Topic: Ripple XRP distribution requires immediate formalization (Read 5917 times)

Calm before the storm, some stuff might come out at today's meetup in SF

Any news from Ripple? I haven't seen anything from them in a while.

Guys, stop smoking crack and poo pooing, Ripple is Cryptocurrency 2.0

Cheers

For the record: I have thought of a more fair distribution method, whereby I will receive all the coins and spend them on goods and services in the Ripple economy.

RFC: XPR post-50% giveaway distribution / sale proposal:
https://bitcointalksearch.org/topic/m.1574081

+1

Great discussion here guys. The only thing that really stands out is that Joel, despite replying to nearly every technical aspect (albeit biasedly), has not once addressed the issue of trust, nor denied his corporate overlords' intentions. Your silence will only incriminate you further.

What's that Joel? You plead the 5th?

It's like these guys are trying to patent the cure for cancer and then license it to the world; and then they claim they aren't sharing it for free because they love us.

I like the proposal to put a fixed dollar-pegged ceiling price on the large remaining percentage of 50% XRPs that will NOT be given away.

According to the wiki here https://ripple.com/wiki/XRP the founders intend to retain 20% and according to posts elsewhere, OpenCoin Inc (which is effectively controlled by the founders) will end up retaining another 30% after the giveaway.

At that point OpenCoins' founders (and through their control, the company) will have to decide if they want to become Craigslist or Google level wealthy, i.e. how much eventual long term wealth is enough ?

If they want to become like Google, they will keep those 50% of XRPs sequestered for long periods of time and will eventually pass most of them down to their heirs, etc.

If they want to become like Craigslist they will adopt the proposal made earlier in this thread to do an orderly sell off of all but say 1 to 5 % of the remaining XRPs at a fixed USD-denominated low price to ensure that the cloud of a "giant XRP hoard" is no longer hanging over the network, but this will still leave both the founders and the company wealthy, just Craigslist wealthy not Google-level wealthy.

There ARE ways to ensure that it's hard to fake the distribution or fake sales of XRPs by limiting sales to aged accounts and in fixed maximum per day quantities, etc.

Cheers ....

OC's Ripple is looking more and more like another "pre-mined" alt-coin, but this time with corporate backing and a big, sneaky PR campaign.

LOL. How is that different from troops throwing away bales of dollar bills from choppers in Iraq?

The only reason to do that is to make everybody happy instantly for a certain time. The only reason you can afford to do that is that the dollar bills have some value to the person you give them and in the same time you know you can print as much as you want if you need it. This is not the way you can build a sustainable economy!

Yes, they could, that's part of the problem.

Their interest would of course be keeping control of the XRP (and the associated capital gains) while creating the illusion that they have been widely distributed and hence healthy. Probably won't matter much but you just can't "force" them to sell the coins, it's entirely up to them what to do with them.

What would be their interest to do that? They could also take themselves part in the give-away.

I don't think it's enforceable. OpenCoin can simply "sell" all the XRPs to itself.

Proof of work may suck, may be a waste of electricity, etc. It doesn't matter. All that matters is whether it is better to "waste" power and have Ripple succeed or not "waste" power and have Ripple very likely fail. Inasmuch as those really are the two choices, it becomes more accurate to say "utilize power" instead of "waste power."

The irony is Ripple as a payment system is unsustainable without independent currency like bitcoin being the backbone (not saying bitcoin is perfect). The 10+ (?) people furiously working on Ripple, you've mentioned above, will hopefully understand this very soon.

tl;dr : In this message, I formalize the proposal from Andrew Vorobyov to distribute XRPs but "forcing" Ripple creator to sell 99% of all the XRPs at a fixed price. It seems to only have advantages (including for them). The only remaining question: should the fixed price be in bitcoins or in dollars (or in euros)



Andrew's idea appears to be quite sensible. Here's what you can do :

1. Keep for you only 1% of all XRPs. Or 0.1%. The fewer you keep, the more people will trust Ripple to not be controlled by one big player. You currently decided to keep 10%, which is quite huge.

2. With the 99% that left, give them through give-away when possible (such as on this forum) and also allow people to buy them from you for a fixed price. A price that will never vary until the faucet dries out.

How do you fix that price? It's quite simple: make up the price you think the company should earn in the next 10 years. Say $100,000,000. Consider that you will give-away 49% and sell 50%. That values the XRP at 0.002$.

a) But then we will ultimately dry out.

That's the goal. As long as you keep a significant portion of the XRPs, there will be no trust in the system. The less you have, the more decentralized the system will be.

b) But we need to adjust the price.

No at the start. As said, this will introduce some stability and some trust in the system.

c) But we need to make money.

Remember that by doing that, you are already making 100 millions of dollars. Then you also have your services. And you keep 1% of all the XRPs in case the value increase. If it's not enough then, obviously, we cannot trust you to bootstrap Ripple to become a trully decentralized system.

d) Someone could buy a lot from us to control most of the economy.

In order to become as powerful as you, someone as to invest 2 millions of dollars in Ripple. That's already quite a lot. Why cannot we trust someone that invest 2 millions of dollars and should we trust you instead ?

e) Why not link it to bitcoin instead of dollars ?

This is an example. I would say that linking to dollars might be more appealing to those who are not familiar yet with bitcoins. It would also mean that XRP is as volatile as the bitcoin. On the other hand, as I guess you expect bitcoin's value to increase (like I do), this can only be good for you. But it can be "too good" and kill the Ripple economy. Let take the scenario where bitcoin suddenly rises to 1000$ and you still have more than 80% of all the XRPs. It means that an XRPs will be valued 100 times more. It might be a showstopper for newcomer wanting to enter the Ripple economy.



All in all, I think it is a very good thing. It kills speculation during the bootstrap phase (speculators can still play with bitcoins) and it is completely in line with the "XRPs is not a money, only a spam prevention". It also means that, once the faucet dries out, 100 millions of dollars have been invested in the Ripple economy. Until that time, a transaction would still stay cheap.

There are not yet concrete implementations of the prerequisites, no.

I don't see a problem with Bitcoin's rate of evolution, these things don't happen overnight and the workforce will increase as adoption increases.

But that's not the point I originally tried to make... According to OpenCoin, XRP don't presume to be meant as the world's new global currency, and as such the goals of the Ripple project are less ambitious than those of the Bitcoin project (so it's no surprise it can achieve these goals faster).

But assuming XRP is indeed destined to become the world's currency - If Ripple's technology is indeed superior it might happen, but I wish they didn't completely botch the initial distribution.

Your proposal is certainly intersting and b/c I'm unfamiliar with its details I would have to study it to have an opinion, however since being posted last July 05 did any of it make it into any branches in bitcoin's github or was there any uptake on it ? I honestly don't know.

But this raises another related issue:  After being in existence 4+ years and presumably having a whole ecosystem of companies and users around it, so far Bitcoin community has managed (maybe) to fund one full time developer (Gavin through Bitcoin Foundation).

Now compare that to 10+ (?) people (by now) furiously working for almost 2 years (my guess) on Ripple in stealth mode and furiously implementing the protocol and fixing bugs and doing multiple daily commits as their full time jobs.  

Which source tree can sustain a higher rate of evolution Bitcoin or Ripple ? The question is obviously rhetorical, since the answer (Ripple) should be pretty obvious.

Bottom line, Bitcoin was the 1.0 version and a trail blazer and despite having a huge fan base around it and being in existence for 4+ years ... it has achieve limited penetration, but worse than that its rate of evolution shows no sign of ever being anything faster than the glacial rate it has been so far ... this is partly "tragedy of the commons" and partly because not even Satoshi could get all the initial parameters tuned just right AND leave some others tunable to allow the system to evolve gracefully.

In the long run, Ripple is simply a superior technology (assuming its foundational rigor holds up in independent peer-reviews !!!) AND its implementation is being done by a much larger professional team with full time jobs and not occasional pull requests submitted once in a while ...

I will take that despite the XRP 50% Fort Knox problem lurking around in the future because that problem is either theoretical (if the hoard is securely locked up and not flood-released OR self-defeating because as soon as it starts being used to cap or manipulate XRP market it will start melting away since the absolute upper bound of 100 XRPs still exists and you can only sell so many of them before you lose control of the market.

Cheers ...

There was never a reason to; now that there is, some increase is likely to be agreed on. Anyway, increasing max_size is needed but isn't really the solution I have in mind.

Also solvable with the above.

I do see the difference and I describe it further down in my post.



1. There is absolutely no observable convergence in endless discussions on increasing Bitcoin's max_blocksize over the years, assuming this convergence does not materialize ... Bitcoin will be limited to 7 TPS and tx fees will rise until small amounts are not sendable.

2. Bitcoin transactions can never be made secure without some confirmations by at least a few blocks, and block time gap variance is so high that two days ago I had to wait 65 minutes for a single block to come through.

3. Because block time is sacrosanct in Bitcoin, there is no feasible solution in sight for this, except perhaps for small transactions with some kind of "overlay" monitoring network ... but hey those small transactions will soon become too expensive as blocks fill up and fees rise.

None of the above affects Ripple design. It can (if dev promises are taken at face value) handle huge TPS volumes and consensus is achieved in 5 - 10 seconds. Also Ripple has superior ledger data structures ( https://ripple.com/wiki/Ledger_Format ).

What about multi-asset trading and self-issued webs of trust and IOUs ... all huge additional feature jumps that maybe implementable in Bitcoin using colored coins or Bitcoin's scripting (if / when it gets enabled ) but in reality ... none of that is likely due to 1. 2. & 3. above.

Cheers ...

Do you really not see the difference between
1. 50% of the coins are in circulation, the other 50% will be distributed according to a fair, objective protocol; and
2. 50% of the coins are in circulation, the other 50% are held by a central authority to do with as they please?
Even with the unwarranted assumption that OpenCoin is noble, what about the security implications of a single party storing an amount of currency equal to the total in circulation by a single party that can be hacked?

I agree that the initial distribution doesn't matter that much, but it needs to be reasonable. If it was possible, distributing bitcoins equally among all people would be superior to PoW, but that's impossible so PoW is good enough. But centralized distribution is not good enough.

What scalability strengths? Maybe I'm missing something but AFAIK each transaction in Ripple requires much more processing than in Bitcoin, hence it's less scalable. The ways to increase Bitcoin's scalability are already known - I'm sure such ways are possible for Ripple too but they're not as widely studied.