Topic: PSA: 'Bitcoins' in Ripple are not Bitcoins. They are not real, can be seized. - page 4. (Read 8435 times)

I guess for me the fact that ripple had a booth at Bitcoin 2013 speaks volumes.

Litecoin, Freicoin, name coin, terracoin etc. all did not ever have a booth at a conference.

Ripple is controlled by a single entity, OpenCoin Inc.

That basically sums it up on all of its flaws as a system.

Any system where I have to trust another human being to be the backing "alternative payment system" to traditional banking systems is not a system I want to use.

Trusting a single entity says it can be shut down implicitly by any governing body or regulators if they so choose.

Looks like a broken system to me.

From the Ripple Website:


And the link:
https://ripple.com/how-ripple-works/

Ripple is not a "coin" and was never meant to be, and this is where it's detractors are willfully trying to mislead you.  XRP is a  common denominator liquidity provider inside the system that facilitates the transfer of differing currencies, including bitcoin.  It is used so that one can turn a currency into another one and is done automatically and seamlessly to make payments easy.  Any value gained by holding this internal liquidity provider is a side effect, but not the main purpose of ripple. 
   The whole "Oh, its premined!" argument is laughable, because it was never meant to be a mined cryptocurrency in the first place and this concept is something that some members of this forum cannot seem to grasp, therefore they attack, mislead and just basically lie because they're afraid of something unknown. 
Tradefortress has admitted he was a supporter of Ripple at one time, so he obviously saw something of value in it, but it seems mainly because it is not opensourced (the client is, BTW) he has decided to go into seek and destroy mode using basically nothing but speculation as attack vectors.  We'll see who's the fool in time.

I want this on record that I cannot understand Ripple.  I am not the smartest on these forums, I know that, but when I found bitcoin I keep researching the answers to questions I kept having.  I am still in that research process, 2+ yrs later:  and I'm still finding answers, and I'm never left hanging without an answer - I am always able to find it for myself or ask Freemoney to explain it to me.

With Ripple, I only generate questions, not answers.  How the pre-mine work?  what is an xrp, in reality? who got 50B xrps?  so they hold all the Ripple "debt" ?  so the initial friends of opencoin get most of the initial rights to issue trust (debt) ? - I watched that video about Gateways and pathways and became extremely confused.  I cannot find any answers.  How do I sell 1 btc for USD?  Is this possible with ripple?

It seems way too complex and not needed in any way. 

I have said this about litecoin / devcoin / feathercoin [lol] / the other alt-cryptos - there is 1 world-wide adopted crypto-currency, it's called bitcoin, and many many many businesses will be built on top of this amazing layer - PPl will try and copy this bitcoin model in many ways, trying to create another "base layer" for others to build on, but there is not a second bitcoin IMO.

After reading the whitepaper and their website, it seems to me that Ripple is trying to be bitcoin, or seems jealous of bitcoin - but again I admittedly do not understand it nor will take much more time to do so unless many of the bitcoin'ers that I respect start supporting it or at least explain it to me.

But let's assume for a moment that OpenCoin will holds it's promises, delivers opensource server and we will see that it's truly decentralized. Then is there a problem with debt still there or not really?

The thing is that I don't see their incentives of failing to do what they promised. Yes, they hold 50bill. of XRP, but there is no way they can dump it and get rich quick. It's just to much to be absorbed in the open market unless Ripple network will become trustworthy and widely used. And this in turn requires opensource servers and decentralization.

Ripple forces you to take debt, unless you use XRP which is premined.

The government can seize all BTCs an exchange has with a court order, because all the BTCs are kept in a centralized location. However, it is much more impractical for federal agents to seize decentralized storages.

Ok. But what's the difference with BTC? I have 10 BTC and took 50 more from you as a debt (without Ripple). Now goverment breaks in my home, siezes my PC and puts me in jail for 10 years for "money laundering" or something. How this doesn't dramatically reduces the value of my debt to you?

Not a joke.

OpenCoin Inc has substantial capital in promoting a flawed scheme to get them rich to the detriment of the Bitcoin ecosystem. Make no mistake, OpenCoin Inc's goals are to kill bitcoin.

I've already responded to this. The government can seize the backings behind the debt, which dramatically reduces the value to the point where it isn't worth anything.

Take a look at how BTC debt is going for.

Looking at this page and your "facts", this still seems like an elaborate joke to me that I just don't get (yet)...

On the other hand, maybe you are really convinced that if you spot a scam, you need to invest money to make people aware of it?

+1. It's in the Ledger of Ripple network.

mayby you should explain why you are paying thousands of dolars to people on this forum to say ripple is scam before we start taking you are saying seriously

Ask some Ripple users, I bet more than half don't know the difference, and it's OpenCoin Inc's fault for not stating it obvious enough.

Ripple just sounds too complex to be widely accepted, I believe most of the people's IQ are capable of understanding the main benefit of bitcoin, but not ripple

Debt is slavery, this is another negative advertisement effort from ripple's IOU

Uhhh, no shit Sherlock..??

With Ripple (and OpenTransactions) you are required to trust an "issuer" with the underlying asset.  This is required for legacy assets like USD, but there is no technical reason that this is required for BTC.  All of the benefits of Ripple can be had with the current blockchain and a properly designed, limited trust, network of Ripple or OpenTransactions servers.
By "limited trust" I mean that your assets are in your control at all times.

Let me explain in more detail:
Currently, any "value" in your account is an IOU from a trusted issuer.  Say Alice Bank and Trust deals in USD.  You can transfer USD into Alice's account.  In exchange she will give you a USD IOU within the Ripple system.  You must trust that Alice will safely store all of the USD she has been given.  In theory, for every USD IOU that Alice has given out, there is 1 USD in their account.  Anyone should be able to give Alice one of her IOUs and be given USD in return.  If Alice is not careful with the underlying asset, all her IOUs can suddenly become worthless.  If you deal in Alice issued USD IOU's in Ripple, you are trusting Alice will remain solvent and a good actor.

Currently, the same process is used for BTC in Ripple.  Some issuer must give you an IOU that is theoretically backed by BTC.  This is not required.  Lets look at some examples of the advantages Ripple gives you:

Atomic transactions - You can transfer BTC IOU's for USD IOU's with no trust.  This is incredibly useful if you want to build a decentralized exchange (judging by recent events, we definitely want one of those).  You don't need to use BTC IOU's though.  It is possible to transfer USD IOU's for raw BTC.  You must risk your legacy assets with an issuer, you do not need to trust and issuer with your BTC.  Think of the Ripple network as an alt-blockchain.  We have strategies to do inter-chain atomic transfers (https://bitcointalksearch.org/topic/p2ptradex-p2p-trading-between-cryptocurrencies-91843, https://en.bitcoin.it/wiki/Contracts#Example_5:_Trading_across_chains).
There is no technical reason why this cannot be done within Ripple.

Instant transactions - Ripple can do instant transactions only because you trust that a small number of Ripple servers will never attempt a double spend.  This is perfectly fine for old and well respected servers.  Double spends are easy to prove after the fact, and the servers will work together to keep eachother honest.  It would be exceedingly difficult to successfully perform a double spend, and if successful, that server will be banned for life and all the trust it had built will be lost.

However, we don't need to trust the Ripple servers (or issuers) with control of our assets to gain this ability.  We only need to give the servers the authority to certify our transactions.  This can be done with the block chain using multi-sig transactions.  Create an account where, to spend the coins, your personal signature is required as well as the signature of the server.  When you create a transaction, you send it to the server for certification.  The server checks to make sure you have not tried to spend these coins before, and if everything checks out, it signs our transaction and broadcasts it to the bitcoin network.  Any other bitcoin user can see this account is protected by the server and can choose to trust a transaction from this account with no confirmations.  As long as the other user trusts the server to certify against double spends, accepting the transaction is safe.
The server can never steal your coins but, if the server disappears, you will be left unable to spend your coins.  This is a better situation than we have now with trusting a Ripple issuer (if they disappear the IOU's are worthless as well).  There are technical solutions to this problem that would require only minor additions to the bitcoin protocol.

Micro payments - Some types of micro transactions can be handled on the bitcoin network now (https://en.bitcoin.it/wiki/Contracts#Example_7:_Rapidly-adjusted_.28micro.29payments_to_a_pre-determined_party).  These are transactions where you have an ongoing relationship with the other party.  This works if you will be spending between, say 0.05 BTC and 10 BTC, you just don't know exactly how much you will be spending at the beginning of the transaction.  This does not work if you will be sending only 0.0001 BTC to a given user (say buying access to news article).  A Ripple-like server network can help here as well by being an intermediary.

Lets say you are playing an MMORPG with an economy based on bitcoin.  You commonly want to send very small amounts of bitcoin to different users.  Each transaction may be 0.0001 BTC or so, but you tend to transact 0.1 BTC per week in the game.  The workflow in the link won't work well because you want to setup a large number of small transactions with a number of different users.  So, every player in the game sets up an account with the intermediary server.  You reserve 0.5 BTC for possible payments throughout the week.  The 0.5 BTC is not transfered to the server, it is just held in reserve so that you can't spend it elsewhere durring the week.  When you make a transaction with another player, you increase your payment to the server by 0.0001 BTC and the server does the same with the other player.

In this scenario, you are trusting 0.0001 BTC to the server.  They could take your coin and refuse to give it to the other player.  However, this will be easy for you and the other player to spot and you both would stop doing business with the server.  You would only trust the server with the largest micro transaction you conduct.  By definition, I don't expect micro transaction theft would be a very lucrative business for a Ripple server.

In conclusion.  Don't trust your BTC with an issuer.  Build better tools.  Ripple is great for lifting legacy assets into the modern bitcoin-like asset domain.  That isn't needed for BTC, it already has all the features you need.

What good are BTC's in your wallet, if they have little to no value because business' won't accept them?  No mass adoption, no Bitcoin.  It's real simple.  Ripple is the way to mass adoption that Bitcoin could never do on it's own.  Ripple equals legitimacy for Bitcoin.   Embrace it.

That isn't as good as actually having the bitcoins in your wallet. What if you get into a traffic accident? What if your government outlaws trades over X not using legal tender? Are you going to go to prison for that just so you uphold your promise?

There are many factors outside your control that makes it an incredibly stupid idea to store bit coins for a large amount of time in anywhere but your wallet.

Partially true. Not ALL the users, just the people who hold the gateway IOUs. This is no different than MtGox getting seized.

However with Ripple I expect that we will see larger, well capitalized existing businesses who are already fully licensed as money transmitters in the United States getting on board in a way that they are not getting on board with Bitcoin, for precisely the reason that Ripple is more compatible in interfacing with the traditional financial system.

As of now any business that wants to be serious about Bitcoin has to deal with one or more mickey-mouse exchanges. Even if you're going through Bit-pay, they are still dependent on MtGox. But with Ripple's distributed order books, plus the 'profound liquidity' creating perfect competition for market makers, transactions in Ripple do not have the single point of failure that we are seeing with Bitcoin.