Ripple is not a scam - and you may be making yourself vulnerable to actual scams

[Sukrim]

Need to withdraw diminishes as the network expands; the IOU becomes a functional placeholder for the currency. Depending on the currency, withdrawal from the gateway could be rapid---and potentially instant if banks begin to act as gateway services.

No they don't.  We have already determined that you won't get IOUs from anyone you do not extend a trust line to. Therefore the IOUs are not generally tradeable.

If you guys don't understand the system then ...

They are generally tradeable, that's why market makers exist in Ripple. As long as there is a market path between 2 currencies, you can make a transfer in Ripple. You don't need to trust the issuer that the recipient trusts.

[mmeijeri]

No they don't.  We have already determined that you won't get IOUs from anyone you do not extend a trust line to.

And that's a feature, not a bug.

Therefore the IOUs are not generally tradeable.

Of course they are, that's the function of gateways, to issue and redeem IOUs that can be traded between any pair of individuals who trust the same gateway. This is very similar to what banks and payment processors do. You deposit cash with them and are then able transfer money between accounts without having to withdraw immediately.

If you guys don't understand the system then ...

Don't criticise something you clearly don't understand.

[durnkenWiz]

A issuer should be visible somewhere for every currency in your ripple wallet. Maybe not straight when you look at balances, but somewhere you should be able to see how many btc you got from bitstamp and how many bitcoins you have issued by justcoin. Just an example. Also, how do you choose how to shorten an issued asset? I for instance issued bernankoins and it shortened it to ber instead of the "official" bek. And what happens when someone issues something let's say called "bernardo" and ripple shortens that to ber too?

[CoinManiac]

Someone fund my ripple wallet with 5 or 10 XRP to get started..  

You need ~31 XRP to get started, 20 to activate your account, 10 for one offer in the order book, and 1 for transactions costs. The first two are minimum reserves, that is, the functionality won't work if you have less than that amount in your account, but they are not deducted. You get your 10 XRP back as soon as the offer is accepted or canceled. The 1 XRP for transactions costs will last you a long time because transaction fees are tiny.

If you want to get your hands on some XRP, you can buy them on an exchange, buy them from someone informally or earn them by donating CPU cycles to things like cancer research at computingforgood.org.

Thank you for the info

[Sukrim]

A issuer should be visible somewhere for every currency in your ripple wallet. Maybe not straight when you look at balances, but somewhere you should be able to see how many btc you got from bitstamp and how many bitcoins you have issued by justcoin. Just an example. Also, how do you choose how to shorten an issued asset? I for instance issued bernankoins and it shortened it to ber instead of the "official" bek. And what happens when someone issues something let's say called "bernardo" and ripple shortens that to ber too?

It is visible on the "trust" tab.

Actually currency codes used "should" only be the official ISO ones (which already XRP and BTC both violate), this is obviously not enforced though. http://www.ifex-project.org/our-proposals/x-iso4217-a3 might be a solution, seems to be dormant atm. though.

[SGExodus]

People will use good gateway directly without the need to go through an obscured crypto-washed intermediary like Ripple.

The gateway is a part of all the Ripple system, and there isn't anything obscure in Ripple.

I come to the conclusion that maybe if someone isn't able to understand Ripple, he isn't also aware to how Bitcoin works.

If you claim to understand Ripple, show us a real use case and not some hypothetical example to articulate the benefits.

Illustrate how you can send 1,000,000 Yen from Japan to someone in US at the best USD conversion rate that is cheaper and faster way than existing options out there today.  Proof it.

[smooth]

Ripple is misunderstood because no one can understand it.

It will take time. Much like Bitcoin itself, it moves in a radical new direction.

No, that's the huge difference people are explaining, and you keep ignoring. It does not "take time" for someone to understand Bitcoin to a reasonable extent. Someone with a basic understanding of cryptography and computers can read the original Bitcoin paper from five years ago (as I did 3 years ago) and understand it pretty well. There is no such 8-page Ripple paper.

[mmeijeri]

Anyone who can understand Bitcoin and doesn't understand Ripple isn't really trying. Could be lack of interest, lack of time, could be denial or massive cognitive dissonance, could be dishonesty.

[smooth]

Anyone who can understand Bitcoin and doesn't understand Ripple isn't really trying. Could be lack of interest, lack of time, could be denial or massive cognitive dissonance, could be dishonesty.

You're absolutely wrong, in general. I read the Bitcoin paper a few years ago and I largely understood it. I read what I could find about Ripple a year or so ago, and I didn't really understand it, at least not in a big picture "How will I use this?" and "How does this entire system work?" sense. Granted I understand Bitcoin much better now than I did after reading the paper, but in terms of relative level of understanding after reading through what I was provided by the designer, it was simply night and day. That is a fact.

There was no particular difference between the two in terms of relative lack of interest, lack of time,  denial, or massive cognitive dissonance, nor am I being dishonest.

EDIT: I will clarify this a bit. I believe that I could possibly understand Ripple if I put in the effort to study it and work through the details. The problem is that I have no particular reason do to so. Giving me a few thousand free Ripples isn't enough incentive for me to care about this one out of many apparently-similar competing solutions. The difference with Bitcoin was: a) it was clear that it did something fundamentally new (as opposed to one-of-many or arguably-better), and b) I didn't need to put in that effort, because it was just easier to understand.

[ahbritto]

You can find some Ripple papers and videos here:

• https://ripple.com/wiki/Press_and_announcements

[madawc]

I like it. I am mining on it. I invest a little now becose is cheap.

[mmeijeri]

EDIT: I will clarify this a bit. I believe that I could possibly understand Ripple if I put in the effort to study it and work through the details. The problem is that I have no particular reason do to so. Giving me a few thousand free Ripples isn't enough incentive for me to care about this one out of many apparently-similar competing solutions. The difference with Bitcoin was: a) it was clear that it did something fundamentally new (as opposed to one-of-many or arguably-better), and b) I didn't need to put in that effort, because it was just easier to understand.

For me the killer use case was and is as a distributed exchange for buying / selling Bitcoin. I learned about it just after I had learned of Bitcoin, some time in April I think. It may have been in this article: Ripple, a Peer-to-Peer Financing Network, Could Make Bitcoin Great (Or Destroy It)

Another very promising one is remittance payments by migrant workers.

[casascius]

I have the sentiment that I wish the problems I point out with Ripple didn't exist and that it is just my imagination / overskepticism / whatever.  I sincerely hope someone proves me wrong.  I believe that the problem Ripple sets out to solve is really one worth solving, I'm just not convinced Ripple fits.

I suppose a lot of people say the same thing about Bitcoin, and relative to the same argument, I'm on the other side of the camp.  (though wouldn't be opposed to a better bitcoin with some new breakthrough as groundbreaking as the block chain)

[Sukrim]

Well, dealing with stuff that is not designed to be digital (e.g. most currencies on that planet) makes it really hard to apply the same measures as Bitcoin. After all, that's probably one of the reasons Bitcoin was invented in the first place.

Ripple definitely improves dealing with arbitrary assets, imho as much as possible - maybe in the future even more might be possible (BitShares for example tries to do something that goes potentially beyond IOUs), for the moment it seems to be one of the best and most developed solutions out there.

If you claim to understand Ripple, show us a real use case and not some hypothetical example to articulate the benefits.

Ripple can be MUCH easier explained and understood (how it works + the use cases) if you compare it to BitPay, not Bitcoin.

Some potential use case of Bitcoin seems to be for some people to act somehow like XRP in the global financial system (e.g. you buy BTC for USD, send them back home to Egypt and sell them for your local currency there), maybe that's why they don't see the use case for Ripple itself too or feel that it threatens BTC by making XRP more useful than BTC on their system.

[Dini]

Ripple is interesting but it seems too expensive to be the best crypto system for international transfers, which seems to be its primary purpose.  I can transfer money (fiat or crypto) to/from the exchanges that I like to use either for free or very low fee.  But it seems the cost of putting money in and getting it back out of the ripple network totals ~2%.  Still probably lower than the old fashioned mechanisms of currency exchange or transfer, but I think it is too high, especially for larger amounts.  If I factor in the commission at exchanges, the cost doing currency exchange or international transfer using bitcoin instead of Ripple is about half that or even less, depending on volume exchanged.  Except the cost may even be negative if one times it (lucks it) such that one makes a little money via increase in btc value when converting back to fiat.  So, I think the gateway entry/exit fee needs to be much lower.  But of course the Ripple system primarily makes money on that fee (and I think that's why Ripple Labs partners with the Gateways....). Eventually (after the giveaway period) it will make some money selling xrp, but really the entry/exit fee is where the profit is and why there was so much interest in investment from Silicon Valley -- or why else, am I misunderstanding the system and what motivated it? So my guess is using exchanges will remain cheaper (and easier to understand).  Some of the exchanges I use have made a very good impression on me, and I think these will have long-term success and good reliability. As for more routine payment uses (that is, not currency exchange or international transfer), like buying that cheeseburger at McDonalds, why would anyone want to incur a ~2% expense (well, ~1% for customer, ~1% for merchant)? The cost of the "great convenience" and "simplicity" of paying via the ripple network?  But I can see it as being an early beta for something that will transition into a cheaper and simpler system.

[mmeijeri]

The two main use cases I see at the moment are remittances and buying / selling Bitcoin. A Turkish migrant in the Netherlands who wants to wire 100 euros home is faced with a minimum fee of 15 euros. By contrast, sending 10,000 euros costs 20 euros, but few people send such large amounts.

If this takes off, I expect economies of scale and competition to drive down prices considerably.

[Dini]

The two main use cases I see at the moment are remittances and buying / selling Bitcoin. A Turkish migrant in the Netherlands who wants to wire 100 euros home is faced with a minimum fee of 15 euros. By contrast, sending 10,000 euros costs 20 euros, but few people send such large amounts.

If this takes off, I expect economies of scale and competition to drive down prices considerably.

That's true, and I became interested in bitcoin in part because I wanted to transfer small amounts internationally and the wire transfer fees seemed excessive. So either Ripple or the bitcoin+exchange method is much better than wire transfer, but Ripple isn't better than simply using Bitcoin as intermediate, unless the migrant doesn't have a bank account in the Netherlands and wants to transfer his cash euros to Turkey, and a local Ripple gateway accepted his cash.  But there are not very many gateways at the moment even for bank transfers; haven't researched how many accept cash for entry into the ripple network though I assume eventually they will.  And if he is using a Gateway via a bank account in the EU (I think a legal migrant could get an account easily), then it would be better to use the exchanges I think, for a free or cheap SEPA transfer.  Maybe depends on whether the folks back home can retrieve currency from an exchange more readily than from a Gateway.  Also, I like being in charge of the crypto intermediate, when I buy it and when I sell it.  I don't think that's the point at which Ripple Labs profits (don't understand enough to know for sure, but my understanding is it automatically uses the market rates) but it is leaving it up to luck more so than if I have control of the timing.  I suppose that's less of an issue when/if crypto values become less volatile, as will likely be the case.

I'm very much a "penny pincher" and pay lots of attention to fees, but my guess is, so would a Turkish migrant shipping that 100 euros home.

[mmeijeri]

That's true, and I became interested in bitcoin in part because I wanted to transfer small amounts internationally and the wire transfer fees seemed excessive. So either Ripple or the bitcoin+exchange method is much better than wire transfer, but Ripple isn't better than simply using Bitcoin as intermediate, unless the migrant doesn't have a bank account in the Netherlands and wants to transfer his cash euros to Turkey, and a local Ripple gateway accepted his cash.

I'm talking with my neighbour, who is a Turkish entrepreneur, about setting up something like that. Since bank accounts are free for private citizens in the Netherlands everybody has one, so that's not the problem.

 But there are not very many gateways at the moment even for bank transfers; haven't researched how many accept cash for entry into the ripple network though I assume eventually they will.

Opening a small shop to handle cash transactions wouldn't be a problem. The shop could then deal with the gateway, or maybe directly buy BTC.

 And if he is using a Gateway via a bank account in the EU (I think a legal migrant could get an account easily), then it would be better to use the exchanges I think, for a free or cheap SEPA transfer.  Maybe depends on whether the folks back home can retrieve currency from an exchange more readily than from a Gateway.

Withdrawing from a gateway to the Turkish banking system is possible, but then you still incur wire transfer fees. That's not prohibitive for large amounts, but then you lose the advantage of using a crypto intermediary.

 Also, I like being in charge of the crypto intermediate, when I buy it and when I sell it.  I don't think that's the point at which Ripple Labs profits (don't understand enough to know for sure, but my understanding is it automatically uses the market rates) but it is leaving it up to luck more so than if I have control of the timing.  I suppose that's less of an issue when/if crypto values become less volatile, as will likely be the case.

In the long term the most convenient thing would be to issue EUR IOUs and TRY IOUs (or to use those issued by some reputable third party) and to use the distributed exchange that's built into Ripple, but that will take a lot of work to deal with compliance.

[Dini]

Okay, that makes sense.  It would be a nice system for people who work in a foreign country for only a short time and don't want to set up a local bank account, which can be a hassle and confusing especially if one doesn't speak the language well. Or for students, etc.  The bank account also usually comes with fees.  In any case I never had the impression that Ripple was a scam, and I hope it ends up being successful and useful.

[Dini]

Maybe Ripple Labs should set up a Bridge for Peercoin, my favorite currency  .

Also, I suppose if Ripple really takes off and proves to be very secure, then the exchanged money could just stay in the network, much as I almost never handle cash these days, and my money just stays in the "banking network" of credit card and bank accounts. Then the entry/exit fee is less objectionable.  I know it is trivial in your 100 euro transfer example, but if the Ripple network becomes a frequent mechanism of exchange, then that fee would add up to be significant. Less than what merchants pay for credit card use but not by an enormous lot.