition.

whereas in Ripple, licensed trusted financial institutions, are.

[bitbitcoincoin]

what is wrong with you?  can't you get the message when your threads keep getting moved off Discussion?

like i said before:

in Bitcoin, exchanges aren't critical for the network to funcition.

whereas in Ripple, licensed trusted financial institutions, are.

You know what they call people who only make self moderated threads in the alt currency section?  Scammers.

Fitting for MrBig here, the scamcoin Ripple shill, to associate himself with that lot.

[Sukrim]

like i said before:

in Bitcoin, exchanges aren't critical for the network to funcition.

whereas in Ripple, licensed trusted financial institutions, are.

In Bitcoin you can ONLY get other Bitcoins (that you "own") or untradeable and implicit IOUs in transactions. In Ripple you can get XRP (that you "own") or tradeable and explicit IOUs in transactions.

Ripple is complementing Bitcoin, not trying to replace it. You can use it if you either trust somebody else (e.g. a gateway) or if you are trusted yourself (so others will accept your IOUs and you are the gateway), no matter the actual currency.

[mmeijeri]

in Bitcoin, exchanges aren't critical for the network to funcition.

whereas in Ripple, licensed trusted financial institutions, are.

Simply not true, not for making payments in Ripple and not even for trading IOUs.

[SGExodus]

Ripple serves no purpose except adding an unnecessary intermediary to the transaction.

It's like asking someone to print an email, buy the stamps (XRP) and send it via postal rather than sending it electronically in the first place.

[MPOE-PR]

he's busy deleting posts of mine as well.  he's a scumbag Ripple shill.

Well with the old scamschool running abeach what with the twin MtGox/BFL failures, he needs something new.

In general you can tell which projects are scams by who promotes them. See any goat/rosenfeld/kenna/katz/gmaxwell/lukejr/blablabla behind it...run.

[Sukrim]

See any goat/rosenfeld/kenna/katz/gmaxwell/lukejr/blablabla behind it...run.

But, but... he hasn't even posted yet! https://bitcointalk.org/index.php?action=profile;u=27249

[boonies4u]

like i said before:

in Bitcoin, exchanges aren't critical for the network to funcition.

whereas in Ripple, licensed trusted financial institutions, are.

In Bitcoin you can ONLY get other Bitcoins (that you "own") or untradeable and implicit IOUs in transactions. In Ripple you can get XRP (that you "own") or tradeable and explicit IOUs in transactions.

Ripple is complementing Bitcoin, not trying to replace it. You can use it if you either trust somebody else (e.g. a gateway) or if you are trusted yourself (so others will accept your IOUs and you are the gateway), no matter the actual currency.

Simply not true, not for making payments in Ripple and not even for trading IOUs.

So what is left for Ripple if you do not involve yourself with any transactions involving Fiat? Is there a way to transact Fiat without being dependent on exchanges?

[justusranvier]

So what is left for Ripple if you do not involve yourself with any transactions involving Fiat?

For most users, probably nothing. Perhaps a group of interconnected businesses would find it useful to monetize their accounts receivable and conduct payment in kind transactions between themselves.

Is there a way to transact Fiat without being dependent on exchanges?

Yes, but it will take a lot to build because you'll need a lot of communication and logistics outside of Ripple to make it work.

[mmeijeri]

For most users, probably nothing.

Using it to make payments with XRP would be very useful for most users.

[justusranvier]

Using it to make payments with XRP would be very useful for most users.

That begs the question of why anyone would want to hold XRP in the first place, and contradicts claims that XRP is not a direct Bitcoin competitor.

[mmeijeri]

That begs the question of why anyone would want to hold XRP in the first place, and contradicts claims that XRP is not a direct Bitcoin competitor.

I think it is both hugely synergetic (through the Ripple interface with fiat) and a direct competitor (XRP). I think both are good a thing.

[Sukrim]

For most users, probably nothing.

Using it to make payments with XRP would be very useful for most users.

And in my opinion very unwise... just from giveaways alone it is easy to pump + dump the thin internal markets, not even counting the reserves opencoin has.
XRP might have their uses but I would not recommend on using them as value store. Similar to Bitcoins by the way, which are also held quite centralized and are traded on comparatively thin markets.


boonies4u, if you for example only want to deal ever in Bitcoins in your whole life and Ripple gained traction and you are either trusted by a few people or do trust someone like MtGox, BitJAM, SilkRoad or for example somebody who runs an OpenSource Bitcoin<->RippleIOU gateway (sample code for that can be found in the github repo actually) for let's say 10 BTC temporarilly, you can actually live on Bitcoins for the rest of your days.

You would set up the 10 BTC trust line (enough for a month wage), your employer sends you your payment in USD and you automatically receive the IOUs from your gateway, maybe even with an email alert. You then (maybe again even automatically) withdraw these IOUs or most of them as "real" BTC and you're golden. Once you want to buy something on Amazon, all you do is fund your account by sending some BTC to your gateway, waiting for 6 confirmations and then sending the payment to whatever merchant you want. Ripple selects the cheapest path by itself and just telly you how many of your BTC IOUs that item will cost. If you agree, you hit "send" and the merchant receives whatever currency IOU he prefers (e.g. USD from Paypal). You don't know and you don't have to care - all you ever have to touch is BTC and 1 XRP every million transactions or so.

[mmeijeri]

And in my opinion very unwise... just from giveaways alone it is easy to pump + dump the thin internal markets, not even counting the reserves opencoin has.
XRP might have their uses but I would not recommend on using them as value store. Similar to Bitcoins by the way, which are also held quite centralized and are traded on comparatively thin markets.

Absolutely, in the near future. But I think the success scenario is one where XRP sees wide adoption as a currency.

[boonies4u]

Ripple selects the cheapest path by itself and just telly you how many of your BTC IOUs that item will cost. If you agree, you hit "send" and the merchant receives whatever currency IOU he prefers (e.g. USD from Paypal). You don't know and you don't have to care - all you ever have to touch is BTC and 1 XRP every million transactions or so.

So if something goes wrong and it so happens that one of the parties down the path (Ripple chose) turns out to be illiquid, what happens?

[Sukrim]

Well, I guess we have to agree to disagree in this point. I hope XRP keep some certain mostly static value which would make them useful as intermediate currancy within Ripple, but I don't hope they will be used as currency directly.

Ripple selects the cheapest path by itself and just telly you how many of your BTC IOUs that item will cost. If you agree, you hit "send" and the merchant receives whatever currency IOU he prefers (e.g. USD from Paypal). You don't know and you don't have to care - all you ever have to touch is BTC and 1 XRP every million transactions or so.

So if something goes wrong and it so happens that one of the parties down the path (Ripple chose) turns out to be illiquid, what happens?

They get TradeFortressed and end up with bad debt that they agreed to accept. It doesn't influence you or anyone else who didn't trust this bad issuer just like you are not affected directly from Bitcoinica going belly up if you didn't have BTC lying there.

"Trust" in Ripple means:
"I would accept a check of up to __ units of currency __ from issuer __."
When you cash this check and if it is actually still "good" is your problem. If you accept checks from 2 different issuers, you can trade between them (e.g. I can offer to pay you 0.99 BTC for a 1 BTC "Bitcoin Code" from MtGox), which is how Ripple does path finding.
TradeFortress for example wrote himself a check of 1 billion or so BTC and then claimed this is a flaw in the system. It isn't - it's exactly how it is supposed to work. There is nobody stopping you from taking a blank check and writing "1 googol USD" on it either. You might have a hard time paying with it though probably.