Topic: Ripple explained for Bitcoiners! - page 5. (Read 17724 times)

Is there a way to "cold store" XRP?  As we all know one of the major issues with Bitcoin, especially early on, was accounts being compromised and BTC's being stolen.  Paper wallets and such was a huge leap forward in terms of security, is there a similar option with Ripple?  At the very least, they should enable two-factor authentication (Google Authenticator or SMS Text are my preference).

Now let's say Bitstamp gets hacked and those 2907 BTC are wiped out. People start withdrawing BTCs from Bitstamp. How does that get resolved? In order or does Bitstamp choose which IOUs to deal with first?

The Ripple wallet client is written in Javascript, and it runs entirely on your own machine. If you want to, you could clone the Github repository (https://github.com/rippleFoundation/ripple-client) onto your local machine and open it from there. Ripple.com is just where you get the client app right now, but Stephan (another OpenCoin genius) is building a really cool distributed system for securely getting a signed instance of the wallet. You can read his research here:

Secure Bookmarklets

His research and development of secure bookmarklets is public and open, and can be directly used by some of the Bitcoin javascript wallets (like Blockchain.info).


Your balances are kept in the ledger, which is a shared database very similar to the Bitcoin block chain. Each validator maintains a copy of the current ledger. Most validators can also provide historical data, like previous ledgers. The ledgers form a hash chain, and all of the information and transactions can be verified with cryptographic signatures.

After the source code is published and all of the bugs, features, and kinks worked out, the closure of OpenCoin will not affect the Ripple network or its account balances. Ripple will be decentralized in the same fashion as Bitcoin.

It is worth repeating, however, that when you extend trust to a gateway there is always a non-zero risk of default.

So, if I have to log into ripple's wallet site.. who actually holds my ripples, and who holds the ledger listing who owns what? In short, what effect would there be on the Ripple network if OpenCoin and the ripple website disappeared?

I just wanted to be clear if I was talking with a representative of the Company or just an investor.  Thanks for sharing your views on the topic.

I wouldn't say that it is closed, because you can still create a wallet and open your existing wallet but I think they might have not made it as easy as possible. I opened a bug report about this a little while ago:

https://github.com/rippleFoundation/ripple-client/issues/489


They postponed the announcement of the next round of giveaways, I think to give them some more time to polish up the client. In my opinion the client is a very rough ride and not ready for the masses, in fact I've opened up several GitHub issues about it.

If you look hard enough you will be able to create a wallet, PM me with your address and I will fund your account with XRP so you can use it. But be warned...this is still beta software!

I finally decided to go and try it out, is it seriously still in a closed beta testing phase? 

No. I don't work for OpenCoin, they don't pay me, and I haven't received any compensation for my views (nor would I want to, for then I could not claim objectivity).

I do, however, hold a substantial quantity of both XRPs and Bitcoins. I'm equally bullish on both.

Yes. It is decentralized because no one can stop you from sending or receiving things in the Ripple network, nor can anyone seize the items in your account. You don't have to trust OpenCoin to send balances from one account to another. There is counterparty risk when depositing funds in a gateway but that is unavoidable.


Yes. You can see a summary of the total issued gateway balance for each currency here:

http://ripplecharts.com




When part of your balance is represented by a gateway's IOUs (for example, you have a balance of Bitstamp bitcoins), at any time you should be able to send the gateway part or all of that balance and receive the actual thing that it represents (bitcoins in this example).

The process of redeeming the balance is called "settlement" or redemption, and the legal framework that enforces this is called the "settlement agreement."

When you deposit money at MtGox and obtain a USD balance, there is an implicit agreement that you can withdraw those funds back into your checking account.

In Ripple this works the same way, when you have a balance there is the understanding that you can redeem the balance at the corresponding gateway and receive the funds. If the gateway does not fulfill this obligation then they are in default.

You need to make sure that the gateway is reputable, in exactly the same way that you would have to make sure that a Bitcoin exchange is reputable.

misterbigg,

Are you affiliated with OpenCoin or any of their affiliates/subsidiaries?

+1

Thanks, I added that to the "Facts" section.


Like I said, XRPs are a risky investment! But you do not have to invest in XRP to get the other benefits of the Ripple system.

I'm leaving this up since it is not a repetition up to now but anyone who repeats that "XRPs will lose value" or brings up the pre-mine will have their post deleted.

You're welcome! That's what this thread is for. Honest facts without the zealous rhetoric.


No. XRP is a cryptocurrency. No one can take away your XRP, no one can create new XRP, and no one can prevent you from sending or receiving XRP. (Note, this all assumes that the source code is published).

You won't have to trust OpenCoin to be able to use XRP (after the source code is released). However, for as long as OpenCoin still holds almost all of the XRP they will have a lot of control over the price. This may make XRP unsuitable as an investment. But this won't interfere with your ability to use Ripple for its other useful features.


No. USDs in Ripple are IOUs. A gateway promises to pay you actual USD in the future when you redeem the IOU. But XRP are built-in to the system. Gateways do not issue IOUs. You will always be able to send and receive XRPs, and no one can take away your XRPs (once the source code is released).

People please keep in mind that the creator of XRP pre-mined 100% of the coins. And Ripple will be an open sourced system. Your XRP are very likely to lose value in the future.

Is a gateways IOUs issued or outstanding public info?

Can you explain how an IOU in the system defaults?

I'm having trouble understanding how this is decentralized? Could you please elaborate on that?

Thanks for honest answer. In other words, XRP is FIAT cryptocurrency backed by OpenCoin. It can be trusted as long as you trust OpenCoin.

It seems that "decentralization" in ripple is the same as decentralization in USD. You may freely use both USD and XRP in decentralized trades until issuing authority sees that their interests are affected by your business. Am I correct?

I prefer unmoderated threads but the problem is that a small handful of bad actors and one scammer have taken it upon themselves to flood otherwise useful threads with repetitive noise. This thread is my attempt to explain Ripple to people who actually want to understand it. For the Ripple-bashers there are plenty of other threads for that.

Ripple is a complicated piece of software. It is nothing like Bitcoin, which is simple and can be explained a 9 page research paper. There are a lot of misconceptions about it. I would like to clear up those misconceptions.

For the most part I will not be deleting many posts. However, anyone who comes here and repeats things that have already been stated (see my Facts post) is going to have their post removed. Sorry about that!

As long as OpenCoin holds a lot of XRP, they can influence the price. They can't create new XRPs though, without approval of all the validators participating in the consensus process. Realistically, they can only manipulate the price until their XRP runs out. Then the price will be dictated by the market.

Is price manipulation so bad? They could hold a lot of XRP back and make it go up in value. This could make transactions and new accounts more expensive temporarily, but the validators will just vote to reduce the reserves and fees. So OpenCoin hoarding XRP does not affect users of the system very much.

They could give away tons of XRP, which is their stated plan. This might not affect the price much at all, since the reserves are "sequestered" in the account and cannot be spent except on fees.

They could sell XRP into the market. If they sell too much, the price could crash. Notice that OpenCoin is not recommending XRP as an investment! If you plan on buying a lot of XRP, you are exposed to what we call "flood risk:" that OpenCoin will dump large quantities of XRP and make the price drop. Will they do this? I don't know. It will certainly be against their best interests. Think of it this way: if you held 50,000 bitcoins would you put them on MtGox and sell them at market?

Another possibility is that OpenCoin will manage the price of XRP so that it grows slowly and in a sustainable way to prevent bubbles like what we saw with Bitcoin going to $266 then crashing to $50. People complain about Bitcoin's price stability all the time. With XRP's temporary central management, there is a solution. I don't know what they will do though.

Let's be clear:

Investing in XRP is risky as fuck!

Moderated threads about something like Ripple - pro or con - are pointless.

Now go ahead and delete this.