Its like bitcoin, but premined, right? I wish they would ask them that in interviews.
The internal currency is like Bitcoin, the rest of the system (payment/credit/exchange) is not. The concept of "premined" doesn't make any sense in conjunction with a system that doesn't use proof of work.
Mining as a currency distribution system in currencies that use proof of work is necessary because otherwise there's no way to incentivize people to provide enough proof of work to keep the currency secure until transaction fees are sufficient to do that on their own. But otherwise, it has numerous disadvantages. For one thing, it consumes an enormous amount of resources for the sole purpose of making an attack impractical by requiring an attacker to exceed those resources. These resources constitute value created by the Bitcoin economy that are sucked out of it and go into the pockets of ASIC manufacturers and electric companies.
At one time, people had this idea (and I did too) that mining could be a democratic way to fairly distribute the value that crypto-currencies create. But I think we all now understand that this is economically impossible. If mining was more profitable than everything else people might do, then more people will mine, the difficulty will rise, and the profit will go away. It will always be, and necessarily so, that mining is just barely profitable if you have the best hardware and the best electric rates, because those people will increase mining until it's not profitable to keep increasing. All the money that goes into mining is value created by the crypto-currency that doesn't go into making it any better or helping it spread.
The genius of mining is that it uses the value a crypo-currency creates to provide the proof of work needed to keep the currency secure. It's a brilliant solution to a problem that Ripple doesn't have. As a way to provide the initial distribution of a currency, it's mediocre at best because it consumes much of the value the currency creates.
Right now, mining is costing the Bitcoin economy about $25 million per month. That's how much value Bitcoin, as a system, has to add just to hold the price even. Imagine if that money could go into making Bitcoin better rather than just keeping it secure.
