Topic: is ripple a trojan horse that will destroy bitcoin? - page 3. (Read 9832 times)

Grossly oversimplified: To perform a transaction, you announce it. Assuming there's no reason the transaction can't apply, every honest node (that is applying transactions) applies it. (If there's some reason the transaction might not apply, then we don't care what happens to it. But there is a mechanism to prevent divergence, of course.) Now, none of those nodes can accept the conflicting transaction because the node cannot construct a valid acknowledgement of a transaction that conflicts with a transaction they've already acknowledged. (Yes, the devil is in the details. I said this was grossly oversimplfied.)

Is there any place to read about the technicallities of Ripple?

Im specially curious about how they avoid double spending if it is a trully p2p network.

Ripple payments can be thought of as exchanges of IOUs. For example, say I owe you $100, Jack owes me $50, and you need to pay Jack $50. With a ripple payment, you can pay Jack $50 through me and the result is that instead of me owing you $100, I now owe you $50. Jack considers you to have paid him $50 because you made him owe me $50 less (which is just as good). This one transaction accomplishes the payment.

The sender loses the $50 he sent, the receiver gains the $50 he receives, and all intermediary parties are either neutral to the transaction or benefit from it.

There is no growth to the fee because there is only one transaction and each point it ripples through benefits the parties, or at least they are neutral to it. Otherwise, they wouldn't (or at least, shouldn't) have permitted it.

How does Corpco establish itself to a court as a creditor in the first place?  It is not as though they hold some sort of contract on which Acme has defaulted.

Certainly, Corpco would start its pleadings off by alleging that Acme owes a debt that has been assigned to it by Bobtech.  But what if Acme denies the debt exists or challenges the validity of the alleged assignment to Corpco?  The law doesn't recognize the "Ripple block chain" as any sort of binding instrument that would overcome any challenge of this sort.

Assuming future scandals are in the cards - where people repudiate Ripple debts on the premise they were hacked and the IOUs are forged and therefore aren't valid (you know this will happen at least as often as paypal "my account was hacked" chargebacks), no court is going to blindly swallow the presumption that "the ripple network says so, so it must be so!".

It would be different if Acme's debt to Bobtech took the form of some sort of written agreement, after which Bobtech executed some sort of written assignment to sell the debt to Corpco, the same way debt collectors buy consumer debt.  Courts recognize agreements like this when written properly.  But then, there's hardly any benefit to the decentralized part of Ripple anymore, it's no longer revolutionary.  Unlike Bitcoin, enforcement this sort of debt swapping arrangement is completely at the mercy of the existing legal framework, and may as well be a facebook app just like the one that lets you find a friend of a friend to take over your cell phone contract.

Corpco has the recourse of any creditor--put a lien on property, sue, etc.  Corpco could not have been paid with Acme IOUs by Bobtech if Corpco did not trust Acme for that amount.  Maybe Bobtech had some insider information on Acme and knew it wouldn't be able to pay its debts when it offered to pay Corpco.  When you accept an IOU from somebody, you are taking on that credit relationship.  If you're not sure about the debtor, don't issue the credit, or make sure you get a discount according to risk.

You have to login on ripple and pay before or after the actual "exchange" is made? 

Believe me, you are able to create the SEX currency on Ripple

How are fees dealt with in ripple?
It seems like payment providers will love this, as the single transaction is repeated many times as it ripples through. I pay my friend with paypal, my friend then pays his friend with dwolla, who then pays his friend with a wire transfer - n times.
For large amounts multiple credit lines will have to be used to make up the final amount. The fees would grow exponentially.
And who ultimately actually pays these fees? The initial seller? Do these fees ripple through too?

If only there was a way of doing this without fees (or chargebacks)

I just wonder what happens when Acme owes Bobtech, but Bobtech sells that debt to Corpco, and then Corpco can't collect on it because Acme can't afford to pay.  What's Corpco's recourse?

All the old stuff about the old Ripple thing all took the idealistic stance that you would issue credit to your neighbors/friends out of nothing, basically giving them a line of credit.

But surely you could equally well only issue credit in an amount equal to actual "deposits"?

Afterall, banks tend to have two types of credits they give you, the easiest to get is your account balance, which you get by making deposits and they grant in amoujnt equal to your deposits. Getting an actual "line of credit" is harder.

So here is how I see it non-idealistically working, taking that hard drive at the restaurant case for example:

1) The restaurant deposits with/in you a meal worth one hard drive, so you issue them credit equal to one hard drive.

2) The restaurant gives the employee one hard drive, so the employee issues them credit equal to one meal.

I am not sure why you give the hard drive to the employee, it seems to me you'd give it to the restaurant, and any deal they make with the employee is out of scope. So lets try again:

1) The employee deposits the meal with/in you, so you issue the employee the hard drive (deposit the hard drive with the employee).

2) The employee buys the meal from the restaurant with their wages.

That maybe works.

The important thing is, you don't issue credit until you receive a deposit, in this case a meal, and the employee does not issue credit to you until you deposit the hard drive.

This way it works like the credits known as "bank account balances"; the credit represents a deposit you already received.

The old Ripple system's documentation/propaganda/literature  jumped right over that stage, directly to "lines of credit", in which you issue credit before receiving the corresponding deposit, which is, of course, risky.

There is risk the other way around though too: the restaurant takes the risk that after depositing the meal in your stomach you will not see fit to assign them any credit in the Ripple system...

So its still the same old same old "who sends first" thing...

TL;DR: Want me to grant you $10 credit? Easy peasy: just send me $10 and once I have it secure in hand, I will grant you $10 credit...

-MarkM-

Hahaha



Seriously, you made my day.

Reminds me how bitcoin started with the first to buy pizza with bitcoins agreeing upon paying 10,000...

Is there more information other than the wiki page on how it works?

I picture it working like this:

I go to my chinese restaurant who accepts ripple. My bill is $50. Instead of paying the restaurant directly, I pay off one of his ripple debts by giving one of his employees a $50 hard drive. The restaurant gets $50 USD settled of its obligation to the employee, I get $50 of food, and the employee gets a $50 hard drive.

Yes?

"Promises to deliver oil" would, of course, go in the yes column, away from the "oil" itself.

The oil will not renege on delivering heat when submitted with oxygen into a chemical reaction.  And if I control a bitcoin and have its private key to myself, I will always have one bitcoin, regardless of what anyone else does or doesn't do.

It's just as easy to promise, and then fail to deliver, oil as it is for dollars.

Yes for Ripple.  No for Bitcoin.

Yes for dollars.  No for oil.

Yes for euros.  No for gold.

What do all the yes's have in common?  They are all based on promises, upon which the promiser can default.
What do all the no's have in common?  They are what they are, no more, no less.


I'm looking forward to seeing it be practical.  But it won't be very revolutionary if it is good for nothing more than a bunch of coworkers settling up on who pays for lunch.  It may as well be a facebook app.


That's true only up to a certain dollar amount.  When the transactions get big enough, the parties start to have the resources to invoke the law and to pursue things across borders.  Other developed countries have laws enforcing contracts and property rights too - they're just too expensive for you and me to invoke from home.  A reputation in a "system" is only so valuable and a large percentage of the population is willing to totally trash their reputations - look at how many people have crappy credit in real life, let alone how much worse it gets if people can start over with a new "profile" any time they want like they can online.  One certainly isn't enough for a major transaction like real estate or an overseas shipment of several shipping containers of goods, but sure, it's good enough for lunch money.

I don't see Ripple IOU's as debt. I see Ripple IOU's as the price of a friendship or if you like the price of trust you have in some other person. If business relations are concerned I see Ripple IOU's as the price of a business reputation!