Topic: Ripple XRP distribution requires immediate formalization - page 3. (Read 5917 times)

This is exactly what will happen once 50 billion XRP have been given away.

The only real difference between your PoW approach and our giveaway is that yours requires people to waste money and resources on needless PoW computations and ours doesn't. And ours allows giveaways to be used to promote the system and drive adoption and yours doesn't at least, not as much. Your scheme also allows people who put effort into building optimal PoW setups to get larger shares of XRP than ordinary people who don't. Your scheme is easier to implement. As I said, using PoW as a giveaway mechanism is still very much on the table.

I disagree, and I outlined a solution here. You guys didn't think hard enough.

When I say proof of work, I don't mean proof of work to validate the transaction I mean proof of work to create the XRPs. Users with mobile phones, smart credit cards, etc.. would have to go out and buy their XRPs on the open market. Which is the end-game for Ripple anyway once all the XRP are given out.

Eventually, the requirement that Ripple users fund their new accounts through XRP purchase on the open market is the ONLY WAY for XRP to serve in the anti-spam role.

If you mean using PoW to submit transactions directly: Whatever PoW algorithm you use, an attacker can set himself up to solve it optimally. Legitimate users are stuck with mobile phones, smart credit cards, or Javascript in browsers with limited PoW capability. An attacker can create as much proof of work as he wants without depleting any finite resource. So you're trying to ration based on something that is available to an attacker in literally infinite supply. Then what do you do? Replace your computer with a faster one?

If you mean using PoW to distribute a currency: Sure, that works. But it's arbitrary, unfair, and wasteful. It makes perfect sense for bitcoin because it's needed to secure the blockchain. It's functionally equivalent to auctioning off the currency as the people willing to invest the most in obtaining it wind up with it, except the money is wasted instead of put to anything remotely resembling good use.

This, this, this!!

OpenCoin:

"Don't worry, we will distribute XRP fairly just trust us"
"Don't worry, the algorithm works and we will prove it. Soon."
"Don't worry, it will be open source soon."
"Don't worry that our list of employees is secret."

Translation:

"Just trust us, we're a bunch of altruistic humanitarians who have nothing but the best of intentions. In the meanwhile, we encourage you to invest money in our system not because it has been rigorously reviewed or open sourced, and despite that we have kept control over the entire volume of currency units, but because we have given our promise and word as upstanding citizens to forgo our own potentially vast economic best interests in lieu of the greater good."


Are you kidding me? What upsets me the most is how insulting this is. Coming a close second is how Ripple has pimped the goodwill generated by Bitcoin for its own self interest.

What's wrong with proof of work?

I hadn't seen Meni's post before making my own but coincidentally he came to the same conclusions regarding the suitability of XRP as currency.

XRPs have an effective floor on their price b/c people of opencoin will slurp up enough to ensure spamming is infeasible, however
just like Bitcoin there cannot be an effective ceiling on their price in the long run b/c total amount is fixed and the price can only be held down by selling them off until OpenCoin, Inc eventually runs out.

It seems like ripple can and possibly will have a much faster bootstrapping than Bitcoin though, which has remained pretty "autistic" until very recently b/c it's so unlike all the other fiat systems around it.

That's a fantasy. The Ripple wiki explicitly states that the 100 billion XRP will be enough for thousands of years worth of transactions. Distributing XRP according to your schedule would make them no longer scarce, and thus no longer capable of functioning in an anti-spam role.

XRPs have to be metered out slowly. Coincidentally this is also the way to profit the most from them. Coincidence?

My complements on your great work with Ripple, it is extremely exiting by its disruptive potential.

Here is my suggestion for a solution:

You need some native anti-spam coin, which by default will have to carry some value. You also need funding to cover your investment; for coders to work on it for the future, etc. These are legitimate concerns that seems to call for some kind of a currency, to solve both problems at once.

But from this line of thought you immediately hit the big scary initial distribution problem - if you are successful: Hoarding; tulip mania; acrimony over the fairness over the give-aways. All this because what you have made easily will become not a postal stamp but the native currency for the network.  You have just set yourself up for the possibility of a particularly nasty death by success.

Solution: Freicoin with a twist, actually SpamFreiCoin.

You start off with premine of 1000 trillion antiSpamRipples. You sell them for 1 US cent (or a few sathoshis) each, or give them away for 3 years - the rest is destroyed. After these 3 years replacement of the destroyed ripples will be by demurrage, like Freicoin, about 5% every year. This is the miner grant for making new antiSpamRipples to somewhat replace those destroyed, and to have a distributed way of securing the network. Tulip mania is averted by making antiSpamRipple useless as a currency by having an extra large destruction of antiSpamRipples transferred from one Ripple account to another, above the mandatory tx fee. Like 10%: enough for you not to shrink from sending a few to your auntie and nephew, but enough to prevent any speculation on it becoming a currency.

Brilliant! Send ripples to domains, equal to the total cumulative pagerank of the pages on that domain! You're a genius!



-MarkM-

Throwing my 2c in - practice had shown fairest systems are these where rules are known equally to all players. Ripple creators seem to think they can get better than this. NOPE. At best we'll end up in Google PageRank situation where central authority has to change the rules continuously to maintain semblance of fairness. At best.

Are you sure? Think about "Print" not as a printing press but about the "Print' button on you keyboard!

Um, no.

Dollars are not scarce, the Federal reserve can print as much as it wants. (OpenCoin didn't "promise" not to print more, it is impossible by protocol)
Dollars are not durable, they can be easily lost and stolen.
Dollars are not portable, they need to be physically carried around, and in large quantities have significant physical volume and mass. (I'm assuming physical notes, if you consider bank balances as dollars they are slightly more portable but less scarce and durable.)
Dollars are not as divisible as Bitcoin / Ripple credits.

So is the dollar, the euro, the pound, the yen. Well, until the moment when the corresponding central authorities decided to print new trillions of these "good" currencies. How is XRP different? Oh, the central authority promised not to print more than 100 billion? Is that what makes XRP a good currency?

Transaction fees have to be paid either in BTC or Ripple IOUs (as per BTC/IOU exchange rate). Introducing XRP is what will kill the whole idea of Ripple. XRP is just another private currency like AmazonCoin!

+1 Meni

A few comments...

XRP as a currency.

XRP are not "just" what you use to send Ripple transactions. They are also the only thing you can hold in Ripple which is not an IOU. I think XRP will most definitely be a currency, with a non-negligible total market cap which floats against other currencies. And to understand why you need to look no further than why Bitcoin is/will be a valuable currency.

Bitcoins are valuable because they are in use, and they are in use because they are scarce, durable, portable, fungible and divisible; that is, a good currency. So are Ripple credits:

Scarce - There's an upper bound of 100B XRP.
Durable - You can store credits as private keys, back them up and encrypt them.
Portable - You can send them easily anywhere using the Ripple system.
Fungible - I don't know enough about Ripple but I'll guess all credits are the same.
Divisible - There are a total of 100 quadrillion drops in the system.

XRPs have all it takes to become a good currency, and I believe it will be used as such. A currency also needs to be current, and here psychological factors play a large role - the fact that many of the early adopters don't perceive it as a currency might slow down the process, but it won't stop it.

The fact that, in addition, XRP are what you use to send transactions in Ripple, will help them gain value as Ripple becomes in greater demand.

OpenCoin distribution model.

That said, there are issues with the distribution model that will either:
1. Enrich the creators above and beyond their fair share for their contribution, or
2. Slow down the adoption as a currency, as people are wary of #1.

In Bitcoin, the distribution model was democratic from the start. Anyone who would listen was able to take a part in the distribution and be equal to the creator and everyone else. Distribution is based on computational work which is measurable and unfakable. People have profited purely based on their belief in Bitcoin and their foresight to understand it. Knowing this is what gives me the power to overcome my envy for those who came before me.

But with Ripple, the creators get all the credits to begin with (some personally, some as part of OpenCoin). This means that the "creators are enriched by people using the system" factor is much more pronounced.

As far as OpenCoin's distribution plan - the fact that they have a plan, that is, that a centralized body is deciding where the credits should initially go to, is a problem in itself for a decentralized system. Also, I doubt a good plan can be come up with.

It will also be difficult for OpenCoin to prove they're not faking anything and "distributing" the credits back to themselves.

I don't think you can do much better than proof of work. You can use consensus for transaction synchronization, and a Bitcoinesque inflation schedule and PoW-based distribution (it would be like mining blocks without any transactions). If it was this way from the start Ripple could have truly been said to be decentralized.

That's good for you, but if I'm going to use the system, I do care what will happen to it after the flood. That's the point - with all due respect to the founders' business model, we are questioning the ability of this system to act in a sustainable, decentralized way.

Guys please stop pitching your 'solution' which requires complete teardown of the current ripple design.

You are missing the little fact that they probably already threw a million dollars on this project, risk has been taken there is no turning back now.

I can attest to the intelligence behind the project even though I think it may have some points of fragility to deal with in the system but they should have a reasonable chance with this design.

If you are truly unhappy about the 50 billion XRP in their hands you are free to fork/copy their system once it's open sourced  

This is too ambitious. I'm afraid I have to better understand and figure out what you're really trying to achieve? Time to take a walk in the mountain.

No. Alice withdraws the asset from the Issuer X. She transfers this assets to Bob by signing it with a blind signature. Bob is transferring this assets to Carol by doing the same. Carol transfers it to David. David deposits this assets to Issuer X. Thus Issuer X knows only the withdrawing and the depositing parties - Alice and David. They know nothing about Bob and Carol or how many people were in the chain between Alice and David. This is why it is called cash-only mode in OT server.

This is the problem we are trying to solve. We're trying to make them different ... better. Bitcoins have different properties from USD -- they can be electronically transferred on the Bitcoin blockchain without anyone having to hold them. The idea is to take advantage of that ... somehow.

For example, say we want Bitcoin to better support nanotransactions. We could withdraw bitcoins from the block chain into a system optimized for microtransactions. Then, when we had a balance we wanted to cash out, we could withdraw back to the bitcoin block chain. The same thing could be done for faster confirmations. However, for this to work, we either have to have a central authority who holds the keys or we have to each pick our own issuer as Ripple does. The question is ... is there a better way?

I can prove it can be done, so it's not impossible. But my proof is a scheme that's not practical.

This doesn't solve the problem either. It still makes it so that one and only one entity can transfer any particular asset. This means that either that entity has to be a central authority everyone trusts or different people pick their own and the assets aren't fungible.