oh this is fun. I now have 1 DYM (only cost me 2500 magic internet moneys) and I can trade it all around the world, anyone who I give it to can redeem it at anytime. It is now possible to exchange this silver dimes over the internet fast and easy. The world will never be the same!
So just to get back to theory a bit, you are selling in the sense that the person who took delivery of 10 dimes has no obligation to buy back in and send you the dimes back, if a rush of people wanted deliver I imagen that you would be converting your XRP in to something that would buy you more silver (BTC or USD) How in the future would you show that you do have the dimes and how would we know that there are as many DYM's in the market as dimes you say you have?
I trust you, but how will others with out driving down south and meeting you face to face?
Also, nelisky if ripple where to fail, would the system still run? my understanding is that nodes on the network are getting payed to operate, if the XRP fees they get are not worth anything would they process transaction on the network. (very limited understanding of the ripple system, I just asume it a lot like bitcoin in this case)
I don't know the specifics of the contracts between nodes, if there are any, but while ripple is fundamentally different from bitcoin it does have one thing in common, the network is distributed which means that as long as there are 2 nodes, the network is alive between them (though disconnected from the rest, if there is a rest, and reconnection may invalidate things that diverged, just like in bitcoin).
So, when you said ripple dying I assumed no nodes communicating. Since I can run a node myself I have a copy of the ledger locally. Keep in mind ripple is still closed beta to some extent so there are not enough nodes in the wild to support the network on such fails, which is a good thing at the moment as the rules and code are still being tweaked and the ripple team has some control over which versions are available and thus prevents network partitioning.
As for you question to TTBit, let me try to explain. The person who took delivery gave back the IOUs to TTBit, which means TTBit doesn't owe that person the 10 dimes anymore... this is the real kicker, we usually see money as something of substance (even though that is more often than not untrue) but in this case there is no misunderstanding, having a DYM is not having a dime, in fact TTBit has no DYMs at all, there's no such thing for him as the issuer. What there is is a balance of dimes TTBit states he has and owes you. When he sends the coins and receives the DYMs he is in reality destroying the DYMs, because he owes them no more.
This means that if a bunch of people wanted delivery, that bunch of people would hold IOUs they would be redeeming and TTBit's "DYM contract" states he holds the physical dimes for every DYM issued, thus he would most simply send out the dimes and the IOUs would be extinguished.
Now, if demand would rise and he wanted to put more DYM into the market, keeping with the rules he put forward initially, he would have to acquire the dimes through whatever means he chose and hold them physically before issuing more IOUs, but that's just because he chose to do business like that.
You can choose to say you'll sell DYMs without holding dimes, but you can't sell TTBit DYMs without him holding the dimes, and for you to sell your own DYMs others need to trust you for them.