Why has Ripple decreased so much in Market cap? Used to be second to Bitcoin

[leopard2]

@ twiifm

Risk lasts for as long as you are holding an IOU.  This applies to all third-party services.  For example, if you wanted to use MtGox to exchange bitcoins to euros when the BTC exchange rate was favourable to Bitstamp, you were at risk from the moment you deposited bitcoins at MtGox to the moment the euro wire hit your bank account.  

OK that is true, but with Ripple you are suspended like that forever, the third party IS Ripple

BTC only requires a third party for a transition to fiat and back

[acoindr]

Why do you like ripple?

Lots of reasons.  Here's a few:

1.  It's currency agnostic
2.  It eliminates central clearing houses and centralized exchanges
3.  It federates payment networks (SMTP for money) ...

Open Transactions does the exact same thing, is open source and completely transparent. I wonder why I've never seen Ripple promoters speak favorably about that ...

[JoelKatz]

So Ripple's business plan is to build this bridge and help make itself obsolete. Why do I doubt that?

When Apple builds a new iPhone, they make the old ones obsolete. Very few businesses expect to be able to continue with the same business model making the same products forever.

[jonald_fyookball]

no one answered my use case question about replacing SEPA payments on a website with ripple.

[Peter R]

@ leopard2

Bitcoin is a robust decentralized system for directly exchanging assets in an unforgeable global ledger.  I think the value in bitcoin is high. 

This may sound harsh, but in my opinion:

- Ripple is a system that obfuscates counter-party risk,
- ripples are an essentially valueless token with a misleading name. 

That being said, I can perhaps imagine several small digital hawala networks becoming useful if they are composed of like-minded entities where sufficient trust can be established to surmount the counter-party risk associated with the IOUs.

[smooth]

So Ripple's business plan is to build this bridge and help make itself obsolete. Why do I doubt that?

When Apple builds a new iPhone, they make the old ones obsolete.

That analogy fails in so many ways.

Apple's business plan in creating the iphone was not and is not to "create a bridge." Show me a speech by Steve Jobs where he said that the reason to adopt the iPhone was as some sort of bridge.

[JoelKatz]

So Ripple's business plan is to build this bridge and help make itself obsolete. Why do I doubt that?

When Apple builds a new iPhone, they make the old ones obsolete.

That analogy fails in so many ways.

Apple's business plan in creating the iphone was not and is not to "create a bridge." Show me a speech by Steve Jobs where he said that the reason to adopt the iPhone was as some sort of bridge.

Apple's business plan in creating each iPhone is to meet a current demand, a demand that they expect to be temporary. You can view each iPhone as a bridge that meets people's present needs and lays the groundwork for future products that meet their changing needs in the future.

I wouldn't take this analogy too far. But every business plan is a temporary thing. Ripple Labs doesn't expect to be doing the same thing forever and its current revenue model will almost certainly become obsolete at some point. That may mean Ripple Labs does something else. It may mean Ripple Labs develops the things that make it obsolete. You can only plan so far ahead.

If your point is that we're likely to explore other revenue models before our current one runs out, then I would absolutely agree with you.

[smooth]

That being said, I can perhaps imagine several small digital hawala networks becoming useful if they are composed of like-minded entities where sufficient trust can be established to surmount the counter-party risk associated with the IOUs.

This was essentially the original (pre crypto) ripple. You created IOUs exclusively with your actual trusted friends and they could get canceled in the course of trade, but not traded. That seemed to never really go anywhere. Then this crypto VC bubble happened and we got where we are.

[JoelKatz]

That being said, I can perhaps imagine several small digital hawala networks becoming useful if they are composed of like-minded entities where sufficient trust can be established to surmount the counter-party risk associated with the IOUs.

This was essentially the original (pre crypto) ripple. You created IOUs exclusively with your actual trusted friends and they could get canceled in the course of trade, but not traded. That seemed to never really go anywhere. Then this crypto VC bubble happened and we got where we are.

You have basically the same problem Bitcoin has. If everybody used it, it would be great. But not enough people have an incentive to adopt it to reach a critical mass. One of the things the new Ripple does different is focus, at least initially, on gateways.

[smooth]

If your point is that we're likely to explore other revenue models before our current one runs out, then I would absolutely agree with you.

My point is that I'm skeptical of claims that you are creating a bridge to where "we" want to be, if that means a world that does not have trillions of dollars of legacy fiat currency markets that need to be "rippled." By and large the bitcoin community sees no need for a future where a company doing the sorts of things that Ripple does has a central role. That may simple be a lack of vision and the people running Ripple are just smarter than everyone else, or it may be a disagreement as to direction. I suspect the latter.

[smooth]

That being said, I can perhaps imagine several small digital hawala networks becoming useful if they are composed of like-minded entities where sufficient trust can be established to surmount the counter-party risk associated with the IOUs.

This was essentially the original (pre crypto) ripple. You created IOUs exclusively with your actual trusted friends and they could get canceled in the course of trade, but not traded. That seemed to never really go anywhere. Then this crypto VC bubble happened and we got where we are.

You have basically the same problem Bitcoin has. If everybody used it, it would be great. But not enough people have an incentive to adopt it to reach a critical mass. One of the things the new Ripple does different is focus, at least initially, on gateways.

It is likely the two do not in fact have (even basically) the same problem(s), because bitcoin has gone much farther much faster than original ripple. Your explanation of what is going on is contradicted by the evidence.
 

[Peter R]

That being said, I can perhaps imagine several small digital hawala networks becoming useful if they are composed of like-minded entities where sufficient trust can be established to surmount the counter-party risk associated with the IOUs.

This was essentially the original (pre crypto) ripple. You created IOUs exclusively with your actual trusted friends and they could get canceled in the course of trade, but not traded. That seemed to never really go anywhere. Then this crypto VC bubble happened and we got where we are.

That is very interesting and it does seem to explain what we are seeing.  I don't think a large global hawala network will work.      

Time to go for a walk and enjoy what's left of this sunny afternoon.

[JoelKatz]

My point is that I'm skeptical of claims that you are creating a bridge to where "we" want to be, if that means a world that does not have trillions of dollars of legacy fiat currency markets that need to be "rippled." By and large the bitcoin community sees no need for a future where a company doing the sorts of things that Ripple does has a central role. That may simple be a lack of vision and the people running Ripple are just smarter than everyone else, or it may be a disagreement as to direction. I suspect the latter.

Speaking for myself personally, I agree with you. I do see Ripple as a bridge. It's possible that the future evolution of money will be rippling among friends, but it's also possible that the future of evolution of money will be a trustless crypto-currency. It's also possible the future will be something none of us can think of yet.

The business plan we made for Ripple was the best we could come up with given the information available to us at the time. If you can think of a way we could do things better, we're all ears. We definitely don't expect to be doing the same thing forever. If there's no place for us in the future, so be it. Either Ripple Labs will do something else or we'll cease to exist.

Personally, I'm largely indifferent to the form future money and payment systems take. I see advantages of each, and both will likely improve dramatically over the next few years. The market will ultimately decide. Ripple was designed to meet present needs and to move in the direction its designers believed would be beneficial.

[smooth]

Ripple was designed to meet present needs and to move in the direction its designers believed would be beneficial.

Now we're getting somewhere. As with the iphone, meeting present needs is paramount. Steve Jobs never sold the iphone on the basis of the next iphone being better. It was always on the basis of what the (then) current iphone could do for its users.

If Ripple does useful things now, and most importantly you can communicate that in a way that is compelling and comprehensible to the audience, great. Right now you haven't even gotten past people being confused about what the term ripple even means.

This is not limited to this thread (or countless other essentially identical threads). Beyond this forum, I've talked to a lot of other people both online and offline who really have no understanding of what ripple does or how it benefits them at all.

[twiifm]

Ripple was designed to meet present needs and to move in the direction its designers believed would be beneficial.

This is not limited to this thread (or countless other essentially identical threads). Beyond this forum, I've talked to a lot of other people both online and offline who really have no understanding of what ripple does or how it benefits them at all.

I would say most people don't understand how banking works in general.  What they know is they don't like ATM fees or foreign transaction fees, etc.  I see Ripple having more potential as an institutional tool rather than a consumer facing product.  Consumers just want to make payments easier.  If Ripple can be adopted by big banks to make transactions easier for consumers then it'll succeed if not then it won't. 

[smooth]

I would say most people don't understand how banking works in general.

True, though they understand it well enough to use it, which is most certainly not true for ripple.

What they know is they don't like ATM fees or foreign transaction fees, etc.  I see Ripple having more potential as an institutional tool rather than a consumer facing product.

Alright then, since I'm not a bank or in the business of providing banking services, why do I ever (in fact frequently) hear about ripple. Again the targeting of the message and the message itself seems misdirected and confused.

[~Coinseeker~]

I would say most people don't understand how banking works in general.

True, though they understand it well enough to use it, which is most certainly not true for ripple.

This is again, because the Ripple protocol is not a consumer facing product.  It's like saying when you walking in the bank, there's just a computer sitting there with all the access to facilitate payments, on their proprietary software.  How many customers would know how to do it?  How many would even bother to try?

Ripple will really start making sense for people as more products and services are built, integrating Ripple as their backend.  Many times, you may never know you're using a Ripple powered product.  Just as you have no idea what goes on behind the scenes at PayPal or the ACH and Swift systems, or yes, even SEPA.  Once you start having merchant tools for easy website integration, different payment networks integrating, the benefits will become crystal clear.  But development takes time and Ripple Labs is not in the business of developing the entire infrastructure around Ripple.

As for bank integration, RL's has made great strides, although as was said, these active discussions can't be made public and for obvious reasons.  But you can see the fruit of their labor in instances like this from David Andolfatto, Vice President at the St. Louis Fed.

This is why I am relatively bullish on the Ripple protocol. So, in short, we have the Fed doing what it does, we have the banks doing what they do (financing investments), we have Ripple-like services taking over a big part of the payments business from banks, and we have Bitcoin-like cryptocurrencies financing a relatively small fraction of transactions. Something like that, though I will have to think about it much more carefully.  https://ripple.com/blog/5-questions-for-st-louis-fed-economist-david-andolfatto/

Lastly, there are still people in this thread who just don't under IOU's as it relates to Ripple.  There's a disconnect here between:

1.  IOU's as a means of credit.  Meaning, you can buy now and pay later.  (False)
2.  IOU's as a representation of an actual asset balance.  (true)

The latter is what you can utilize in Ripple.  If you can't differentiate between the two, Ripple will never make sense to you.  Furthermore, the counter-party risk is not in the IOU.  The counter-party risk, is in the 3rd party who holds your assets.  The IOU is just a liquid representation of that balance.  Like when you go to the casino, your cash is exchanged for poker chips.  The poker chip is an IOU backed by your cash.  You can turn it in at anytime and get your cash or you can give it away or lose it to another player and they now have ownership over that cash, because they hold the chip. (IOU)

Same thing, you're just exchanging balances at 3rd parties.  What's really going to be cool and when the power of Ripple is really going to become apparent, is when the federation of payment networks takes flight.  Assume Paypal, Bank of America, HSBC, Bitsamp, and BTC-e were all gateways.  Since you're able to exchange balances, your going to be able to do all kinds of things.

From your BoA account, you could directly pay any merchant that accepts Paypal.  Direct balance exchange via IOU's, without central clearing in the middle.  
Or, you could send direct from your Paypal account to BTC-e, without wiring money or having to buy BTC, pay the fee, then transfer the coins, wait an hour.  You know the deal.    

You just exchange your Paypal balance for a BTC-e balance a viola, you have USD or BTC or NMC on BTC-e.  And someone who had a balance on BTC-e, now has USD in Paypal.  Confirmed and irreversible in seconds.  

The possibilities are limitless.  Now, we can move our balances around, like we do email.  We can send email to any @email address, thanks to SMTP.  Thanks to Ripple, we'll do the same with value because right now, a Paypal user can only send to a Paypal user.  A bank of america user can only send to a BoA user, etc.  It's like pre-SMTP email.  When you really sit back and think about it, it's totally mind blowing that we're still stuck in these closed systems.  
 

[kololo]

NO news from the OC.  So the holder sold xrp.
Opencoin should do more work to let people use ripple.

[jonald_fyookball]

Ripple will really start making sense for people as more products and services are built, integrating Ripple as their backend.  Many times, you may never know you're using a Ripple powered product.  Just as you have no idea what goes on behind the scenes at PayPal or the ACH and Swift systems, or yes, even SEPA.

So we have to wait for those services to be built. Got it.

[smooth]

This is again, because the Ripple protocol is not a consumer facing product.

Maybe this is a pivot, and maybe it is a good one, but that has not always been how it was presented. For a while they were going out of their way to try to get people to sign up for ripple wallets, and in fact I have one. I found it very confusing and when I went back a few months later, it didn't even work with my browser any more. I didn't care enough to try to fix it. Maybe, with this pivot, they don't care if I care.