Why Ripple has failed.

[xxjs]

There is a real life version of this in the bearers cheque or Wechsel (german) or "Bill of exchange", where the wechsel can go from hand to hand, and the intermediate holders endorse the debt. If there are many names on the back of the wechsel and you know all of them (or some of them) to be solid merchants, or there is a bank guaranteeing it, it is just as good as money. The value is the principal less the interest until the maturity, less a little expenses and less the fact that the receiver always prefers money directly.

The point is that you know at least some of the intermediate holders, it would not work with complete strangers.

There is still a systemic risk, for instance if all the merchants trade at different levels of completion of the same end product, they can all go titsup at the same time. In such a scenario, the IOU's will be worth less and the money worth more.

I don't know if ripple can mimic this, but of so, I think it will be useful.

[1714621110]

1714621110

[bitcoinBull]

There is a real life version of this in the bearers cheque or Wechsel (german) or "Bill of exchange", where the wechsel can go from hand to hand, and the intermediate holders endorse the debt. If there are many names on the back of the wechsel and you know all of them (or some of them) to be solid merchants, or there is a bank guaranteeing it, it is just as good as money. The value is the principal less the interest until the maturity, less a little expenses and less the fact that the receiver always prefers money directly.

The point is that you know at least some of the intermediate holders, it would not work with complete strangers.

There is still a systemic risk, for instance if all the merchants trade at different levels of completion of the same end product, they can all go titsup at the same time. In such a scenario, the IOU's will be worth less and the money worth more.

I don't know if ripple can mimic this, but of so, I think it will be useful.

That is very much the idea with Ripple. It decentralizes exchange so that IOUs can be traded freely. Contrast with conventional exchanges who maintain total control of their IOUs (remember when MtGox removed their function for USD codes?) and nobody knows how many they've issued (on ripple this is public information. bitstamp's current gateway capitalization is $263,911 USD and 2,560 BTC).

The point about paper-checks not working when passed around through complete strangers is because you cannot trust a stranger not to counterfeit and double-spend a paper check. Issuing and trading IOUs are cryptographically signed transactions on the ripple ledger, so double-spending and counterfeiting IOUs is prevented just as it is with bitcoins on the blockchain.

[Sukrim]

Your argument is now that it is hard to determine a proper amount to value this 1 BTC IOU. This is true however for any IOU and has been this way for millennia.

The difference is that for millennia the lender and borrower had a direct relationship and the lender could make an accurate determination of the risks he takes on when he lends by getting as much information as he can from the borrower. He can also determine the interest that would make it worth the trouble.
In ripple, this relationship is severed, making accurate determination impossible, rather than difficult.

Two consequences of this jump out at me;
1.) Trust lines will be determined by how much the lender is willing to lose, no questions asked, without notification, and without remuneration.
2.) People can and will abuse this system, and all of the most trusting/gullible will suffer the most from it.

As a direct result of this, trust lines -if they exist at all- will a combination of extraordinarily short and in tiny amounts.

You still have a direct relationship between your borrower (= your gateway) and the lender (= you). You have an account there, hopefully did due diligence in checking if they are actually paying out if you send them IOUs, checking if they are useful in your jurisdiction or your preferred currencies etc.

I am not sure about your terminology, with "borrower" I mean someone getting/holding an asset (e.g. a gold bar), and a "lender" is someone holding an IOU (e.g. a note saying "hand this note back at ... to receive 1 gold bar") for that asset that (s)he previously might have owned, but gave away to the borrower for later redemption.

It is my belief that 1 BTC (on the blockchain, as an asset) has exactly 0 value ... BTC is not based on their inherent value but rather upon their usefulness as money and store of value.

Everything is valued based upon it's usefulness, not its "inherent value". When Austrian Economists talk about intrinsic value, they are only referring to the intrinsic properties of the item in question that has value, subjectively, to certain people.

Then why does the price of BTC change that much if not that much happens in the BTC-ecosystem? Why do bubbles happen if everything is valued upon usefulness alone?

Your argument turned around would be the following: The inherent flaw of digital assets like XRP or BTC is that they cannot be priced by the owner, as they are worthless by themselves...

No, but a different phrasing of my argument would be;
IOU's cannot retain value as they are passed along a Ripple Web of Trust because the terms of the loan, which determines the value of the loan, is vaporized by the first Liquidity Provider.

I have terms only with my personal gateway and will only accept/receive IOUs denominated by them. Kinda like the bank that I have my account at. Even if someone from a bank whose name I can't even spell and whose currency I haven't even ever heard of sends me money, I will end up with some balance on my bank account, denominated in EUR, which means my bank now owes me a few EUR more.

I don't know your bank, I don't care about your bank and I certainly don't care about having any contracts with them. Still its IOUs might be worth something to some people. As long as you hand them to someone else at the same bank, they would likely value them at the same value as you do. You do nothing else when handing them to a liquidity provider, which is just a person who has 2 bank accounts - one at your bank, one at mine. He takes your balance and hands you a balance that I accept. That might be done for free or at a fee. Still there is nothing radically new or different about this, it has worked also for millennia like this when travelling to other countries that have different currencies for example.

The solution to both your arguments about rating trust in IOUs and the opposite argument about uncertain pricing of assets is also known for millennia: an open market where people come up with prices and hopefully also match these from time to time based on both their needs/beliefs and other market participants.

That doesn't work because the mechanism by which lenders can make these determinations in the market do not exist in Ripple over Liquidity Providers.

As long as you are lending out e.g. BTC to only one borrower (e.g. Bitstamp) and trading only there, why would you care about anyone else? As soon as you need to pay in different IOUs (e.g. in CNY.RippleCN), you need to trade on the open market and that's where people come into play who take the risk or work of trusting more than 1 entity and can get a fee for that service. Still I could care less if someone only accepts 100% fraudulent BTC (e.g. by TradeFortress), as long as there is a way to trade mine for these, it will be found and the cheapest one will be used by me. I never get exposed to anything and the only person(s) that might get burned are the liquidity provider(s) inbetween that willingly trusted TradeFortress and the person that accepted them in the first place.


I am still unsure what your actual criticism is - maybe it would help if you scetch a small network with 2-3 gateways, users, liquidity providers etc. and point out where what according to your theory goes wrong. As it seems somehow you think gateways might be able to run fractional reserve: At least in the EU issuing e-money is a VERY regulated business and you are definitely NOT allowed to run fractional reserve at any point of time.

Imagine that the IOU was a written contract that is literally passed down line of people.

The contract says, "I [name] owe [name] [principle amount]".

No, the contract says: "I, [gateway_name] give anyone who hands me this note [amount] of [currency]"

On Ripple itself you only state "I [user_name] accept up to [amount] of notes in [currency] from [gateway_name]"

This is all you will end up with as a balance and the only IOUs you are concerned with, are the gateways you are trusting. I don't see how a liquidity provider (who is simply someone who is a customer at 2 gateways) would "break" anything in there.

Again, please provide a small sample network that clearly demonstrates your point of failure, as I fail to see it honestly.

One major drawback of Ripple is that it relies on clients to maintain lists of nodes that are trusted not to collude. Bitcoin is not reliant on this assumption that nodes are not colluding. I could see a scenario where the NSA forces some of the most commonly used nodes to collude in order to comply with the law; even if users would suspect such nodes to have nothing to do with one another. In bitcoin, the NSA would have to take over the mining power. In Ripple, the NSA would just have to force a limited number of nodes to comply, since in order to ensure non-collusion between nodes, the client must choose from well-known nodes. If a client was to simply choose from a random set of nodes, there is no assurance of non-collusion. Ripple claims that this does not require trust, because we only need to be sure that nodes are not colluding, but it basically amounts to a dependence on a set of trusted nodes, because untrusted nodes cannot possibly be trusted to not collude. ie. Where are you getting your list of trusted nodes from?.... it has to be a trusted source. If you take your list of nodes from a public pool of nodes, then there is the potential for someone to contaminate this pool with a large number of colluding nodes.

This "limited number" is about 80% or even more of all Ripple nodes. This number is already RIGHT NOW higher than the number of servers you need to take over to severely mess with Bitcoin (which is about 2-3 pool servers). Also the NSA does not police the world - they would need to break into a lot of servers at the same time to pull this off. It would be easy for example to put only a handful of servers from the US into your UNL and mostly trust servers stationed in other jurisdictions. Also collusion is quite visible on the network too, if only a subset of servers always insists that foo_suspicious_transaction is included... You could for example have some "staging" area where you put NodeIDs of untrusted servers and watch them for signs of collusion if you want to download a huge list of random nodes from the net.

I agree that choosing a proper UNL is difficult, however this is far from impossible and if for example Bitstamp signs their NodeID with their issuing address, this is a VERY strong sign that this message is actually coming from them. Choosing a random subset of all known NodeIDs is of course not the smartest thing to do as you said, clustering them according to certain criteria and choosing some representative NodeIDs from these clusters however might already improve security a lot. Also bringing online a huge amount of nodes all at the same time might work once (when the source code gets released) - after that it would already raise a lot of suspicion too.

[xxjs]

There is a real life version of this in the bearers cheque or Wechsel (german) or "Bill of exchange", where the wechsel can go from hand to hand, and the intermediate holders endorse the debt. If there are many names on the back of the wechsel and you know all of them (or some of them) to be solid merchants, or there is a bank guaranteeing it, it is just as good as money. The value is the principal less the interest until the maturity, less a little expenses and less the fact that the receiver always prefers money directly.

The point is that you know at least some of the intermediate holders, it would not work with complete strangers.

There is still a systemic risk, for instance if all the merchants trade at different levels of completion of the same end product, they can all go titsup at the same time. In such a scenario, the IOU's will be worth less and the money worth more.

I don't know if ripple can mimic this, but of so, I think it will be useful.

That is very much the idea with Ripple. It decentralizes exchange so that IOUs can be traded freely. Contrast with conventional exchanges who maintain total control of their IOUs (remember when MtGox removed their function for USD codes?) and nobody knows how many they've issued (on ripple this is public information. bitstamp's current gateway capitalization is $263,911 USD and 2,560 BTC).

The point about paper-checks not working when passed around through complete strangers is because you cannot trust a stranger not to counterfeit and double-spend a paper check. Issuing and trading IOUs are cryptographically signed transactions on the ripple ledger, so double-spending and counterfeiting IOUs is prevented just as it is with bitcoins on the blockchain.

I didn't think about counterfeiting, only the solidity of the issuer and endorser. It their solidity can be questioned, the IOU will be worth less, because there is some risk of getting nothing.

[Sukrim]

Well, how much do you rate USD at your bank account? If it is face value, that means you believe that your bank can NEVER EVER fail, go down or be bankrupt. If it is less, how do you convince your bank to give you 1 USD balance on every 99 cents deposited (for example)?

[murraypaul]

Well, how much do you rate USD at your bank account? If it is face value, that means you believe that your bank can NEVER EVER fail, go down or be bankrupt. If it is less, how do you convince your bank to give you 1 USD balance on every 99 cents deposited (for example)?

In most countries, retail deposits below a certain threshold are guaranteed by the central bank.
So the lack of trust would lead to people with total cash above that limit to spread the money around between different banks to always stay below the limit at each one.
Given the availability of these guaranteed accounts, people would only use less safe ones if they offered large incentives, such as much higher interest rates. That is the way they offer you more than 1 USD balance for 99c depositied.

[Sukrim]

So in the end again you don't trust your bank, but the FDIC (in the US for example) that they have always enough funds available at all times to guarantee you at least 250000$ in your account. I'm using absolutes here, because any even tiny doubt would reduce the worth of the IOU from face value to below it.

Any kind of more beneficial terms (e.g. higher interest) then makes the IOUs more attractive - but that just means you are willing to take on more risk for a potentially more rewarding IOU. This just offsets the loss in value because of less trust to bring it up to face value because of more rewards. Why shouldn't this be possible in Ripple too?

[xxjs]

So in the end again you don't trust your bank, but the FDIC (in the US for example) that they have always enough funds available at all times to guarantee you at least 250000$ in your account. I'm using absolutes here, because any even tiny doubt would reduce the worth of the IOU from face value to below it.

Any kind of more beneficial terms (e.g. higher interest) then makes the IOUs more attractive - but that just means you are willing to take on more risk for a potentially more rewarding IOU. This just offsets the loss in value because of less trust to bring it up to face value because of more rewards. Why shouldn't this be possible in Ripple too?

Someone should check the FDIC assets. Browsed their site, but could not be bothered to find the real  answer. A 2% number was mentioned. I wonder, are some of the assets bank deposits?

[xxjs]

So in the end again you don't trust your bank, but the FDIC (in the US for example) that they have always enough funds available at all times to guarantee you at least 250000$ in your account. I'm using absolutes here, because any even tiny doubt would reduce the worth of the IOU from face value to below it.

Any kind of more beneficial terms (e.g. higher interest) then makes the IOUs more attractive - but that just means you are willing to take on more risk for a potentially more rewarding IOU. This just offsets the loss in value because of less trust to bring it up to face value because of more rewards. Why shouldn't this be possible in Ripple too?

Someone should check the FDIC assets. Browsed their site, but could not be bothered to find the real  answer. A 2% number was mentioned. I wonder, are some of the assets bank deposits?

Ok, found some old numbers here: (DIF Balance Sheet - Fourth Quarter 2008)

http://www.fdic.gov/about/strategic/corporate/cfo_report_4qtr_08/balance.html

It seems the biggest number is "Investment in U.S. Treasury obligations". Yeah, that is really smart.

[NWO]

What are you talking about?  "Photocopy the contract?"     Why would an IOU issuer create 8 different $1 IOU's to represent an actual $1 asset?

You're missing the point, but to answer your irrelevant question for giggles;

lol

[Coinseeker]

So in the end again you don't trust your bank, but the FDIC (in the US for example) that they have always enough funds available at all times to guarantee you at least 250000$ in your account. I'm using absolutes here, because any even tiny doubt would reduce the worth of the IOU from face value to below it.

Any kind of more beneficial terms (e.g. higher interest) then makes the IOUs more attractive - but that just means you are willing to take on more risk for a potentially more rewarding IOU. This just offsets the loss in value because of less trust to bring it up to face value because of more rewards. Why shouldn't this be possible in Ripple too?

Someone should check the FDIC assets. Browsed their site, but could not be bothered to find the real  answer. A 2% number was mentioned. I wonder, are some of the assets bank deposits?

Ok, found some old numbers here: (DIF Balance Sheet - Fourth Quarter 2008)

http://www.fdic.gov/about/strategic/corporate/cfo_report_4qtr_08/balance.html

It seems the biggest number is "Investment in U.S. Treasury obligations". Yeah, that is really smart.

From what I understand, no one has ever lost a single dollar due to a bank failure, thanks to the FDIC.  Love it or hate it, consumer confidence is key and this provides exactly that.

[JoelKatz]

Well, how much do you rate USD at your bank account? If it is face value, that means you believe that your bank can NEVER EVER fail, go down or be bankrupt. If it is less, how do you convince your bank to give you 1 USD balance on every 99 cents deposited (for example)?

Not quite. There is some discount of the value associated with the risk that the bank may default in some way. But there's also a convenience premium -- that's the reason I'm having the bank hold the money in the first place. For convenience, so long as the bank is sufficiently reliable, we "pretend" that the risk discount equals the convenience premium and value the balances at face value because that makes life easier for everyone.

It's much the same as people not weighing individual silver coins and just honoring them at face value so long as they didn't show obvious signs of tampering. If nobody else weighs coins, then you don't need to.

[xxjs]

So in the end again you don't trust your bank, but the FDIC (in the US for example) that they have always enough funds available at all times to guarantee you at least 250000$ in your account. I'm using absolutes here, because any even tiny doubt would reduce the worth of the IOU from face value to below it.

Any kind of more beneficial terms (e.g. higher interest) then makes the IOUs more attractive - but that just means you are willing to take on more risk for a potentially more rewarding IOU. This just offsets the loss in value because of less trust to bring it up to face value because of more rewards. Why shouldn't this be possible in Ripple too?

Someone should check the FDIC assets. Browsed their site, but could not be bothered to find the real  answer. A 2% number was mentioned. I wonder, are some of the assets bank deposits?

Ok, found some old numbers here: (DIF Balance Sheet - Fourth Quarter 2008)

http://www.fdic.gov/about/strategic/corporate/cfo_report_4qtr_08/balance.html

It seems the biggest number is "Investment in U.S. Treasury obligations". Yeah, that is really smart.

From what I understand, no one has ever lost a single dollar due to a bank failure, thanks to the FDIC.  Love it or hate it, consumer confidence is key and this provides exactly that.

Meaning you don't have to look at the numbers, the FDIC doesn't really have to have anything at all, and they still can guarantee all the deposits? So there is no risk, just because they up till now have not defaulted? So you crossed the atlantic in an armchair with party balloons, and since you made it, there were no risk at all?

[smoothie]

In my view the whole concept of supporting debt/transactions through trust is majorly flawed.

Why create a system that is based on IOUs and trust?....."faith"?....."credit"?  <--- The last two words are use by the U.S. govt when making promises they can't keep based on IOUs.

We already have that type of broken system...it's called the Federal Reserve System.

[🏰 TradeFortress 🏰]

In my view the whole concept of supporting debt/transactions through trust is majorly flawed.

Why create a system that is based on IOUs and trust?....."faith"?....."credit"?  <--- The last two words are use by the U.S. govt when making promises they can't keep based on IOUs.

We already have that type of broken system...it's called the Federal Reserve System.

Hey, Ripple Labs is the new Fed! They and sub-banks (Gateways) issue currency / IOUs, while Ripple Labs can play Federal Reserve and set Ripple-affecting variables like account reserve requirements, trust line requirements and transaction fees!

[DumbFruit]

Then why does the price of BTC change that much if not that much happens in the BTC-ecosystem? Why do bubbles happen if everything is valued upon usefulness alone?

The reason there could be fluctuations in value absent any external pressures is because value is subjective, and people have preferences that change from day to day.

Again, please provide a small sample network that clearly demonstrates your point of failure, as I fail to see it honestly.

I do enjoy your criticisms Sukrim, you are a very reasonable person. You may have thought I slunked off because my argument was defeated and I was trying to save face. Alas, I do not have such self respect, and also I'm not wrong. I was just distracted by the craziness over at Just-Dice, and learned several terms I'd never even heard before; Variance and Kelly criterion. Good times.

So your counter argument, you'll correct me if I'm wrong, is that users in ripple all have contracts with the Gateways that distribute the IOU's that users trade among themselves. Therefore, there is no contractual, or calculation problem because the users already made agreements with the Gateways that they like, and can even charge interest depending on the riskiness that they perceive in a particular Gateway.

Alright, that's cool. Again, the problem is not the relationship between a particular user and a Gateway, the problem is in between users as Liquidity Providers. I can give you two problems that can't be solved as long as Liquidity Providers exist.

The problem of changing markets.
Gateway A --> Group AB <-- Gateway B

Group AB is a group of people who all agree to transact with IOU's from A and B. They have all extended trust lines to A and B.

So far so good.

The problem arises among the relationships in Group AB. There are indeterminate trust lines extended every which way determined by the trust each person has with their immediate neighbor.

The abuse arises when something happens to Gateway B, and the network begins dumping those IOU's in exchange for Gateway A's more valuable IOU's.

Unless a user is paying extremely close attention, his account is going to accumulate less valuable IOU's without any notification to him.

In that way, the most trusting people in the system get stuck with IOU's that are less valuable.


Why does this happen?
Because the value of IOU's cannot be accurately automated along liquidity providers. As value changes, IOU's are dumped on the gullible/most trusting, who can't react fast enough.


Propagation of Inappropriate Trust
Trust in the real world is often extended irrationally. Often friends, family, and boobs garner more trust than intelligence, experience, and discipline.

For example, a businessman might trust his drinking buddy with $3, and the businessman's boss in ripple trusts the businessman for $10. The drinking buddy could borrow, through the businessman, $3 from the boss.

Notice that it doesn't matter at all that all three of them trust the Gateway (bank), that's not relevant.

These are small amounts, but when these bad debts are rampant through the system, the only solution is to either not trust anyone, or else make the trusted amounts so small that it's not too painful when the inevitable defaults occur.

If the argument to fix this is to reduce the trust lines to tiny amounts and let people borrow from huge amounts of people in order to do exchanges, then as soon as the amount that can be transferred in this way reaches any substantial amount, someone is going to game the system and run with the booty.

As a result, the trust lines have to be useless in order to not be dangerous.

Note that it's true that trust lines will shrink in response to this. The businessman will probably cut trust from his drinking buddy if it becomes a problem, but that doesn't counter my point, it reinforces it. The trust lines have to be short in very small amounts, or not exist at all in order to avoid ending up trusting someone that isn't really trustworthy, because it's very hard for a casual user to extend trust lines appropriately.

Edit: Technically speaking, as Sukrim points out, you can't do this because a user can't be a Gateway. (Trying to follow all these caveats is enough to give a person a migraine.)
Suffice it to say, the problem still exists, but instead of borrowing, the drinking buddy might transfer something that is less valuable through some kind of knowledge advantage (insider or otherwise). It gets complicated...

Why does this happen?
For the same reason I lined out in the opening post. The value of IOU's is different depending on who is getting the IOU.
There is not enough information in consecutive parties to issue IOU's appropriately.

[Sukrim]

So if I get you correctly, your reasoning is that 1:1 "rippling" of IOUs (e.g. I trust A.BTC and B.BTC and can end up with either of them) is bad, since one would better need to make an explicit market order to trade IOUs than to implicitly exchange them.

I fully agree on this, this is also the most discussed bug report in the ripple client about this issue (https://github.com/ripple/ripple-client/issues/748). Ripple in its classic idea (everybody is a gateway) would probably die out if this was not enforced or change (evolve?) to its current state where IOU issuers are relatively rare and realtively well known and established entities.

There are remedies against that though:
Partially: setting OutputQuality to something else than 1:1 and keeping a low balance to limit potential losses and earn a small fee in the mean time - doesn't protect against catastrophic failures.
Fully: setting the tfSetNoRipple flag on your trust lines (https://ripple.com/wiki/Transactions#TrustSet_.2820.29) so your IOUs will never be implicitly exchanged. You can still act as liquidity provider, but only via explicit market orders, not implicit trust line rippling. As this is already possible for quite some time, and only VERY few people use this possibility, there is either the option that it is too complex to do this (one could fork a "no-rippling" client though) or that the majority of Ripplers actually disagree with you on this threat.

Anyways, as I said, it is possible to use Ripple without this for yourself - and if others take that risk knowingly, it is their problem frankly.

[DumbFruit]

So if I get you correctly, your reasoning is that 1:1 "rippling" of IOUs (e.g. I trust A.BTC and B.BTC and can end up with either of them) is bad, since one would better need to make an explicit market order to trade IOUs than to implicitly exchange them.

I fully agree on this, this is also the most discussed bug report in the ripple client about this issue (https://github.com/ripple/ripple-client/issues/748). Ripple in its classic idea (everybody is a gateway) would probably die out if this was not enforced or change (evolve?) to its current state where IOU issuers are relatively rare and realtively well known and established entities.

Woot. Mission accomplished.

There are remedies against that though:
Partially: setting OutputQuality to something else than 1:1 and keeping a low balance to limit potential losses and earn a small fee in the mean time - doesn't protect against catastrophic failures.
Fully: setting the tfSetNoRipple flag on your trust lines (https://ripple.com/wiki/Transactions#TrustSet_.2820.29) so your IOUs will never be implicitly exchanged. You can still act as liquidity provider, but only via explicit market orders, not implicit trust line rippling.

OutputQuality is a dead end, but if "tfSetNoRipple" makes it so "your IOU's will never be implicitly exchanged", then that could definitely be a fix, but as vinniefalco (aka MrBiggs) says, this aligns with the "new Ripple" and doesn't mesh with the idealist fantasy that was the original Ripple, which is what my OP was all about.

I had virtually no respect for Vinnie until I read that conversation, thanks for pointing that out.

As this is already possible for quite some time, and only VERY few people use this possibility, there is either the option that it is too complex to do this (one could fork a "no-rippling" client though) or that the majority of Ripplers actually disagree with you on this threat.

Well then the majority of Ripplers are wrong.

Anyways, as I said, it is possible to use Ripple without this for yourself - and if others take that risk knowingly, it is their problem frankly.

I agree, but the problem with the way Ripple exists now is that they take the risk unknowingly.

Edit: And I also don't like calling it a risk. Accumulating less valuable IOU's in Ripple in which Liquidity Providers exist is about as risky as getting wet by being thrown into the Atlantic.

[JoelKatz]

In my view the whole concept of supporting debt/transactions through trust is majorly flawed.

Why create a system that is based on IOUs and trust?....."faith"?....."credit"?  <--- The last two words are use by the U.S. govt when making promises they can't keep based on IOUs.

We already have that type of broken system...it's called the Federal Reserve System.

That's pretty much the only way to provide an electronic payment system for fiat currencies. Ripple is "less broken" than existing payment systems for fiat currencies because users can exchange balances with each other without needing the permission of any central authority.

[QuantPlus]

In my view the whole concept of supporting debt/transactions through trust is majorly flawed.

Why create a system that is based on IOUs and trust?....."faith"?....."credit"?  <--- The last two words are use by the U.S. govt when making promises they can't keep based on IOUs.

We already have that type of broken system...it's called the Federal Reserve System.

That's pretty much the only way to provide an electronic payment system for fiat currencies. Ripple is "less broken" than existing payment systems for fiat currencies because users can exchange balances with each other without needing the permission of any central authority.

Keep flogging that Silly Straw Man, baby.

In decades of banking and trading in Canada and USA well into 7 figures...
I have not lost a single penny... or lost any sleep over the security of my assets.

Meanwhile, people whose money disappears on Ripple are writing Github tickets...
And being told they had "bad passwords". What fun.

https://ripplecharts.com/markets

Looking at the stats there has been no progress since May...
It's Bitstamp and nothing else...
Your big US Gateway is doing $2,300 is business/day.

Open sourcing without achieving anything close to "critical mass"...
Seems like a desperate move to save the Network to Nowhere.