Topic: The True Explanation of Ripple for Bitcoiners - page 5. (Read 17517 times)

Profit = Motivation. Hence why scammers exist alongside businesses.

The "trust aspect" is what I would call "ad-hoc", by trying to reconciliate with the status quo, not that it's entirely unnecessary, but the established do it much better than them.(As corrupt as the banksters can be, certified financial professionals can still handle debt matters much better than one random sucker on the internet), there is no reason for people to justify the cost of transition. Other than that, I agree with you.

The network effect of transfers, and the trust aspects of it are actually pretty clever.  It has potential.

But in being clever, they ruined everything that makes Bitcoin brilliant.  Bitcoin is brilliant because it is the perfect game theory play.  It motivates everyone to use it, intrinsically.  Ripple motivates no one except OpenCoin.

"As long as my investment goes up in value, let us allow the banksters to fuck us a few times over, no big deal."? 

I see it as a bunch of ad-hoc solutions hacked together, with no brilliancy at all.

In fact, you can just modify the Bticoin code slightly to come up with something very similar to Ripple.

Now what this means is that there is an ability to trade currency IOUs with each other. However, one exchange will still have far more currency than another, and so, the IOUs should be limited if 1:1. It does not change the true bottleneck that is transferring national currency from one exchange to another on a macro scale, and so I think natural monopolies will still emerge. It's great for arbitrage though.

For example, if people wanted to switch from MtGox to Bitstamp via Ripple (if MtGox functioned within Ripple), this would of course not be possible, and so even if the valuation was 1:1 on the USD, the ratio would reflect the ratio of the USD on both exchanges. This makes sense of course if people really thought MtGox insolvent, since even 0.2 would be a good deal then.

So all in all, it's nice for price arbitrage and for taking advantage of an existing order book for IOU vs. IOU if one of its issuer goes insolvent.

@cypher; TF

Interesting, so the gateways will need even more expensive regulation to comply with than existing Bitcoin currency exchanges? That would be a massive hurdle. And of course it would make for even bigger monopolies than already exist on the Bitcoin market (MtGox). Everyone would be shut down until the first exchanger arrives that deals with all the regulatory issues.

Adding what I said in the other thread:

Ripple reminds me of Google wave.  It was neat, it had lots of potential, it was geeky, the few people who got it were really excited, and it ended up being totally worthless.

The misrepresentation of Ripple has been most annoying to me in the 1 MB max block size debates. People just say that people could just use off-chain transactions through Ripple, because Ripple complements Bitcoin. Honestly, this has been one of the greatest issues I've had with how Ripple is being marketed.

@cyperdoc: bearer instruments. Mt Gox stopped allowing generation of USD, etc codes for a reason.

misterbigg has been quoted as stating that gateways will probably need to be banks with the appropriate licensing to provide large enough trust centers to facilitate enough liquidity throughout the system.  i think he's right about this need but fear it represents points of centralization.

he's also criticized Bitcoin as not having an unlicensed bridge from BTC to fiat.  well, neither does Ripple.  but the negative consequences for Ripple are much greater.

The issue is USD.Bitstamp are bearer instruments. You can no longer trade Mt Gox IOUs for a reason.

XRPs do require trust (the ledger system is based on trust).

This is all correct.


I don't think they need a license. And anyone in any country could provide the liquidity service. You could even operate anonymously.

Ah, I see the problem of my example.

When I send currency from Bitstamp into the Ripple system, it vanishes from my Bitstamp balance and appears in Ripple. To reappear, I have to send it from Ripple to Bitstamp. Forgot about that. So, if the Ripple account balances work fine, this is not an issue.

I'll have to think about the ramifications.

Why, how is it different from the licenses required for exchanges like MtGox? Do you mean that the people who do market arbitrage via the Ripple system need such a license?

You forget that XRPs require no trust.

but but but... that breaks opencoin inc's "steal bitcoin marketshare" corporate strategy!

THINK OF THE BANKS, ERM, GATEWAYS THAT WILL BE MISSING OUT ALL THEIR 0.2% 0.5% FEES!

+1

Bearer instruments, yada yada.

once again, licensed money transmitters or banks are the only ones that are going to be allowed to perform these activities.  these are critical for the Ripple system to work.  absent that, its inferior to Bitcoin as it won't even be able to function as it depends on trust.

Not when you keep deleting responses that you don't agree with.

A proper response to this really belongs in the Other Thread. I copied my original reply.