Ripple Q & A @ Joel Katz and Ripple inc.

[smoothie]

So Ripple isn't decentralized then?

It's designed to operate as a full decentralized network. It is not all the way there yet. Open sourcing the server is one step. An infrastructure for managing validator lists without a central authority is the next big step.

Currently I look at it as centralized given there is a company behind the ripple network. That company can be shut down or regulated as the powers that be see fit.

If we shut down, the network will continue so long as people are interested in continuing it. If it solves real problems for real people, they'll keep it going. If not, what difference does it make? Avoiding regulation is not one of our goals. In fact, we're working very hard to figure out how everyone from individuals to financial institutions can use crypto-currencies while complying with existing regulations and working to prevent new regulations that stifle innovation.

But isn't the entire ripple network based on trust of other users?

Saying if "they'll keep it going" is like saying that people will never be untrustworthy. Not to mention the large stash of "premined" XRPs you folks still hold and "promise" not to dump on the market. That involves trust too.

The IOU system is a flawed system with our current monetary system already. It almost sounds like you folks are mimicking the credit rating system to determine "trust" if I had to use an analogy.

Okay so it isn't...currently...decentralized. yet I keep hearing the sales pitch that it is. I was there at Bitcoin Conference in May where your own CEO who spoke on the alt-panel claimed it to be decentralized.

Has this mis-speak not  happened?

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[sublime5447]

So Ripple isn't decentralized then?

It's designed to operate as a full decentralized network. It is not all the way there yet. Open sourcing the server is one step. An infrastructure for managing validator lists without a central authority is the next big step.

Currently I look at it as centralized given there is a company behind the ripple network. That company can be shut down or regulated as the powers that be see fit.

If we shut down, the network will continue so long as people are interested in continuing it. If it solves real problems for real people, they'll keep it going. If not, what difference does it make? Avoiding regulation is not one of our goals. In fact, we're working very hard to figure out how everyone from individuals to financial institutions can use crypto-currencies while complying with existing regulations and working to prevent new regulations that stifle innovation.

I honestly don't think it is possible for OpenCoin to be the party to get ripple to be truly decentralized. The topic of decentralization is a free-market type phenomena that occurs when the market chooses for it to happen. It just happens, there is no formula or solution to getting something to be that way...it just happens on its own.

Well, we can start the process by convincing a number of distinct organizations to run validators, publish lists of validators maintained using an open process, and so on. But I do agree that real decentralization will require people to choose to adopt Ripple and choose to participate. Basically, it's like the way Bitcoin became decentralized -- it took large numbers of different groups to run miners, participate in the development of the software, and form a robust community that can make decisions about the direction the network should go.

Deal breaker!

[🏰 TradeFortress 🏰]

If we shut down, the network will continue so long as people are interested in continuing it. If it solves real problems for real people, they'll keep it going. If not, what difference does it make? Avoiding regulation is not one of our goals. In fact, we're working very hard to figure out how everyone from individuals to financial institutions can use crypto-currencies while complying with existing regulations and working to prevent new regulations that stifle innovation.

Not really, most XRPs won't be distributed,  most people have not written down their secret keys (no matter what wording you use, users are stupid. source: inputs.io support dealing with users who didn't write down their recovery keys), ripple.com/client would be down, wallet blobs would be down, etc.

[sublime5447]

So Ripple isn't decentralized then?

It's designed to operate as a full decentralized network. It is not all the way there yet. Open sourcing the server is one step. An infrastructure for managing validator lists without a central authority is the next big step.

Currently I look at it as centralized given there is a company behind the ripple network. That company can be shut down or regulated as the powers that be see fit.

If we shut down, the network will continue so long as people are interested in continuing it. If it solves real problems for real people, they'll keep it going. If not, what difference does it make? Avoiding regulation is not one of our goals. In fact, we're working very hard to figure out how everyone from individuals to financial institutions can use crypto-currencies while complying with existing regulations and working to prevent new regulations that stifle innovation.

But isn't the entire ripple network based on trust of other users?

Saying if "they'll keep it going" is like saying that people will never be untrustworthy. Not to mention the large stash of "premined" XRPs you folks still hold and "promise" not to dump on the market. That involves trust too.

The IOU system is a flawed system with our current monetary system already. It almost sounds like you folks are mimicking the credit rating system to determine "trust" if I had to use an analogy.

Okay so it isn't...currently...decentralized. yet I keep hearing the sales pitch that it is. I was there at Bitcoin Conference in May where your own CEO who spoke on the alt-panel claimed it to be decentralized.

Has this mis-speak not  happened?

That is not the problem with the current economic system the problem is that it is a ponzi scheme that is dependent on ever expanding debt so that people can make payments on principle plus interest payments due on the principle. All money is and has always been IOU's all money is a promise. Even gold  

Look up the credit theory of money

[🏰 TradeFortress 🏰]

But isn't the entire ripple network based on trust of other users?

Saying if "they'll keep it going" is like saying that people will never be untrustworthy. Not to mention the large stash of "premined" XRPs you folks still hold and "promise" not to dump on the market. That involves trust too.

The IOU system is a flawed system with our current monetary system already. It almost sounds like you folks are mimicking the credit rating system to determine "trust" if I had to use an analogy.

Okay so it isn't...currently...decentralized. yet I keep hearing the sales pitch that it is. I was there at Bitcoin Conference in May where your own CEO who spoke on the alt-panel claimed it to be decentralized.

Has this mis-speak not  happened?

It's based on trust, but you're trusting Ripple for non-double spends, and the majority of users are trusting Bitstamp for BTC/USD/etc IOUs.

[smoothie]

If we shut down, the network will continue so long as people are interested in continuing it. If it solves real problems for real people, they'll keep it going. If not, what difference does it make? Avoiding regulation is not one of our goals. In fact, we're working very hard to figure out how everyone from individuals to financial institutions can use crypto-currencies while complying with existing regulations and working to prevent new regulations that stifle innovation.

Not really, most XRPs won't be distributed,  most people have not written down their secret keys (no matter what wording you use, users are stupid. source: inputs.io support dealing with users who didn't write down their recovery keys), ripple.com/client would be down, wallet blobs would be down, etc.

Hence why I brought up their large stash they promise not to dump on the market.

[smoothie]

So Ripple isn't decentralized then?

It's designed to operate as a full decentralized network. It is not all the way there yet. Open sourcing the server is one step. An infrastructure for managing validator lists without a central authority is the next big step.

Currently I look at it as centralized given there is a company behind the ripple network. That company can be shut down or regulated as the powers that be see fit.

If we shut down, the network will continue so long as people are interested in continuing it. If it solves real problems for real people, they'll keep it going. If not, what difference does it make? Avoiding regulation is not one of our goals. In fact, we're working very hard to figure out how everyone from individuals to financial institutions can use crypto-currencies while complying with existing regulations and working to prevent new regulations that stifle innovation.

But isn't the entire ripple network based on trust of other users?

Saying if "they'll keep it going" is like saying that people will never be untrustworthy. Not to mention the large stash of "premined" XRPs you folks still hold and "promise" not to dump on the market. That involves trust too.

The IOU system is a flawed system with our current monetary system already. It almost sounds like you folks are mimicking the credit rating system to determine "trust" if I had to use an analogy.

Okay so it isn't...currently...decentralized. yet I keep hearing the sales pitch that it is. I was there at Bitcoin Conference in May where your own CEO who spoke on the alt-panel claimed it to be decentralized.

Has this mis-speak not  happened?

That is not the problem with the current economic system the problem is that it is a ponzi scheme that is dependent on ever expanding debt so that people can make payments on principle plus interest payments due on the principle. All money is and has always been IOU's all money is a promise. Even gold  

How is Gold an IOU? If I hand you a coin 1 oz coin for payment for a laptop you are paid. I do not owe you anything nor do you owe me. The payment is settled. Nothing has been borrowed nor owed.

That is a transaction.

Gold has a perception of value just like the paper fiat currencies. The difference is that there is no counter-party risk with gold. FRN are IOUs backed by air. Gold is backed by its history as a store of value (the free-market version of saying we agree Gold is worth SOMETHING...similar to Bitcoin).


You are correct that the current state of IOUs is flawed. Before the lender actually backed what they lent out. Banks just lend air to people at interest.

[Labcoin_PR]

Hey JoelKatz, we lost our secret key, can you send us another 50 million ripples?

Happy to pay you the amount with Mtgox USD and smoothie trolling credits.

[sublime5447]

Gold is just a promise to get something of actual value. I know you will say it has actual value but it has value for the same reason bitcoin has value because of our shared belief in its value.

People cant live in gold they cant eat gold you cant put it in an engine and go places with it you cant burn it to warm yourself up if you where freezing to death you cant drink it if you dying from dehydration.

Like I said look up the credit theory of money.


 "The Credit Theory is this: that a sale and purchase is the exchange of a commodity for credit. From this main theory springs the sub-theory that the value of credit or money does not depend on the value of any metal or metals, but on the right which the creditor acquires to "payment," that is to say, to satisfaction for the credit, and on the obligation of the debtor to "pay" his debt and conversely on the right of the debtor to release himself from his debt by the tender of an equivalent debt owed by the creditor, and the obligation of the creditor to accept this tender in satisfaction of his credit."

There is a little bit of disagreement when it comes to commodity money like gold, but in reality no matter the medium of exchange it is just a promise that you will be able to get something that you value in exchange for giving up something to someone else that they value.

[sublime5447]

Avoiding regulation is not one of our goals. In fact, we're working very hard to figure out how everyone from individuals to financial institutions can use crypto-currencies while complying with existing regulations

Is this not a deal breaker for anyone else? Shit this is the kinda problem I was talking about. You guys are hung up on lines of code, dude comes out and says this and all I hear is crickets

[smoothie]

Gold is just a promise to get something of actual value. I know you will say it has actual value but it has value for the same reason bitcoin has value because of our shared belief in its value.

People cant live in gold they cant eat gold you cant put it an engine and go places with it you cant burn it to warm yourself up if you where freezing to death you cant drink it if you dying from dehydration.

Like I said look up the credit theory of money.


 "The Credit Theory is this: that a sale and purchase is the exchange of a commodity for credit. From this main theory springs the sub-theory that the value of credit or money does not depend on the value of any metal or metals, but on the right which the creditor acquires to "payment," that is to say, to satisfaction for the credit, and on the obligation of the debtor to "pay" his debt and conversely on the right of the debtor to release himself from his debt by the tender of an equivalent debt owed by the creditor, and the obligation of the creditor to accept this tender in satisfaction of his credit."

There is a little bit of disagreement when it comes to commodity money like gold, but in reality no matter the medium of exchange it is just a promise that you will be able to get something that you value in exchange for giving up something to someone else that they value.

The problem with your statement that gold is a promise is flawed.

Gold itself does not promise to pay anything. It is a lump of metal. The FRN and other fiat promise to pay or "get"  you something for your paper.

The logic is pretty simple. One is man-made thus creating the air portion of a promise, while gold is just a piece of metal not promising anything.

Here is a good definition of PROMISE:

prom·ise
ˈpräməs/
noun
1.
a declaration or assurance that one will do a particular thing or that a particular thing will happen.
"what happened to all those firm promises of support?"
synonyms:   word (of honor), assurance, pledge, vow, guarantee, oath, bond, undertaking, agreement, commitment, contract, covenant More
the quality of potential excellence.
"he showed great promise even as a junior officer"
synonyms:   potential, ability, aptitude, capability, capacity More
an indication that something specified is expected or likely to occur.
"the promise of peace"
synonyms:   indication, hint, suggestion, sign More
verb
verb: promise; 3rd person present: promises; past tense: promised; past participle: promised; gerund or present participle: promising
1.
assure someone that one will definitely do, give, or arrange something; undertake or declare that something will happen.
"he promised to forward my mail"
synonyms:   give one's word, swear, pledge, vow, undertake, guarantee, contract, engage, give an assurance, commit oneself, bind oneself, swear/take an oath, covenant; More
archaic
pledge (someone, esp. a woman) to marry someone else; betroth.
"I've been promised to him for years"
2.
give good grounds for expecting (a particular occurrence or situation).
"forthcoming concerts promise a feast of music from around the world"
synonyms:   indicate, lead one to expect, point to, denote, signify, be a sign of, be evidence of, give hope of, bespeak, presage, augur, herald, bode, portend; More

[smoothie]

Avoiding regulation is not one of our goals. In fact, we're working very hard to figure out how everyone from individuals to financial institutions can use crypto-currencies while complying with existing regulations

Is this not a deal breaker for anyone else? Shit this is the kinda problem I was talking about. You guys are hung up on lines of code, dude comes out and says this and all I hear is crickets

Just so I dont assume anything...what is your problem with it?

[🏰 TradeFortress 🏰]

Avoiding regulation is not one of our goals. In fact, we're working very hard to figure out how everyone from individuals to financial institutions can use crypto-currencies while complying with existing regulations

Is this not a deal breaker for anyone else? Shit this is the kinda problem I was talking about. You guys are hung up on lines of code, dude comes out and says this and all I hear is crickets

Just so I dont assume anything...what is your problem with it?

Gateways must of course follow all local regulations.

Possible KYC / AML support:

Restricted issuance of IOUs
    The gateway may restrict the accounts to which it sends IOUs. For instance, it may limit sending to those account for which KYC requirements have been met.
Restricted holding of IOUs
    The gateway may restrict hold of its IOUs to pre-approved accounts. See Authorized accounts
IOU freezing
    Not implemented. The gateway may freeze an account's ability to transfer their IOUs.

From the official ripple wiki.

[sublime5447]

Avoiding regulation is not one of our goals. In fact, we're working very hard to figure out how everyone from individuals to financial institutions can use crypto-currencies while complying with existing regulations

Is this not a deal breaker for anyone else? Shit this is the kinda problem I was talking about. You guys are hung up on lines of code, dude comes out and says this and all I hear is crickets

Just so I dont assume anything...what is your problem with it?

My only purpose to being involved with digital money is to remove the mechanisms that the state uses to enslave its citizens, enact barriers to free trade and to defund the war machines of the world. I am in it for social change and if we are all cowering and complying with government regulations that wont happen.

The only reason to use it is to starve the state out of existence

[sublime5447]

Avoiding regulation is not one of our goals. In fact, we're working very hard to figure out how everyone from individuals to financial institutions can use crypto-currencies while complying with existing regulations

Is this not a deal breaker for anyone else? Shit this is the kinda problem I was talking about. You guys are hung up on lines of code, dude comes out and says this and all I hear is crickets

Just so I dont assume anything...what is your problem with it?

Gateways must of course follow all local regulations.

Possible KYC / AML support:

Restricted issuance of IOUs
    The gateway may restrict the accounts to which it sends IOUs. For instance, it may limit sending to those account for which KYC requirements have been met.
Restricted holding of IOUs
    The gateway may restrict hold of its IOUs to pre-approved accounts. See Authorized accounts
IOU freezing
    Not implemented. The gateway may freeze an account's ability to transfer their IOUs.

From the official ripple wiki.

Deal breaker fuck ripple

[JoelKatz]

Gateways must of course follow all local regulations.

Possible KYC / AML support:

Restricted issuance of IOUs
    The gateway may restrict the accounts to which it sends IOUs. For instance, it may limit sending to those account for which KYC requirements have been met.
Restricted holding of IOUs
    The gateway may restrict hold of its IOUs to pre-approved accounts. See Authorized accounts
IOU freezing
    Not implemented. The gateway may freeze an account's ability to transfer their IOUs.

From the official ripple wiki.

The "freeze" ability hasn't been implemented due to lack of demand. The restrict ability is implemented, but no gateways (that I know of, anyway) currently use it. These options have to be enabled for an account prior to any assets being issued by that account. So if a gateway chooses to use either of these features, everyone will know it before they choose to use that gateway. We don't want to tell other people how they have to use Ripple. We want to enable people to do what they want to do. Of course, we do want everyone to know what they're getting into and we want the rules to be hard to change after the game has started.

[sublime5447]

Gold is just a promise to get something of actual value. I know you will say it has actual value but it has value for the same reason bitcoin has value because of our shared belief in its value.

People cant live in gold they cant eat gold you cant put it an engine and go places with it you cant burn it to warm yourself up if you where freezing to death you cant drink it if you dying from dehydration.

Like I said look up the credit theory of money.


 "The Credit Theory is this: that a sale and purchase is the exchange of a commodity for credit. From this main theory springs the sub-theory that the value of credit or money does not depend on the value of any metal or metals, but on the right which the creditor acquires to "payment," that is to say, to satisfaction for the credit, and on the obligation of the debtor to "pay" his debt and conversely on the right of the debtor to release himself from his debt by the tender of an equivalent debt owed by the creditor, and the obligation of the creditor to accept this tender in satisfaction of his credit."

There is a little bit of disagreement when it comes to commodity money like gold, but in reality no matter the medium of exchange it is just a promise that you will be able to get something that you value in exchange for giving up something to someone else that they value.

The problem with your statement that gold is a promise is flawed.

Gold itself does not promise to pay anything. It is a lump of metal. The FRN and other fiat promise to pay or "get"  you something for your paper.

The logic is pretty simple. One is man-made thus creating the air portion of a promise, while gold is just a piece of metal not promising anything.

Here is a good definition of PROMISE:

prom·ise
ˈpräməs/
noun
1.
a declaration or assurance that one will do a particular thing or that a particular thing will happen.
"what happened to all those firm promises of support?"
synonyms:   word (of honor), assurance, pledge, vow, guarantee, oath, bond, undertaking, agreement, commitment, contract, covenant More
the quality of potential excellence.
"he showed great promise even as a junior officer"
synonyms:   potential, ability, aptitude, capability, capacity More
an indication that something specified is expected or likely to occur.
"the promise of peace"
synonyms:   indication, hint, suggestion, sign More
verb
verb: promise; 3rd person present: promises; past tense: promised; past participle: promised; gerund or present participle: promising
1.
assure someone that one will definitely do, give, or arrange something; undertake or declare that something will happen.
"he promised to forward my mail"
synonyms:   give one's word, swear, pledge, vow, undertake, guarantee, contract, engage, give an assurance, commit oneself, bind oneself, swear/take an oath, covenant; More
archaic
pledge (someone, esp. a woman) to marry someone else; betroth.
"I've been promised to him for years"
2.
give good grounds for expecting (a particular occurrence or situation).
"forthcoming concerts promise a feast of music from around the world"
synonyms:   indicate, lead one to expect, point to, denote, signify, be a sign of, be evidence of, give hope of, bespeak, presage, augur, herald, bode, portend; More

a declaration or assurance that one will do a particular thing


The particular thing the lump of metal does is that it says I will be able to get what I desire in exchange for giving up something that you desire. That is the promise gold makes 

[🏰 TradeFortress 🏰]

Gateways must of course follow all local regulations.

Possible KYC / AML support:

Restricted issuance of IOUs
    The gateway may restrict the accounts to which it sends IOUs. For instance, it may limit sending to those account for which KYC requirements have been met.
Restricted holding of IOUs
    The gateway may restrict hold of its IOUs to pre-approved accounts. See Authorized accounts
IOU freezing
    Not implemented. The gateway may freeze an account's ability to transfer their IOUs.

From the official ripple wiki.

The "freeze" ability hasn't been implemented due to lack of demand. The restrict ability is implemented, but no gateways (that I know of, anyway) currently use it. These options have to be enabled for an account prior to any assets being issued by that account. So if a gateway chooses to use either of these features, everyone will know it before they choose to use that gateway. We don't want to tell other people how they have to use Ripple. We want to enable people to do what they want to do. Of course, we do want everyone to know what they're getting into and we want the rules to be hard to change after the game has started.

If a gateway is forced to do so because of legal reasons, they most likely will stop honoring their old IOUs for redemption and create new IOUs.

[JoelKatz]

If a gateway is forced to do so because of legal reasons, they most likely will stop honoring their old IOUs for redemption and create new IOUs.

That's certainly possible. Gateways are, like all other businesses, required to follow the laws of the jurisdictions in which they operate and must respond to court orders issued by courts of competent jurisdiction. The greater includes the lesser -- in theory a government could order a gateway to stop redeeming entirely. Basically, if you operate in an jurisdiction, the controlling government can do any terrible thing to you that you might imagine.

[smoothie]

Avoiding regulation is not one of our goals. In fact, we're working very hard to figure out how everyone from individuals to financial institutions can use crypto-currencies while complying with existing regulations

Is this not a deal breaker for anyone else? Shit this is the kinda problem I was talking about. You guys are hung up on lines of code, dude comes out and says this and all I hear is crickets

Just so I dont assume anything...what is your problem with it?

Gateways must of course follow all local regulations.

Possible KYC / AML support:

Restricted issuance of IOUs
    The gateway may restrict the accounts to which it sends IOUs. For instance, it may limit sending to those account for which KYC requirements have been met.
Restricted holding of IOUs
    The gateway may restrict hold of its IOUs to pre-approved accounts. See Authorized accounts
IOU freezing
    Not implemented. The gateway may freeze an account's ability to transfer their IOUs.

From the official ripple wiki.

Deal breaker fuck ripple

So if accounts can be frozen ....

remind me how this is any better than the current banking system that does that too?