How are XRP's accounted for? How are they prevented from double spends?
cannot give you a qualified answer, but maybe this: https://ripple.com/wiki/Consensus is involved.
Topic: Ripple and Trust - page 3. (Read 4030 times)
cannot give you a qualified answer, but maybe this: https://ripple.com/wiki/Consensus is involved.
Is it possible for one of these gateways to run off with a bunch of currencies? Or to get hacked?
of course: BitStamp is currently holding BTC 1 of mine (blockchain real BTC). They could just run with it.
How are XRP's accounted for? How are they prevented from double spends?
Thank you OP for the explanation, because I was pretty confused until now.
So the level of trust required to use Ripple is the same as I need to use, say Mt Gox. Is that correct?
Is it possible for one of these gateways to run off with a bunch of currencies? Or to get hacked?
So the level of trust required to use Ripple is the same as I need to use, say Mt Gox. Is that correct?
Is it possible for one of these gateways to run off with a bunch of currencies? Or to get hacked?
> Are there XRP IOUs at all?
nope
> Why do you think, say USD IOU issued by gateway A will always be in par with USD IOU issued by gateway B?
They might not be. there can easily be an exchange rate between them in the distributed exchange.
>I think if he gives you a 10 EUR bill in meatspace, you use the ripple system to send him 10 ripple-Euros. From his and your point of view, everything is settled.
yep
>So how does the system protect against credit default swap shenanigans?
What are you exactly worried about? I have a feeling it isn't credit default swaps since that is a complicated financial instrument that doesn't really apply to ripple.
nope
> Why do you think, say USD IOU issued by gateway A will always be in par with USD IOU issued by gateway B?
They might not be. there can easily be an exchange rate between them in the distributed exchange.
>I think if he gives you a 10 EUR bill in meatspace, you use the ripple system to send him 10 ripple-Euros. From his and your point of view, everything is settled.
yep
>So how does the system protect against credit default swap shenanigans?
What are you exactly worried about? I have a feeling it isn't credit default swaps since that is a complicated financial instrument that doesn't really apply to ripple.
Would it be possible for him to give me a 10 EUR bill in meatspace and somehow reflect this "settlement" into the ripple system?
I think if he gives you a 10 EUR bill in meatspace, you use the ripple system to send him 10 ripple-Euros. From his and your point of view, everything is settled.Duh! Thanks for the kick. Yes of course, it's that simple.
I think I really need sleep now.
A gateway is some business that has agreed to issue and redeem ripple IOUs. You take your money to a gateway and the gateway gives you a ripple IOU. You can send this IOU to other people, trade it for XRP or BTC or whatever. You can take your IOU back to the gateway and the gateway will send you money. This is essentially what paypal or dwolla or banks do now.
I don't think this is the same what paypal or dwolla or banks do. Why do you think, say USD IOU issued by gateway A will always be in par with USD IOU issued by gateway B? Would it be possible for him to give me a 10 EUR bill in meatspace and somehow reflect this "settlement" into the ripple system?
I think if he gives you a 10 EUR bill in meatspace, you use the ripple system to send him 10 ripple-Euros. From his and your point of view, everything is settled. tldr: Ripple doesn't require anymore trust than bitcoin
I see a lot of people misunderstanding the way Ripple works so I'm going to attempt to clarify.
There are two pieces to the ripple system, XRP and IOUs.
XRP works essentially like bitcoin. No counter party risk. You can send xrp to anyone with a ripple account. No trust etc.
The IOUs are more complicated. Every IOU has an Issuer and a Currency. The Issuer is simply a ripple account. You can only hold IOUs from issuers you have agreed to trust.
A gateway is some business that has agreed to issue and redeem ripple IOUs. You take your money to a gateway and the gateway gives you a ripple IOU. You can send this IOU to other people, trade it for XRP or BTC or whatever. You can take your IOU back to the gateway and the gateway will send you money. This is essentially what paypal or dwolla or banks do now.
This is the same as sending USD to mtgox. You are trusting mtgox to the amount you have sent in. You can send that USD to another person that has chosen to trust mtgox in the form of a mtgox code.
So you can see that Ripple doesn't require more trust or counter party risk then you are already used to.
The powerful thing is that Ripple links all these gateways and that there is an exchange in Ripple where you can swap these various IOUs so you can trade between all kinds of currencies and issuers.
We hope to explain things better on ripple.com soon.
I see a lot of people misunderstanding the way Ripple works so I'm going to attempt to clarify.
There are two pieces to the ripple system, XRP and IOUs.
XRP works essentially like bitcoin. No counter party risk. You can send xrp to anyone with a ripple account. No trust etc.
The IOUs are more complicated. Every IOU has an Issuer and a Currency. The Issuer is simply a ripple account. You can only hold IOUs from issuers you have agreed to trust.
A gateway is some business that has agreed to issue and redeem ripple IOUs. You take your money to a gateway and the gateway gives you a ripple IOU. You can send this IOU to other people, trade it for XRP or BTC or whatever. You can take your IOU back to the gateway and the gateway will send you money. This is essentially what paypal or dwolla or banks do now.
This is the same as sending USD to mtgox. You are trusting mtgox to the amount you have sent in. You can send that USD to another person that has chosen to trust mtgox in the form of a mtgox code.
So you can see that Ripple doesn't require more trust or counter party risk then you are already used to.
The powerful thing is that Ripple links all these gateways and that there is an exchange in Ripple where you can swap these various IOUs so you can trade between all kinds of currencies and issuers.
We hope to explain things better on ripple.com soon.
So how does the system protect against credit default swap shenanigans? I never understood that with the original Ripple system, and I don't understand it with the current one.
In the lead up to the 2008 downturn, significant sums had to be spent to change regulations to enable the swaps and create loopholes to consolidate banking power. But Ripple is devoid of those protections by default, so it seems the system would actually make the mortgage crises default chain several orders of magnitude cheaper to implement.
thanks for the explanations, I think this helped a bit (still need to sleep to let everything sink in).
A key for me is that XRP is not like the other currencies. They are a real "commodity", like bitcoin.
Are there XRP IOUs at all?
One question the answer to which might shed more light into my mind: Say by brother and I both use ripple and after a while we determine he owes me 10 EUR (or he owes "the world" 10 EUR and "the world" owes me 10 EUR). Would it be possible for him to give me a 10 EUR bill in meatspace and somehow reflect this "settlement" into the ripple system?
A key for me is that XRP is not like the other currencies. They are a real "commodity", like bitcoin.
Are there XRP IOUs at all?
One question the answer to which might shed more light into my mind: Say by brother and I both use ripple and after a while we determine he owes me 10 EUR (or he owes "the world" 10 EUR and "the world" owes me 10 EUR). Would it be possible for him to give me a 10 EUR bill in meatspace and somehow reflect this "settlement" into the ripple system?
tldr: Ripple doesn't require anymore trust than bitcoin
I see a lot of people misunderstanding the way Ripple works so I'm going to attempt to clarify.
There are two pieces to the ripple system, XRP and IOUs.
XRP works essentially like bitcoin. No counter party risk. You can send xrp to anyone with a ripple account. No trust etc.
The IOUs are more complicated. Every IOU has an Issuer and a Currency. The Issuer is simply a ripple account. You can only hold IOUs from issuers you have agreed to trust.
A gateway is some business that has agreed to issue and redeem ripple IOUs. You take your money to a gateway and the gateway gives you a ripple IOU. You can send this IOU to other people, trade it for XRP or BTC or whatever. You can take your IOU back to the gateway and the gateway will send you money. This is essentially what paypal or dwolla or banks do now.
This is the same as sending USD to mtgox. You are trusting mtgox to the amount you have sent in. You can send that USD to another person that has chosen to trust mtgox in the form of a mtgox code.
So you can see that Ripple doesn't require more trust or counter party risk then you are already used to.
The powerful thing is that Ripple links all these gateways and that there is an exchange in Ripple where you can swap these various IOUs so you can trade between all kinds of currencies and issuers.
We hope to explain things better on ripple.com soon.
I see a lot of people misunderstanding the way Ripple works so I'm going to attempt to clarify.
There are two pieces to the ripple system, XRP and IOUs.
XRP works essentially like bitcoin. No counter party risk. You can send xrp to anyone with a ripple account. No trust etc.
The IOUs are more complicated. Every IOU has an Issuer and a Currency. The Issuer is simply a ripple account. You can only hold IOUs from issuers you have agreed to trust.
A gateway is some business that has agreed to issue and redeem ripple IOUs. You take your money to a gateway and the gateway gives you a ripple IOU. You can send this IOU to other people, trade it for XRP or BTC or whatever. You can take your IOU back to the gateway and the gateway will send you money. This is essentially what paypal or dwolla or banks do now.
This is the same as sending USD to mtgox. You are trusting mtgox to the amount you have sent in. You can send that USD to another person that has chosen to trust mtgox in the form of a mtgox code.
So you can see that Ripple doesn't require more trust or counter party risk then you are already used to.
The powerful thing is that Ripple links all these gateways and that there is an exchange in Ripple where you can swap these various IOUs so you can trade between all kinds of currencies and issuers.
We hope to explain things better on ripple.com soon.
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