Ripple or Bitcoin - page 47. | Bitcointalksearch.org

timeofmind

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Quote from: timeofmind on May 27, 2013, 02:07:08 PM

Quote from: mmeijeri on May 27, 2013, 01:16:37 PM

Note that gateways and exchanges aren't the same thing, though a gateway could easily choose to be an exchange and vice versa. Ripple isn't really a network to connect either exchanges or gateways. It serves as a distributed exchange all by itself, and the gateways serve to connect the other nodes in the network, the network doesn't serve to connect the gateways.

Of course a gateway is the same as an exchange... What on earth would you use a gateway for other than to exchange your money for another currency? OK, sure, you just want to send dollars to someone, so you go to "gateway"... the gateway exchanges the dollars to some electronic currency... the recipient collects in dollars at some gateway close to them.... the money is being "exchanged". Every gateway is definitely an "exchange".

It should be noted, that presently, in order to send money accross the globe to your friend, you simply go to an exchange, change your money into bitcoin, and then send it to your friend who exchanges the money back to his currency of choice. This is done completely using exchanges. In Ripple, you could argue that this money is sent by IOU. But still... come one... this IOU thing is still basically what currency is in the first place... ultimately, in ripple you have two new currencies introduced, ripples, and IOUs...

timeofmind

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misterbigg envisions ripple as a network that links "gateways" to one another, and links individuals, only directly to gateways. He states:

Quote from: misterbigg

I agree. I never thought that the peer to peer model of self-issued credit would be workable (although I could be wrong).

I call people who cling to this idea "community credit fetishists." It's a nice idea in theory but it seems to have practical problems.

Then we have Mitzplik, who envisions the exact opposite topology for Ripple. He states:

Quote from: Mitzplik

In ripple you dont link exchanges, you link people who is linked to an exchange (gateway). But the gateways cant be linked to one another because the risk would be huge

If both the assumption that linking people-to-people would be impractical, as per misterbigg, and the assumption that linking gateway-to-gateway would be too risky, as per Mitzplik, then who links to whom? The entire system would be broken! So which is it?

timeofmind

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Quote from: mmeijeri on May 27, 2013, 01:16:37 PM

Note that gateways and exchanges aren't the same thing, though a gateway could easily choose to be an exchange and vice versa. Ripple isn't really a network to connect either exchanges or gateways. It serves as a distributed exchange all by itself, and the gateways serve to connect the other nodes in the network, the network doesn't serve to connect the gateways.

Of course a gateway is the same as an exchange... What on earth would you use a gateway for other than to exchange your money for another currency? OK, sure, you just want to send dollars to someone, so you go to "gateway"... the gateway exchanges the dollars to some electronic currency... the recipient collects in dollars at some gateway close to them.... the money is being "exchanged". Every gateway is definitely an "exchange".

Quote from: Mitzplik

I disagree. In ripple you dont link exchanges, you link people who is linked to an exchange (gateway). But the gateways cant be linked to one another because the risk would be huge, and this gateway would be untrustworthy, and more vulnerable (as far as i can see).

My argument for ripple being delegated as a network to link exchanges, is because there already seems to be a consensus here that people will not trust one another enough to link to one another. So which is it? Will this be a giant network of people linked to one another through IOU's? Or will it be a network of "gateways" linked to one another through IOU's and people only linking directly to individual "gateways"? Which one is the expected topology here? You have to have one or the other, otherwise ripple will be worthless, as there will be not enough IOU links to bring the network together into one.

Mitzplik

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Quote from: timeofmind on May 27, 2013, 12:57:54 PM

So ultimately, all ripple is good for is a method to link the exchanges with one another?

There seems to be a consensus here that people will only be linked to gateways through IOUs.

There seems to be a consensus that the only gateways will be managed by reputable organizations, basically operating as exchanges.

So ultimately, if all the existing exchanges now, were to link with one another though an agreed upon api in order to allow all the members on every exchange to be able to trade with one another... we would have a ripple alternative?

Am I missing something here?

I disagree. In ripple you dont link exchanges, you link people who is linked to an exchange (gateway). But the gateways cant be linked to one another because the risk would be huge, and this gateway would be untrustworthy, and more vulnerable (as far as i can see).
I would think gateways are like banks today, and ripple would be a client in which you could access different banks, trade, see statements, send money (for people in the same gateway/bank).

mmeijeri

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Martijn Meijering

Quote from: timeofmind on May 27, 2013, 01:10:11 PM

The thing is, this ripple trust network, relies on trust between the central players. So these gateways/exchanges will have to trust one another, right?

There's no reason why gateways must trust each other. In order to function they need to be trusted by others, they don't have to trust anyone themselves. That said, it's possible gateways will accept IOUs issued by some of their larger and more reliable competitors, possibly at less than face value.

Quote

Am I accurate in describing ripple as basically a network to connect all the major exchanges?

Note that gateways and exchanges aren't the same thing, though a gateway could easily choose to be an exchange and vice versa. Ripple isn't really a network to connect either exchanges or gateways. It serves as a distributed exchange all by itself, and the gateways serve to connect the other nodes in the network, the network doesn't serve to connect the gateways.

SamS

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Quote from: timeofmind on May 27, 2013, 12:57:54 PM

So ultimately, all ripple is good for is a method to link the exchanges with one another?

There seems to be a consensus here that people will only be linked to gateways through IOUs.

There seems to be a consensus that the only gateways will be managed by reputable organizations, basically operating as exchanges.

So ultimately, if all the existing exchanges now, were to link with one another though an agreed upon api in order to allow all the members on every exchange to be able to trade with one another... we would have a ripple alternative?

Am I missing something here?

Beats me. I'm still trying to understand how Ripple is different than the current system to be honest -- other than the claim that it is one protocol where many exist now.

timeofmind

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The thing is, this ripple trust network, relies on trust between the central players. So these gateways/exchanges will have to trust one another, right? Are bitcoin exchanges that trust-worthy now? Do you think Mt. Gox would be willing to trust other newer exchanges? and to accept bid/ask calls from those exchanges, as well as fulfillment from those exchanges? Why would an established player expose itself to this kind of risk?

Am I accurate in describing ripple as basically a network to connect all the major exchanges? What motivation is there for these exchanges to want to connect with one another?

timeofmind

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So ultimately, all ripple is good for is a method to link the exchanges with one another?

There seems to be a consensus here that people will only be linked to gateways through IOUs.

There seems to be a consensus that the only gateways will be managed by reputable organizations, basically operating as exchanges.

So ultimately, if all the existing exchanges now, were to link with one another though an agreed upon api in order to allow all the members on every exchange to be able to trade with one another... we would have a ripple alternative?

Am I missing something here?

SamS

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Quote from: misterbigg on May 27, 2013, 11:45:08 AM

Quote from: Mitzplik on May 27, 2013, 10:46:45 AM

I dont understand why users would trust each others in the ripple network. The confusion is all about that....So, the question remains: why the hell would someone grant trust to a common user? To avoid paynig 0.00001 XRP or save some IOUs tranfer fees?

I agree. I never thought that the peer to peer model of self-issued credit would be workable (although I could be wrong).

I call people who cling to this idea "community credit fetishists." It's a nice idea in theory but it seems to have practical problems.

I quite agree with that point. So, does the whole crypto-currency idea -- forget Bitcoin and Ripple for a moment -- ultimately resolve back to a decentralized system where large players occupy the Crypto/Fiat interface because there are a) controls on them and b) they have an incentive to provide the service as they "make bank" providing FX services? If so, then other than the transaction fee issue, how is a crypto-currency really all that useful as a payment processing solution? Forget the anonymity idea as any large scale Crypto/Fiat node is going to be regulated...

misterbigg

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Quote from: Mitzplik on May 27, 2013, 10:46:45 AM

I dont understand why users would trust each others in the ripple network. The confusion is all about that....So, the question remains: why the hell would someone grant trust to a common user? To avoid paynig 0.00001 XRP or save some IOUs tranfer fees?

I agree. I never thought that the peer to peer model of self-issued credit would be workable (although I could be wrong).

I call people who cling to this idea "community credit fetishists." It's a nice idea in theory but it seems to have practical problems.

mmeijeri

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Martijn Meijering

Quote from: Mitzplik on May 27, 2013, 10:46:45 AM

If nobody trusts nobody except for the gateways, Ripple would be a centraliazed financial manager of funds in different gateways.

Not centralised at all, much more distributed than Mt Gox, though less distributed than Bitcoin. Not at all a problem if you either want to buy or sell BTC with fiat. And if you use XRP as a currency, then it is just as distributed as Bitcoin.

Quote

But if i trust any user, even if he is my dad, then I am at risk of belonging to an endless truted pathways network, just by my dad setting a trustline with a friend of him.

What risk are you afraid of? The only counterparty risk you would be exposed to would be with your dad.

Quote

So, the question remains: why the hell would someone grant trust to a common user? To avoid paynig 0.00001 XRP or save some IOUs tranfer fees?

For reciprocal access to each other's network, in order to make discreet payments.

SamS

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Quote from: runam0k on May 27, 2013, 09:01:44 AM

Another ripple thread in the wrong forum?

+1

Mitzplik

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I dont understand why users would trust each others in the ripple network. The confusion is all about that.

Today, people trust in banks to issue IOUs (statements) and sites like mtgox (gateways).

If nobody trusts nobody except for the gateways, Ripple would be a centraliazed financial manager of funds in different gateways. In just one client i would be able to see and trade my funds (including BTC) in Bitstamp, Mtgox (if it becomes a gateway), gateway A, B etc. And the XRP will be useful depending on its liquidity and steadyness.

But if i trust any user, even if he is my dad, then I am at risk of belonging to an endless truted pathways network, just by my dad setting a trustline with a friend of him.

So, the question remains: why the hell would someone grant trust to a common user? To avoid paynig 0.00001 XRP or save some IOUs tranfer fees?

oakpacific

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Quote from: misterbigg on May 27, 2013, 10:37:09 AM

Quote from: oakpacific on May 27, 2013, 10:23:49 AM

Yeah, tell me more why should I stop using IOUs issued by at least somehow legally regulated corporations, and join the happy lawless Ripple family.

You shouldn't! Ripple users need to use the same level of care and discrimination choosing a gateway as they do in choosing an exchange (I think the wiki makes the clear, at least...I hope it does!)

There's significant overlap between gateways and exchanges. A Bitcoin exchange makes the perfect candidate for a gateway since they already perform the same functions. Ripple uses the term "gateway" as opposed to exchange because a gateway does more - it's IOUs can be traded in a decentralized fashion. Note that I'm not saying that the gateway itself is decentralized, they still represent a server where activity takes place (i.e. web interface to your Bitstamp account). But the IOUs are (there's still counterparty risk though).

Anonymous gateways are a bad thing! You want to make sure that you use a gateway which is a registered business, preferably in your jurisdiction. They should also have a good reputation.

tl;dr No need to use Ripple, just stay with banks/exchanges.

Coinseeker

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Quote from: oakpacific on May 27, 2013, 10:23:49 AM

Yeah, tell me more why should I stop using IOUs issued by at least somehow legally regulated corporations, and join the happy lawless Ripple family.

Fortunately, misterbigg seems to be on the case. He frankly has the patience (I do not) and the knowledge to field such "loaded" questions. I'll leave you gentlemen to it.

misterbigg

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Quote from: oakpacific on May 27, 2013, 10:23:49 AM

Yeah, tell me more why should I stop using IOUs issued by at least somehow legally regulated corporations, and join the happy lawless Ripple family.

You shouldn't! Ripple users need to use the same level of care and discrimination choosing a gateway as they do in choosing an exchange (I think the wiki makes the clear, at least...I hope it does!)

There's significant overlap between gateways and exchanges. A Bitcoin exchange makes the perfect candidate for a gateway since they already perform the same functions. Ripple uses the term "gateway" as opposed to exchange because a gateway does more - it's IOUs can be traded in a decentralized fashion. Note that I'm not saying that the gateway itself is decentralized, they still represent a server where activity takes place (i.e. web interface to your Bitstamp account). But the IOUs are (there's still counterparty risk though).

Anonymous gateways are a bad thing! You want to make sure that you use a gateway which is a registered business, preferably in your jurisdiction. They should also have a good reputation.

oakpacific

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Quote from: Coinseeker on May 27, 2013, 10:15:46 AM

Quote from: misterbigg on May 27, 2013, 10:08:19 AM

Quote from: Coinseeker on May 27, 2013, 09:49:39 AM

I'm betting on Ripple

I'm betting on both! They are two completely different systems with different use-cases. The cryptocurrency pie is incredibly large and Ripple does not detract from Bitcoin nor vice versa. In fact, Ripple makes the pie larger!

Even though I can't stand the alt-coins, it is interesting that Ripple will also benefit the alt-coins since it will make them more liquid. You'll be able to spend your litecoins at any merchant that currently accepts bitcoin, when bitcoin "bridges" appear on the Ripple network.

What I keep saying, which unfortunately gets drowned out in the chorus of "scam, bla bla" is that Bitcoin users already have to extend trust! Except for the very few who don't use an exchange... See:

Excellent graphic and I heed your point. I do believe it's possible, and have said so on more than one occasion, that Ripple is good for Bitcoin. That the Bitcoin owners will look at their wallets value soon and say, "Thank [enter diety] for Ripple."

I simply have personal reasons why in the end, my speculation is that only one will survive. It doesn't make it true, it doesn't make it the goal of OpenCoin or Ripple, it just makes it my opinion.

Yeah, tell me more why should I stop using IOUs issued by at least somehow legally regulated corporations, and join the happy lawless Ripple family.

cypherdoc

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Quote from: misterbigg on May 27, 2013, 10:08:19 AM

Quote from: Coinseeker on May 27, 2013, 09:49:39 AM

I'm betting on Ripple

I'm betting on both! They are two completely different systems with different use-cases. The cryptocurrency pie is incredibly large and Ripple does not detract from Bitcoin nor vice versa. In fact, Ripple makes the pie larger!

Even though I can't stand the alt-coins, it is interesting that Ripple will also benefit the alt-coins since it will make them more liquid. You'll be able to spend your litecoins at any merchant that currently accepts bitcoin, when bitcoin "bridges" appear on the Ripple network.

What I keep saying, which unfortunately gets drowned out in the chorus of "scam, bla bla" is that Bitcoin users already have to extend trust! Except for the very few who don't use an exchange... See:

and what i keep saying and you keep ignoring is that if mtgox was shut down tomorrow Bitcoin would still function just fine b/c of other exchanges, localbitcoins, and p2p. the POW will continue to incentivize miners to secure the network while at the same time not being a centralized point of weakness.

Ripple, otoh, will depend on centralized gateways (banks and other financial institutions) that, if you're lucky, will play ball with Ripple and submit to Opencoin instead of their chief benefactor the Fed. and when they decide to change their minds, Ripple will be hosed.

in Ripple, there is no incentive for individuals to validate, unlike in Bitcoin they get paid as miners. this is a significant difference.

Coinseeker

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Quote from: misterbigg on May 27, 2013, 10:08:19 AM

Quote from: Coinseeker on May 27, 2013, 09:49:39 AM

I'm betting on Ripple

I'm betting on both! They are two completely different systems with different use-cases. The cryptocurrency pie is incredibly large and Ripple does not detract from Bitcoin nor vice versa. In fact, Ripple makes the pie larger!

Even though I can't stand the alt-coins, it is interesting that Ripple will also benefit the alt-coins since it will make them more liquid. You'll be able to spend your litecoins at any merchant that currently accepts bitcoin, when bitcoin "bridges" appear on the Ripple network.

What I keep saying, which unfortunately gets drowned out in the chorus of "scam, bla bla" is that Bitcoin users already have to extend trust! Except for the very few who don't use an exchange... See:

Excellent graphic and I heed your point. I do believe it's possible, and have said so on more than one occasion, that Ripple is good for Bitcoin. That the Bitcoin owners will look at their wallets value soon and say, "Thank [enter diety] for Ripple."

I simply have personal reasons why in the end, my speculation is that only one will survive. It doesn't make it true, it doesn't make it the goal of OpenCoin or Ripple, it just makes it my opinion.

misterbigg

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Quote from: Coinseeker on May 27, 2013, 09:49:39 AM

I'm betting on Ripple

I'm betting on both! They are two completely different systems with different use-cases. The cryptocurrency pie is incredibly large and Ripple does not detract from Bitcoin nor vice versa. In fact, Ripple makes the pie larger!

Even though I can't stand the alt-coins, it is interesting that Ripple will also benefit the alt-coins since it will make them more liquid. You'll be able to spend your litecoins at any merchant that currently accepts bitcoin, when bitcoin "bridges" appear on the Ripple network.

What I keep saying, which unfortunately gets drowned out in the chorus of "scam, bla bla" is that Bitcoin users already have to extend trust! Except for the very few who don't use an exchange... See:

Topic: Ripple or Bitcoin - page 47. (Read 34131 times)