Warning: What I'm about to describe is highly difficult for most to get their heads around. It is, however, 100% accurate and confirmed by those who work at Ripple labs.
Since that was far removed from 100% accurate, which Ripple Labs employee do you claim you talked to about this? Could you point to the relevant forum threads, or was it a private exchange?
Concept 1: Imagine a new currency, XYZ, that is issued on Ripple, but cannot be withdrawn outside of Ripple. This XYZ is NOT an "IOU", as it is not being held by the gateway for it to be transferable elsewhere. This XYZ is a legitimate unit of potential value as a medium of exchange, just as much as any altcoin outside of Ripple. There is no fundamental difference in terms of monetary economics. (In practice, but beside the point, XYZ transactions occur in 1 second and cost nothing to "mine", while e.g. BTC takes 1 hour to get 6 confirmations and is very expensive to "mine").
You are describing an IOU that isn't backed by anything. i.e., a ripple account issues whatever it wants with no intention to ever redeem it.
Ripple only has OUIs and XRP. There's literally no other unit of value built in the system.
This XYZ is a legitimate unit of potential value as a medium of exchange, just as much as any altcoin outside of Ripple. There is no fundamental difference in terms of monetary economics. (In practice, but beside the point, XYZ transactions occur in 1 second and cost nothing to "mine", while e.g. BTC takes 1 hour to get 6 confirmations and is very expensive to "mine").
No, there are some rather huge fundamental differences. An altcoin is supposed to have a well defined, predictable money supply. As you well know, Ripple IOUs without backing can be created at will out of thin air.
So what does WLD's money supply look like? How do we know you won't issue more than you should, or perhaps to the wrong people? Because you tell us so. Who are you? We apparently don't need to know.
I don't believe there's anything "highly difficult" to grasp here.
Concept 2: Now, imagine that XYZ can now be withdrawn outside of Ripple, e.g. to be held on a mobile payments platform, which also allows fiat currencies to be held there. One (simple-minded) interpretation is that XYZ is an "IOU" on Ripple, and is not the "real thing" on the mobile payments platform. Alternatively, the more logical interpretation is that XYZ is the "real thing" on both platforms, on one condition. This condition is: if I transfer 10,000 XYZ from the mobile payments platform to Ripple, the 10,000 XYZ is "destroyed" on the mobile payments platform, and "create" it on Ripple.
A ripple IOU cannot be "withdrawn outside of ripple". A gateway can accept an IOU back and redeem it for something outside of ripple in return.
Your terminology is once again painfully fuzzy, and apparently by design, since you proceed to talk about IOUs existing outside of ripple.
Glossing over the inconsistencies, it seems like you are talking about having XYZ tokens that exist outside of Ripple. Is that what you mean, and how are those tokens actually implemented?
And here you have it, you have just learned something you never knew about Ripple. It can actually be used to transfer currencies (other than XRP) in a form that is not an IOU.
If chutzpah was a monetary unit, you'd be rich.
After a cursory look at the ledger, it seems like my previous off-the-cuff remark about XNF's relationship to WLD was, oddly enough, not entirely unwarranted.
Perhaps I'll keep digging if you keep making fanciful claims.
