Topic: Ripple or Bitcoin - page 55. (Read 34110 times)

It depends what you mean by "create Ripple". It would have been possible to create a system that does some of what Ripple does without a native currency. But it would be very different from the Ripple system we actually created.

First, we didn't reserve the right to print money. 100 billion XRP is all there will ever be, unless in some distant future there's a consensus of validators to change it.

Second, it's hard enough to design a system that's immune to rational criticism. Trying to design one that's immune to irrational criticism is a fool's errand. The native currency allows us to have something to give away to drive adoption. The native currency allows the development of the software to be funded. And I've yet to hear of any plausible way it could harm the use of Ripple as a payment system.

And in truth, the rhetoric is actually more believable with OpenCoin having a profit motive. For example, if we had no profit motive to do so, why should people be confident we're actually going to decentralize the system? Why should they be confident that we'll work as hard as we can to drive adoption so they can feel comfortable putting their own resources into Ripple? Because we have a big stake, there's no reason not to believe us when we say we'll work to make that stake worth more.

There's one critical difference: Satoshi held no more coins than he mined himself, while Opencoin holds all coins in existence. Please follow this train of thought and, tell me where I'm wrong:

- Ripple becomes highly successful enabling huge internet trade, people love it and Opencoin valuation grows into the billions, has it's own NASDAQ IPO etc.
- Opencoin still owns the majority of coins in existence and plans to sell them for decades to come
- The US government/congress is concerned about the anonymity features of Ripple and asks Opencoin to backdoor it to make tracking easy, or face repercussion
- Since you can't make money as a US company by ignoring the law, the only way to realize your investment and sell the coins on the long run is to comply with the US demands; your board of directors will cave and if not the stockholders will force them
- There is an outcry in the community, people fork your public source and vouch not to upgrade to your trojanized version; a forked chain emerges that doesn't do tracking, in parallel with the official chain
- Since you are either the owner or the grandfather of all coins in existence, the forked chain has no idea what are the coins you still hold and what coins you have given away/sold in the past, thus the forkers can't purge your control form their chain
- You will therefore end-up holding the majority of coins in the alternate chain too and there's no way to prevent it, except the trivial case where you still keep the bulk of the funds in an easy identifiable private key
- You institute a free for all in the alternate chain (it doesn't cost you anything) and crash it's value, therefore killing it, or at least vaporizing 99% of the duplicated wealth there, so that it makes no sense for anyone to switch to it


You should not confuse ripple accounts holding the money with actual servers running the consensus algorithm. So you don't have to trust anyone to use XRP, except maybe the server you connect to if you have a thin client. When running a verifier node (for example a ripple gateway or large merchant), you need to carefully chose your peers so as to have a global and uncorrupted view of the network. Verifiers essentially form a darknet; you can freely connect as in a "whitenet", but you can't participate in consensus.

It's an intriguing idea that needs to be formally explored, but I can't fault it for the time being. I cannot but wonder if convergence is possible after a network split; in Bitcoin the most powerfull subnetwork will force it's world view, while here all subnets will have 100% consensus and it's not clear how the local views can be reconciled to form a global view.

Joel, since you mentioned the incentive question regarding XRP, can you help me out please?  I just can't seem to get an answer to this question:

Would it have been possible to create Ripple without XRP?  Could you have just tracked the liabilities in their native currencies?

If the answer is "yes, it would have been possible, but the system with XRP is so much better," could you please touch on the reputational question.

That is, wouldn't the system be so much easier to trust, and your company be so much more secure from criticism, if you had chosen not to create an independent currency controlled solely by your company?  Wouldn't all the rhetoric have been so much more believable if you hadn't reserved the right to print money?

Looking forward to your response.

In fact, despite your words, you have that control. Satoshi didn't.

Maybe in five years, in the middle of some establishment induced crisis, OpenCoin will announce something like that: "The goverment asked us to put some extra XRP into circulation, because of ... the crisis. We will, because of the severe nature of this very surprisingly and unexpected crisis, be responsible and inject xxx RP into the economy to help everyone (and to protect the country/world against this libertarian terrorists)". Satoshi cannot do this.

By the way, no ones knows about the real motivations and interests of the founders/the founders of bitcoin. This is stuff for a religious legend.

It's a single point of failure for a non-distributed scheme, like pretty much every payment system out there. If we are successful, Ripple will be different.

I hope not. We don't want that kind of control. It doesn't benefit us in any way and it will decrease adoption. Our financial interest is in seeing the value of XRP go up and the primary way for us to achieve that is broad adoption of Ripple as a payment system.

Think about Satoshi and Bitcoin. His financial interest was in seeing the value of his Bitcoins go up as much as possible. Do you think he would have done better had he retained strict control over Bitcoin or tried to suppress altcoins? Or do you think he realized that broad adoption was the key and that required decentralization. The originators of Ripple were all Bitcoin people. These are things we fully appreciate. (And think about it. Would we even try to build trust with such a fundamental lie when trust is clearly essential to growing the network?)

In my opinion ripple is the answer of the establishment to bitcoin.

This is about assimilation of decentralized crypto currencies, rather than to destroy them.

Ripple/OpenCoin will be the Google of crypto currency, inclusively the connections to the intelligence service (like Google). Intelligence service (NSA, CIA, ...) will remove every obstacle in the way of ripple, in exchange for access to the currency control and data.

This is what's going on behind the curtains. Learn about Google, intelligence operations and modern population control. Think it through. Be aware. Make a profit by pumping tax payers money to you. Stupid as they are, they deserve it.

Because there's no reliable way to find consensus by IPs or anything network related, Bitcoin's method of finding consensus is proof of work: once CPU (cycle) one vote.

The way I understand it, the important difference and reason why Ripple does not need proof of work is because it has something reminiscent of actual accounts. JoelKatz compares Ripple's method of finding consensus with how people in a room would come to consensus. That's only possible because you know what people are, what a person actually is (as opposed to within the Bitcoin system).

So the security in Ripple is rooted conceptually in its social aspect, not in the code. It's actually not free (you need XRPs) and it takes effort (setting up trust relationships and/or gateways) to create an account, which is something that cannot be so easily automated. Kind of like a clever CAPTCHA.

I see Ripple as a great way to help the transition from fiat to crypto. Even if it succumbs to the threats you mention, it may still have helped Bitcoin or some other cryptocurrency gain acceptance.

That will be wonderful.
I promise I will make a Ripple account when this will happen and I will try it but probably not before.

Two big differences:

1) You don't have to install the client. It's pure Javascript and can run in your browser.

2) We have released the source code to the client, the only software that runs on your computer.

They will publish the full source code, of course.

It's just they didn't do it yet for the reason that it's easier to make changes, which are numerous at this stage.

We all thrust some private companies to install their products without knowing the source code. What is the difference by Ripple ?
The difference is the money. You are not playing games or just editing some pictures with Photoshop about your grandmother but you are moving money.
Let us say that Ripple really publish 99% of the source code and will keep just 1% for some plausible reason. Just like Google by Android. But this small piece would play a crucial role.
Would you keep greater amount of money on an android tablet ? If yes then you can keep it in Ripple also. But if you wouldn't keep on a tablet where 1% of the code is controlled by Google than you don't keep ether in Ripple.
Modern governments are interested in emerging technologies.
It is well known which governmental organization financed Facebook and who has the most gain from this huge collection of information.
It wouldn't be very surprising if the same organization would be interested to have a hidden control even about the last percent of the financial transactions of the world.

https://bitcoinfoundation.org/blog/?p=163


Replace Satoshi with Ripple dev's names who forgot there's a reason Satoshi is anonymous

Use Open Transactions instead

There are about a thousands banks in operation in fiat world that are not decentralized and they ( greedy capitalist pigs ) do not think they are fools and they think they are doing just fine fighting decentralization to tooth and nail.

Any commitments are also subject to be changed in the future. For example if somebody sees a hugely lucrative  market that you could tap with a change of commitments it is a nobrainer move to make and it might be very possible to do without sliting any throat. You just leave the early adopters behind and retarget your customer base to be the new group that does not care.

Any commitment that you do not fulfill today right now but postpone for some unspecified later date is not something that feels to be important deep inside your heart and any bunch of customers that do not demand it today right now do not keep that commitment that important either. If it is okay to postpone it for some unspecified later date it is certainly candidate to be postponed forever and nobody would care very deeply it that happens.

Because there are much more money some centralized party can make without decentralization it is right to be sceptical of such thing happening later. There is just no precedent of that happening ever. Satoshi started the bitcoin decentralized right from the start and that was critical part of it gaining first acceptance. If you are able to gain the first acceptance and first huge market success to ripple without decentralization there is absolutely no incentive for you to do it at some later date.

LOL, what is it with you and the insatiable desire to see other people's source code 

I think they are absolutely right not to release it yet. As they've explained, they work hard on it and do a lot of tweaks. It is much easier when you don't have to sync it with anybody else.

No reason to hurry them - let them do things right.

Anti- money laundering legislation is not restricted to "actual money". Anything that constitutes a transfer of wealth can fall under AML if the transfer is designed to obscure the origin and destination of trade that could be illicit. Transferring deeds to a house, a bunch of diamonds, stock or gold all can be used for money laundering. So Ripple as a whole falls under AML, as does Bitcoin, as does SecondLife linden dollar. With the major difference that currently Bitcoin is the only one that can't be regulated short of a complete ban.

Since Opencoin is a US company it will accept any government interference if it wants to keep it's investment, and that's a single point of failure for a distributed currency scheme. As I've detailed in other posts, even if you publish the source there's no way for the network to fork if people don't like your newest changes; you will maintain complete control of both your ledger and any alternate ledgers for the foreseeable future.

The primary advantage is seamless interoperation with fiat currencies. Sure, this calculus would be different if we lived in a world where fiat currencies were irrelevant, but at a minimum, that's a long way off.

Personally, I've never agreed with the "mining is a waste of resources" crowd. And I agree that Bitcoin's proof of work system has proved to work extremely well while Ripple's consensus system is relatively unproven. I personally was a skeptic at first, both believing that the technical obstacles were insurmountable and that the result would be brittle.

I'm personally convinced we'll have roughly the same degree of success in this area as Bitcoin has. Will there be problems? I'm pretty confident there will be. Might there be real double spends and rollbacks if something goes horribly wrong? I can't promise there won't be. Will the system survive and be stronger because of it? I'm quite confident it will be.

We designed Ripple after seeing the strengths and weaknesses of Bitcoin's proof of work system. The biggest weakness is a 51% attack. If that happens, fixes get really ugly. For example, changing the mining algorithm would cause all miners using ASICs to lose their investments in ASICs. Basically, you are trusting that the majority of mining power will be in honest hands forever.

So we reduced the problem to one of agreeing on a transaction order and established a mechanism just to do that. In addition, we designed a scheme that doesn't rely on rewriting the past rather than one that is based around doing this. And we ensured you could always tell whether others were on the same "blockchain" you were and that network splits were detectable.

You really don't see how enormously to our benefit it is to decentralize the network? Do you think Satoshi was a fool when he opened Bitcoin to the public and decentralized it? Do you think he would have done better had he tried to control it? Any monetary system that betrays the commitments it makes slits its own throat. Long before it will make any sense for OpenCoin to create more XRP, it won't have that power. All of these things are in our interest.

We expect gateways, which handle the movement of actual money, will be subject to AML/KYC compliance issues. We have excellent legal advice and we will continue to follow it. You are certainly correct that this is a major issue.

Let me first state that I have nothing but respect and admiration for the Ripple team, especially Arthur, Jed, Stefan, and JoelKatz.

However, here's how I see it in comparison to Bitcoin. My issues can be broken into three parts:

1: Functionality and Purpose
Ripple is promoted as a "way to send any currency to anyone." Yet it is not this. It is simply a way to send IOU's of fiat currency to anyone, and this is a very different proposition.

Bitcoin, on the other hand, is a way to transact actual assets - or more specifically, one asset called Bitcoin. It moves beyond fiat currency entirely, and because it moves the actual asset anywhere instantly, there is no need for IOU's.

Ripple may be a great way to trade in normal fiat currencies, but I don't really care to do that anymore, now that Bitcoin exists. Yes, it's true that Ripple has XRP which is a cryptocurrency with many similar features to Bitcoin, but it offers no advantage over Bitcoin, and thus why do I care to use it? I might as well use LiteCoin 

2: Security

Ripple supporters will say that XRP is superior because it doesn't require mining, but this is a seriously contentious issue - let's remember that the Bitcoin mining process is not arbitrary. It introduces a specific type of security based on proof of work. While Ripple removes the proof of work concept, it may not require burning CPU cycles, but it is thus not protected by any proof of work system. Maybe proof of work isn't necessary, but Ripple will need to prove that over time, whereas Bitcoin's system has proven amazingly resilient over four years in the wild, with every hacker in the universe trying to exploit it.

3: Centralization

Ripple is far more centralized than Bitcoin. I worry if it took off, it'd suffer the same fate as eGold. It's very unclear what power OpenCoin (the company behind Ripple) actually holds over the system. Today, OpenCoin holds basically all power. They claim that in the future OpenCoin will "release" this power out into the wild and the company will no longer be centrally important. I am extremely skeptical of this. I'm also extremely skeptical that OpenCoin can't/won't create more XRP's, and it bothers me that it's structured in a way to dish out the existing XRP's from a central postion (I see uncomfortable similarities with how central banks operate, though I'm not ideologically opposed to Ripple since it's voluntary).

Further, I think the following is a fair statement: Any company that enables private (non ID verified) person-to-person transactions will be taken down by the US government, period. I believe it is far more likely that OpenCoin/Ripple will be forced to submit to the regulatory apparatus, and will at some point (though its advocates will deny this) require ID verification and all the AML/KYC compliance that a company like Paypal faces. If they do this, the system is pointless. If they don't comply, they will have to close and Ripple will be on its own. I am unsure what kind of community is there to support and build Ripple in the future if the OpenCoin company shut down, as its early-phase development has been structured like a startup (with the founders earning salary and getting paid in "stock" ie - XRP's).


Now, none of my contentions mean Ripple will fail, but I am simply skeptical of its future. Frankly, Ripple may have been exciting before Bitcoin happened... but then Bitcoin happened.

There would be nothing separating ripple from a government if they had reached that position of authority.

There is also nothing decentralized about them except them implying so a thousand times on their website, they are like any other bank, only difference is they are trying to promote their agenda with Bitcoin charlatanism/demagogism.