Some thoughts on Ripple

[k99]

I agree that that lack is a big problem. But I dont see that Ripple is the solution as it needs gateways which are companies (exchanges, banks,...) which can be shut down.

It's still a major improvement. And consider Hawala, because Ripple is in part a digital verison of Hawala. Despite their best efforts governments around the world haven't been able to suppress it. And even if just one jurisdiction allows Ripple, everybody with an internet connection can use it. Bitcoin enthusiasts in China can trade in Bitstamp IOUs, even though it might be difficult to exchange them for yuan. As long as they're legal somewhere, they'll keep their value.

The Hawala system is at least in Germany stricly controlled/forbidden:
http://de.wikipedia.org/wiki/Hawala

The distinction between gateways and individuals issuing IOUs is blurry. Anyone can issue IOUs.

Can you layout a simple step by step scenario with 2 users (if users are issuers not gateways) who are trading BTC/USD in Ripple?
Just a scenario if I want to sell 1 BTC for 1000 USD and then a few days later sell those 1000 USD to x BTC. I dont understand how that could work without gateways (at the end I want real BTC and real USD not IUOs - if a gateway is needed then lets add it to the scenario with all trust implications). Also I would like to see in every step the trust limits (possible loss).
I tried to find on the wiki page a detailed example, but they are too hi-level and not covering all my questions.

Here is an article about Ripple which meets my opinion very close: http://bitcoinmagazine.com/7275/ripple-is-officially-open-source/

But thanks for the discussion and I would be pleased if you could give me more detailed information about how it really works (above scenario).

[mmeijeri]

The Hawala system is at least in Germany stricly controlled/forbidden:
http://de.wikipedia.org/wiki/Hawala

Sure, it's forbidden in some jurisdictions. That doesn't mean it no longer exists in those jurisdictions.

Can you layout a simple step by step scenario with 2 users (if users are issuers not gateways) who are trading BTC/USD in Ripple?

They can trade using their trust graph. If there is a path from A to B, then they can conduct a transaction and their balances as well as those of the individuals in between in the trust graph will be updated. Periodically each party can settle the netted transactions with their direct neighbours. Settling can be done with any payment mechanism, including cash.

[bitcoinBull]

Can you layout a simple step by step scenario with 2 users (if users are issuers not gateways) who are trading BTC/USD in Ripple?
Just a scenario if I want to sell 1 BTC for 1000 USD and then a few days later sell those 1000 USD to x BTC. I dont understand how that could work without gateways (at the end I want real BTC and real USD not IUOs - if a gateway is needed then lets add it to the scenario with all trust implications).

You are correct, it does not work without gateways. Just like there is no bitcoin trading without a bitcoin exchange. Okay, you can use localbitcoins, but even in that case, the price is agreed base on the price at an exchange. And exchanging through an individual on localbitcoins would be like exchanging through ripple where the "gateway" is an individual rather an a centralized exchange - you still have to trust them to pass you the "real money" as you pass them the coins.

[nobodysbusiness]

Someone I know is heavily involved in Ripple, to the point of trying to set up one of those 'gateway' things as a business. He's a smart guy and I don't think he's gullible enough to fall for an obvious scam, but perhaps the Ripple people are clever as well and have some secret to making money beyond their public declaration that they've 'premined' some ripple for the purposes of bringing in a return as a business (I'm pretty sure they had originally posted that on their web-site, didn't they?).

[mmeijeri]

You are correct, it does not work without gateways.

It could still work as a friend to friend network. You could say that everybody acts as a gateway for their direct neighbours in the trust graph. The trust is essential of course, just as it is with non-Ripple Bitcoin exchanges.

[bitpop]

Someone I know is heavily involved in Ripple, to the point of trying to set up one of those 'gateway' things as a business. He's a smart guy and I don't think he's gullible enough to fall for an obvious scam, but perhaps the Ripple people are clever as well and have some secret to making money beyond their public declaration that they've 'premined' some ripple for the purposes of bringing in a return as a business (I'm pretty sure they had originally posted that on their web-site, didn't they?).

I still have no clue how this crap works but if doesn't give me real bitcoins or cash at the end the day he's going to be in trouble

[bitcoinBull]

Someone I know is heavily involved in Ripple, to the point of trying to set up one of those 'gateway' things as a business. He's a smart guy and I don't think he's gullible enough to fall for an obvious scam, but perhaps the Ripple people are clever as well and have some secret to making money beyond their public declaration that they've 'premined' some ripple for the purposes of bringing in a return as a business (I'm pretty sure they had originally posted that on their web-site, didn't they?).

I still have no clue how this crap works but if doesn't give me real bitcoins or cash at the end the day he's going to be in trouble

Of course it does. Ripple is a deposit method on Bitstamp. You can transfer funds on ripple to bitstamp, and buy BTC.

Or you can just do it automatically from the Ripple client. Just click "send", put in a BTC address, and it will use the cheapest bitcoin bridge (usually Bitstamp's) to deliver BTC to the bitcoin address.

[bitcoinBull]

Someone I know is heavily involved in Ripple, to the point of trying to set up one of those 'gateway' things as a business. He's a smart guy and I don't think he's gullible enough to fall for an obvious scam, but perhaps the Ripple people are clever as well and have some secret to making money beyond their public declaration that they've 'premined' some ripple for the purposes of bringing in a return as a business (I'm pretty sure they had originally posted that on their web-site, didn't they?).

I still have no clue how this crap works but if doesn't give me real bitcoins or cash at the end the day he's going to be in trouble

Of course it does. Ripple is a deposit method on Bitstamp. You can transfer funds on ripple to bitstamp, and buy BTC.

Or you can just do it automatically from the Ripple client. Just click "send", put in a BTC address, and it will use the cheapest bitcoin bridge (usually Bitstamp's) to deliver BTC to the bitcoin address.

See below, I have both XRP and USD (bitstampUSD) in my ripple wallet. I can choose to send either, it will automatically be traded for BTC on the ripple order books, and sent straight to the bitcoin address.