Topic: Ripple: A pre-mine? Does it matter? - page 3. (Read 13975 times)

Thank you for a straight answer. Now we can move forward honestly and state with no uncertainty that XRPs are a currency, with the founders acting as the centralized banking authority.


I never doubted this. I do have some doubts about the technical aspects but my assumption is that these will be addressed in reasonable time with mathematical rigor. These issues are minor in comparison to the enormous pre-mine. At current valuation, the XRPs held in reserve by the authors are worth around $60,000,000 (sixty million USD).


It absolutely does. Just look at every fiat currency. The currency distribution is controlled by the central bank. You're saying that the fiat money reserve system's centralized control doesn't impact it's usefulness? Of course it does. The problem with having one or more individuals with control over such a large fraction of the currency is that they can effectively set a ceiling on the price. It was stated in the wiki that one hundred billion XRP should be enough for "thousands of years" worth of transactions and account reserves.

It has been repeated often that the gateways can set the transaction fees. This is true up to a certain point. At 10 "drops" per transaction, the most they can lower the fees is by 90%. Further reduction in fees would then only be possible with a change in the protocol to add more decimal places to XRP units. If Ripple takes off, those who own the bulk of the XRPs can simply hoard them to drive up the price. This would put pressure on gateways to lower the transaction fees due to artificial scarcity of XRP. But the most they could lower the price is by a factor of 10. Once the controllers of the XRP hoard drive the gateway transaction fee down to 1 drop (the lowest it can be) they now have complete control over the price. Hoard, to make it go up, and sell to make it go down.

There is grave concern about the centralized control over the XRPs. This concern is legitimate.


Unfortunately as you have pointed out, this is a difficult problem to solve. I do not believe it can be solved perfectly. Well, there is a dramatic solution:

Biometrics. Each individual is uniquely identified by a biometric marker (DNA or facial recognition?). Individuals would be eligible for a one time 1,000XRP distribution after providing biometrics at a physical redemption location. Their biometric information is hashed and stored in a database to prevent multiple distributions.

There's something else that OpenCoin can do:

Give away the entire undistributed balance of XRPs to one or more separate organizations not associated with the development of the Ripple software. Each organization can come up with its own rules for voting in its board members and distributing the XRPs. Here are some ideas:

- A "commerce board" with 13 council members that distributes a billion XRPs through votes.

- A "citizen board" that distributes a billion XRPs to individuals who display aged Bitcoin balances.

- A "public board" where anyone can join if they provide personal information (to prevent duplicates), and each person can nominate recipients for XRP grants and everyone can vote.

- Commercial entity like MtGox can transparently grant initial blocks of XRP to any of its account holders. Since people opening accounts on MtGox have to provide unique personal information the problem of duplicates and shills is avoided. This can be scaled to any traditional business that complies with AML.

- Commercial entities like MtGox can form an organization where they agree to share a database of hashed personal information on all their customers to reliably identify duplicates, this provides a fair path for giving out XRPs to people who already have opened accounts with companies that comply with "Know Your Customer" laws.

And so on and so forth. Each organization should be as public as possible. The greater the transparency, the more confidence will be inspired.

Taking some of distribution out of the hands of the founders and putting it into the hands of public people who have demonstrated wisdom, fairness, and intelligence would definitely help (although there's no perfect answer). How about Bitcoin foundation distributing some of the XRP? They could certainly keep some in reserve to fund their operations.

Now that we accept that XRPs are a form of currency and that there is a market for it, the most fair way I can think of to distribute them would be to divide the 100 billion hoard into one thousand equal portions, and give them to a thousand independent governing bodies so they can compete with each other, and let the market distribute them. This should keep the price from skyrocketing and also prevent any one person or group from controlling the market.

I think that to fund the development of the software it would be reasonable for the founders to hold some XRP in reserve. Five billion. The rest should be distributed in large blocks to independent third parties as soon as possible.

Politically separating the development of the software from the distribution of the XRPs seems the way to give Ripple the best chance of adoption.

Yes XRP is a currency and can be used as such.

Yes we will open source the ripple software. We understand that that is essential if the system is ever to gain adoption.

We are open to suggestions about how to distribute the coins. We are going to try to be as fair as possible but after the distribution will it really matter how we did it? A currency's distribution method doesn't really impact its usefulness.

The more I read, the more it seems like Ripple was designed from the ground up to enrich the authors. The shady way they bought the domain, code, and technical assets from the original author. The 100 billion XRP. The measured responses to the public regarding inquiries into the protocol.

But most importantly, the LACK of answers from JoelKatz when asked specific questions regarding the usage of XRP as currency.

Yeah but maybe we could at least get 100 or 1000 or whatever people who complain that the current system is not fair, give them each 1/100 or 1/1000 of all the Ripples in the new fairer one, and they can each distribute their portion in accordance with their proposed fairer method, so at least the fraction they get can be done fairly in accordance with their idea of what is fair.

There'd be lead-time, anyone who really thinks the current system is unfair could make sure to get onto the list of people who will be "fairly" doling out the new system's Ripples. Each of the proposed fairer systems would each have an equal fraction of the total to give out, though maybe they still might claim an equal share is not a fair share I suppose...

-MarkM-

Even so, the question of  how would probably swamp up any democratic efforts.

The source code will supposedly become available at some point.

Maybe by that time we should have a distribution list or something ready so we can immediately make a new RIpple network, immediately distributing all of its Ripples "equitably" ?

-MarkM-

The old wiki is still out there. IT has a link to the old mailing list too:

http://archive.ripple-project.org/


They're inside the ripple system. You can't use bitcoin for antispam within the ripple network because btc will always have an issuer in ripple and thus btc IOUs in ripple aren't fungible.

All boils down to one question: Why inventing "XRPs" while bitcoins would have been enough? What are the properties of XRP that Bitcoin doesn't have?

Let me say, though, that I've been a little to quick to jump to conclusions attributing malice. It may just be that OpenCoin sees it as a win-win situation: they get to bootstrap Ripple into being quickly and equitably, while profiting handsomely for their service to the cmmunity.

I just don't think this can work, despite the best of intentions. Power corrupts even the best of people, does it not?

Ryan Fugger, the original creator. http://news.ycombinator.com/item?id=5254737


Piggybacking on the name to buy the legitimacy that people had contributed in their comments about the old Ripple and earn the confidence of bitcoiners for this switcheroo'd version bastardized to suit their business needs rather than the open source community. Brilliantly executed, until these little play tokens started betraying the economic reality that scarcity + usefulness = value.  

Who is Fugger? I would like to learn more about the origins of Ripple and how the domain was transferred, can you provide references please?

Although the above problem is fatal for the legitimacy of OpenCoin's Ripple implementation and there's no need to go deeper, it gets even worse. The delusions about distributing the 80% of the market cap "fairly" - the part they AREN'T keeping for themselves -  are either the most naive central planning Soviet-era bullshit or - more likely - an opportunistic scheme for bribing bitcoiners and others who would otherwise object to what is, objectively viewed, an obvious pie-in-the-sky scam. I think the creators get this, but to them it's "just the way business works."

The XRP are refered to as an afterthought because they wanted to sneak in this little "worthless anti-spam token" to make sure they made the big bucks. Well they fucked up, the secret's out. The little "chits" took on a market value earlier than the schemers were expecting, so all plausible deniability is lost from here on.

The original Ripple will be a casualty, hopefully to rise again in proper form some day. It's really genius how they bought the idea from Fugger so they could use the name and website, so that anyone attacking this bastardized form of Ripple would be seen as attacking the original great idea that Ripple was. Imagine if someone had done this to Bitcoin? Messed with its structure so as to make it so there is no real choice but to default to giving all the coins to one group at the start. It'd have destroyed the project in its cradle. It would be unforgiveable.

+1 and can i get an amen?

http://www.reddit.com/r/Bitcoin/comments/19a1nj/introducing_ripple_a_detailed_look_at/

^ Exactly.

OpenCoin's scheme boils down to one simple, logically irrefutable fact: either XRP have significant market value, or they do not. They can't have it both ways. It cannot be both a disincentive to spam and at the same time worthless. They cannot retain 20% to pay off their business costs if they are worthless.

The only possibilities are that the company and its paid shills are ignorant of basic economics and logic, or they are running a sophisticated "soft-scam" (not illegal, but designed primarily to make them money off the original Ripple idea they bought from Fugger).

one simple question: does xrp have value or not? some say it's an anti-spam device, but others argue that such is not feasible unless the xrp has value, to which others again reply that xrp does have value, and on and on in circles...

either 1: if xrp is valueless, why even bother discussing this silly concept if there is no value
or 2: if xrp does have ANY value, then it's absolutely ludicrous to let even george washington or abraham lincoln themselves from being in charge of 'distributing' 80% (in a purely fair way, of course--as mark m will all too eagerly assure you), while retaining a whopping 20% for developers...absolutely insane...we'd hang a banker for that kind of talk!

I think we should also provide possible solutions and ask why they don't choose to do it.

For example, they could giveaway 99,9% of the XRPs. Why only 80%? And how can we prove that there are really doing that?

With "pre-mined" currencies such as the U.S. dollar, the Euro, and in general pretty much all fiat, gift cards, queues, IOUs and so on, the value seems in the long run to come from how reliably the issuers can be trusted to buy back their currency when its market value starts to decline.

UKB, CDN, GMC, GRF, MBC. NKL and UNS are all 'full pre-mine" coins, each of them except NKL being the standard 21 million coins, following the tradition established by Bitcoin. NKL has 20 times as many coins, with the idea that that should result in it being worth about 1/20 of a "normal" (only 21 million ever minted) coin.

I thought none of them would ever "Catch up" to Bitcoin, let alone "surpass" it.

http://galaxies.mygamesonline.org/digitalisassets.html

It will be interesting to see how things go, both with those coins and with Ripple.

Maybe Ripple will turn out to be a better platform for them to run on than the current Open Transactions implementation, at least until/unless they do ever attain sufficient volume of transactions to be able to attract merged-mining miners. (Enough transaction-fees to attract enough miners to secure them as blockchains again which is what they were originally before the disinclination of miners to merged-mine additional chains led to the realisation that blockchains are just too hard to secure without massive transaction volume.)

-MarkM-

Can anyone refute or otherwise provide counter-arguments to the points I listed in bold?

I don't want this to turn into a Freicoin discussion. Please delete your thread and re-post it as a new topic.


Yeah, I suppose that's technically accurate but I believe it has become common to use the term "premine" to refer to any cryptocurrency where the creators of the system extract some or all of the wealth before the system is published.