Topic: Ripples a threat to bitcoin? - page 2. (Read 12820 times)

You cannot send any payment in ripple. You can send Ripple IOUs. If I go to a Ripple gateway in Small Town USA and give them a fist full of Kenyan Shillings the gateway is still left with a fistfull of physical shillings it needs to convert somehow. Sending an IOU for Kenyan Shillings to another gateway doesn't help things, it only adds another layer of trust needed for the recipient.

So do you see that Ripple doesn't transfer currencies, only debt?



If you wish to transfer a currency I suggest using a currency that is suitable for this, without the need for any trust, such as Bitcoin BTC.

Ah I missed our little chats over the past few days of forum outage! 

I can do the exact same with XRP.  It's no different.  I don't have to deal in BTC IOU's if I choose not to.  So the "form of liberty" remains unchanged.  Using XRP as a bridge currency is what gives it the potential to be valuable.  One of the main reasons Ripple is superior to a Bitcoin payment network (Speaking of payment networks not currency verse currency) is that I can send payment in any currency I choose and the receiver can receive any currency they choose.  With the blockchain, I can only send BTC.  That's simply too limited for a world with well over 100 different currencies and that's not including all the digital currencies.  

And as we continue to see, business' are not going to adopt Bitcoin by itself.  It offers no real upside for business' or consumers. With the exception of Bitcoin as a store of value, almost all of Bitcoin's benefits are purely ideological but not actually beneficial to business' and users.   However, Ripple offers tremendous upside and gives crypto users a door to all business' that join the Ripple network.

you're comparing pre-mined coins which can be minted at will by RippleLabs with bitcoins!!!! Yeah ok, thats just no comparison to me though.

Ok agreed and my comments weren't only aimed at you but the overall misconception by many.  That said, XRP's have no counter-party risk either and are not IOU's.  So again, we are right back where we started.  BTC not in a wallet is an IOU.  It is not exclusive to Ripple.  Ripple just allows the exchange of IOU's via distributed exchange, which no "Bitcoin" exchange can provide without Ripple.

Coinseeker I'm not defending bitcoin exchanges  I agree those bitcoins held in exchanges are IOU, that is not relevant to the fact that the bitcoins in my wallet are an asset with no counter party risk, which i can send to anyone else who has a wallet as a direct transfer of an asset. Not an IOU.

If you can get past MtGox for one second.

Bitcoins is not IOUs

+1 EM.  It's staggering to me that with one hand people will attack Ripple gateways and with the other defend Bitcoin exchanges, when fundamentally, they are the exact same thing.    What makes any of you think Gox is holding the actual BTC/USD/EUR that the balances reflect?  What makes you so certain they are not engaged in the same practices you "assume" every gateway will engage in?  

You bash "IOU's" but as Gox began to show it's insolvency, the term "GoxUSD IOU" started to become second nature on this forum.  You were starting to finally get it.  It is an IOU and without trust, it loses value.  Hence the reason for the huge spread between Gox and the other exchanges.  And we saw what happened when a run on Gox happened...they started requiring verification, even for BTC withdrawals.  Was that because they genuinely wanted to comply?  Maybe but more than likely, it was to buy time because they are insolvent.  Their house of cards is collapsing.

Here's a key point so pay attention:  If you give your money to a third party, ANY third party, it's not your money anymore.  PERIOD!  You gave it away to someone else.  Especially in an unregulated crypto world such as this.  Some of you are just going to have to come to terms with that truth.  The question as a user that matters, is do you TRUST this third party to give it back when you ask for it.  Nothing makes a Ripple gateway or Bitcoin exchange inherently more or less trustworthy than the other.  Just because it's a "Bitcoin" exchange, dosen't make it more trustworthy and just because it's a "Ripple" gateway doesn't make it less trustworthy and vice versa.  They both have the equal ability to operate with a fractional reserve strategy.  

I'm sure just like Bitcoin, there are plenty of reasons to knock Ripple.  This isn't one of them.  If you don't want to deal with third parties, then don't.  Keep your crypto in your wallets and "hold it for the longest time."  But please, stop with these futile attempts at trying to tie fractional banking, exclusively to Ripple.  Anytime your crypto is outside of it's wallet, the risk is there.  Matters not, which payment network you're utilizing.

Sure it can happen, but first people would change their trust lines accordingly once they become aware of a fractional reserve strategy of a counter-party and they would also do it if external circumstances change. You can't really protect against world-changing sudden events which take place so fast on its own that you can't react. But if people can react there is a chance a crisis can be averted.
I'm fairly certain that such a scenario would be less likely to occur than a run on the remaining exchanges should gox bite the dust.

What's a zachope run?

If you are asking me how ripple can supply liquidity better than mtgox or localbitcoins, it's because almost everybody can be a gateway, it's much easier than running an exchange so less points of failure. As of localbitcoins there are at least some insurances that IOUs are represented by real money because liquidity is determined by trust lines which function as some sort of decentalized financial assessment. Not perfect, but certainly better than nothing.

maybe when theres a run on the gateways, they could become 'too big to fail' and get bailed out with taxpayer money. That could save the ripple network.

Mucus, you say bitcoins will go to fractional digits if Mtgox goes down, when challenged for your analysis of why you state that you change subject.

I notice no-one comes up with a good explanation of why zachope run on gateways scenario won't happen.

Instead, another change of subject.   

 

It's more like
Bitcoin Ripple gateways ⊂ Bitcoin exchanges.

I'm noticing a recurrent theme among ripple enthusiast that ripple gateways are the same as bitcoin exchanges.

Gateways != Bitcoin exchange

You are asking me for data I can't access, is that your argumentation tactic?
There was just above 20M USD in the order-book on mtgox and it's safe to assume that's still there. I don't think there is a significant amount more on it, what's really happening is anyones guess.

Orders on localbitcoins or OTC do not represent actual money nor bitcoins. Especially in cases where stupid people do the thing "if bitcoins drop to XX I'll buy XXXYY worth" they do not have actual money anywhere but just put it in there just to have the option to do it should they come across the money by then. They would be quite reluctant to pay even those prices without the price fixing taking place on Gox.
With ripple on the other hand there is a better chance of actual liquidity since its trust lines require participants to well be honest about their financial situation.

May my answer inspire critical thinking rather than a religious experience.

Kindly tell us approximately how much fiat is stored at Mtgox. Also, please tell us how much fiat is stored in the other exchanges combined as well as transactional exchange averages from Localbitcoin.

Please back this opinion up with some actual data, so that we can understand exactly how much of the "almost entire accumulated worth (fiat money) Bitcoin derives it's value from" is actually stored on Mtgox.

Thanks. Can't wait. Should be enlightening.

If mtgox goes down Bitcoin is going to fractional digits.  It's holding almost the entire accumulated worth (fiat money) Bitcoin derives it's value from and no way to compensate for it. The only way around that is ripple mass adoption or something similar which could supply liquidity very quickly. In that sense Ripple would save Bitcoin.
On the other hand you "if the gateways go down" would be the equivalent of every single exchange shutting down.

You cannot compare MTGOX to the problems of the Ripple network.
The Ripple network is only as strong as the Gateways. If Ripple Gateways go down the whole system fails as who no the Ripple network would trust anonymous new gateways and accept their IOUs? I might trust my mate Fred the Gateway with a few bitoins to change to Ripple IOUs but the network would have no incentive to trust him without a hefty risk surcharge.

Bitcoin however could exist as face to face transacted currency if need be without needing and centralised trust system.

Bitcoin's strength is that is that is takes all power AWAY from gateways (ie Legacy Banks) as well as those who control currency (National Treasuries).
Gox may well bleed to death but that by no means represents a catastrophic failure of bitcoin.
If Gox were the main Ripple Gateway however the shock to the Ripple trust system would be far greater.

Many points of trust = many points of failure, whether that's by incompetence, malchance, malign actions by participants or by government actions.
The response to this would be gateway failure leaving the Ripple network with a surplus of unawnted IOUs.

Bitcoin could thrive in Africa, South America and many other countries without any need for trust in what is happening in the other countries that use Bitcoin.
In this analogy:
Ripple gateways = Legacy Banks.
OpenCoin (or whatever they are called) = Central National Treasuries.

Sounds like Mt. Gox, Bitstamp, Coinbase or any other BTC exchange for that matter.  What prevents them from doing the same?  Seems your issue is short sighted.  You're trying to lump Ripple -a payment network- with a gateway.  How a gateway operates is completely up to the gateway and it's completely up to the users if you wish to do business with that gateway.  

For example, I lost faith in Mt. Gox and thus will not do business with them.  I need to know that my fiat IOU's at Gox are redeemable and as we can all see, they are not.  So it's an easy fix...stop doing business with Gox.  It's no different in Ripple.  Same common sense principles apply.  Ripple just makes this clear.  Not to mention, we don't have to wait a freaking hour for a single transaction to take place.