Topic: Theymos: What the fuck is up with BFL and TradeFortress? - page 2. (Read 14312 times)

Except the power weilded by xrp is an insignificant fraction of that weilded by other currency within the ripple network to the point where this power is irrelevant

The more I think about it, the more I come to the realization that this doesn't really solve anything.  Ripple is based on the hope that it will become widely adopted (i.e. enormous growth).  If all of the XRP were distributed, it would still be held by a very small fraction of the populace.  There's a bit more distribution than the current control by one major corporation but in the end, you're still talking about a very small percentage of people controlling the majority share of XRP. 

The better way to do it would be to have a controlled disbursement of XRP, similar to the creation curve in Bitcoin.  Rather than one corporation holding the lion's share of XRP or dumping all XRP to early adopters, XRP gets distributed to the user base over the course of a few decades.  This would encourage acceptance, reward early adopters, and still allow for new users to get their share of the pie.  Unfortunately, this type of distribution does not seem to be possible.  I have a feeling the creators of Ripple did not go down this road because they did not want to be seen as a Bitcoin copycat, but in doing so, I think they created a system that will be very hard for people to adopt as it is abundantly clear that unlike Satoshi, the creators of Ripple wield all of the power.

An excellent example of what inept execution means.

Brilliant, indeed.

Distribution through a mining (or similar) system would be FAR worse than what they're currently doing.  It's about the most inefficient and restrictive way to encourage use.

Ignoring issues with the implementation of things like debt-exchange, the single biggest problem I see ripple facing is the distribution of XRP.  It has to try to solve two diametrically opposed objectives:

1.  Make XRP freely available to legitimate users.
2.  Prevent spammers, hoarders and speculators gaining large quantities of free XRP.

Achieving ONE of those objectives is easy - achieving both VERY hard without making the process of obtaining them prohibitively time-consuming and intrusive.

Mining manages to fail to meet both criteria AND is costly plus slow.  It specifically totally fails on point 1 due to restricting access to only those with appropriate hardware, the willingness to use the mining software AND the readiness to wait until they've successfully mined before using the system.  That would  leave ripple as only usable for 'free' by a small group of people - whilst what (I assume) OpenCoin want is for people unfamiliar with BTC to be able to use it just by signing up with a gateway and getting their handout of XRP (in practice the order may well be reversed - with them getting the free XRP before looking for a gateway).

In short, mining XRP would add complexity, cost and restrictions for no benefit (other than to those who wanted to mine for profit - which there's a never-ending stream of pump and dump altcoins for).

What's wrong with the current XRP system (in my view) is two things:

1.  A lack of clarity on how XRP will be distributed.  This is reminiscent of freicoin and solidcoin with their putative distribution/use of premined coins by some committee with a total lack of detail provided.  This isn't needed just for curiosity - but because without confidence that widespread distribution WILL occur it's hard to see any serious effort/money being put into development of ripple-facing applications.
2.  As mentioned in an earlier post by me, an unnecessary focus on the sale of premined and retained XRP as the source of profit for OpenCoin rather than their reward coming from adoption of ripple itself.  Yes - there's obviously some correlation between the success of the two, but also scope for a conflict of interest.  Whilst OpenCoin will claim (and may well be doing so honestly) that they're not focussed on the sale of XRP at the expense of the 'main' project they've deliberately created that potential conflict of interest.  An alternative approach (simplified) would be to premine, give out ALL the XRP but then have ones that are currently destroyed in transactions instead returned to them as a fee.  Then to make a profit they'd HAVE to get ripple adopted and widely used.

Joel,

One source of uncertainty about ripple's future is in XRP concentration, what would give the power over its value to few people, as long as its value will be determined by offer and demand and not by an intrinsic value.

People (including myself) can't resist thinking XRP as a crypto-currency better than credit to use the network. It moves faster than BTC and is apparently safe. If XRP becomes liquid and accepted by real business it will gain currency properties. But, if it happens, can you imagine the fear and uncertainty about holding big amounts of a currency that is 50% held by a private company?

Even if XRP was not planned to be a currency and you intended to sell XRP for those who want to use the ripple network, as a source of revenues, people would turn it into a currency, because it is the fuel for the network.

So, IMO the system will be very useful for all currencies, but the safety for XRP holders and the success for it as a currency is in the hands of Opencoin and depends or its decisions. The more XRP is distributed, the more safe and steady and not subjected to gossip it will be.

I'm not sure what that would be. If you want me to imagine they come up with some perfect way to do it and then ask me if the perfect way is better, then yes, the imaginary perfect way will be better.

I'm sure there will be such a spinoff, perhaps several. I'm not afraid of competition. We did things the way we did it because we genuinely believed that was the best way. If we were wrong, then the better way will win. I will not be terribly upset if the concept wins even if the company doesn't. There are millions of ways to fail and those are among the best.

If we had been able to think of a better way to do it, we would have done it that better way. If other people can think of a better way than we did, then they deserve to win and we deserve to lose.

I'm serious -- we did things the way we did because that was what we believed was best. Not just for us, for everyone. If we were wrong, then so be it.

I did not say mining - I said a mining-like process. You are going to hold on a high % of the total XRP supply (I've read 20% on some posts, up to 50% on some others). How about a spinoff in which 100% of the Ripples are distributed?

Didn't you think about possible clones that would change only the "premine" thing?

It seems like an absurd waste of electricity to me. Mining in Bitcoin is essentially paying people to solve the double-spend problem, rewarding them for providing a useful service. Mining in a system that doesn't require proof of work to secure it is pure waste. It is as silly as Opencoin having an XRP giveaway to whoever wastes the most electricity.

And, again, if we fail because we inspire something that people like better, that's probably the best possible way to fail. But I think that's one of the worst ideas for a Ripple spinoff.

Joel, what's your position regarding a Ripple clone in which XRP's are 100% distributed, perhaps through a mining-like process?

I guess that could happen as soon as you release the source code, and I assume you have already thought about that possibility.

That's a large part of the reason we designed it so that we wouldn't be running it. Ultimately, we think it's adoption of Ripple as a payment network that will drive demand for XRP. We're willing to take the risk that we're wrong on that, as we've taken so many other risks. If we fail because Ripple is successful as a payment network and demand for XRP just doesn't arise, well, of all the many ways we could fail, that's not too bad. Our primary strategy is to remove every possible drag on adoption of Ripple as a payment network and do everything we can to drive adoption.

We don't think so. We think long term that driving adoption is the right strategy both for growth of the payment network and for eventual value for XRP.

We don't care about the value of XRP over that short a term. If people are forced to buy XRP, some people won't adopt Ripple because of that. Our success strategy is exponential growth for many years. Sacrificing growth now for a short term boost in the price of XRP would be foolish.

Think you accidentally said the truth there - whilst trying to be sarcastic.

Apple's primary objective is to make profit for their shareholders - building iphones etc is what they do to do that.  Their shares reflect their success in that.

With OpenCoin the value of XRP reflects how well they're doing - as they've defined that as the means by which they'll extract profit from ripple.  Increasing the value of XRP is thus their primary objective (as the means by which they'll make profit).  I have no problem at all with a for-profit organisation trying to make money.  What's unfortunate is that tieing their profit to XRP rather than to the success of ripple itself (and the two are NOT necessarily the same) leads to the situation where the decision of whether to implement a change that makes the platform stronger but lowers the price of XRP becomes a difficult one for them.  

Life would be far simpler if they'd picked a profit-making strategy that rewarded them based on the success of otherwise of ripple (XRP can succeed or fail as a currency in its own right largely independently of how well ripple as a whole succeeds).  But then they wouldn't be able to make a decent profit if ripple itself never really takes off.  So now when deciding how to distribute XRP they can no longer focus on what the most efficient methods are - but have to factor in (to a very significant extent) the likely impact of any particular distribution method on their ability to get cash out of XRP.  That specifically means making distribution inefficient so that some people are forced to buy XRP.  Every legitimate user getting enough free XRP to use ripple would be ideal for ripple - but a total disaster for OpenCoin.  And that's the conflict of interest they've created for themselves.  The distribution of XRP is, in any event. the big unsolved problem with using it as spam-prevention - my money is very much on it mainly stopping legitimate users : attackers have other vectors and those wanting to use transactions for information aren't likely to be priced out of it.

Except it still doesn't do anything. So yeah, adding a scam to a dysfunctional system resulted in a lot of shills being advanced some quarters and doing their thing, on obscure blogspot blogs and on obscure bitcointalk accounts.

A great success indeed, call the freakshow VCs, the coin* failure shall be nothing compared.

But, as you must know, while it works fine it is incomplete and *they are finishing the job*.  XRP, with all its sketchy properties looks like it was the key to their being able to do so.

Apple building iphones and macbooks is just a necessary evil to make APL shares have some semblance of use/value.

Yes, that is called "Ripple" before OpenCoin Inc bought it and turned it into a venture for their new cryptocurrency. It exists, it works fine, and there's no XRPs or transaction fees.

I agree partially. XRP will be part of Opencoin profit. It will be in fact a currency or, if it fails, people will have to buy it from Opencoin to use their system.
But it has its charm. The system depends on the gateways to work, and the liquidity will rise following the number of existing gateways. When there are enough of them people will actually be able to send FIAT currency globally, trough a worldwide compensation system, XRP being or not a currency.

Actually there's two seperate things being discussed in the IRC conversation which MP conflated.

namworld was talking about selling XRPs to someone else.  That has nothing to do with IOUs - XRPs are an alt-currency and there are people who are DELIBERATELY buying them despite them being given away free.  namworld sold his free XRPs to someone for a few BTC - that person wanted to buy XRPs, knew they were buying XRPs and there's no flaw in ripple involved or misunderstanding by either party (of what was being traded).

This topic and the flaws in ripple are entirely seperate and have nothing to do with XRP as a currency in its own right or people voluntarily exchanging BTC for them.

No.

The person wasn't given any XRP.  The only movement of XRP that occurred in the process was the destruction of a tiny amount. 

XRP is entirely seperate to the conversion of debt from one issuer to another (other than some being destroyed during transactions).  The only time XRP gets exchanged for a different currency is if two parties intentionally exchange it - which DOES require both parties to agree to a change in the currency they hold (though they can't necessarily control the issuer from whom the currency comes if they have more than one line of trust open in the currency).

XRP, in general, is seperate from the IOU system - it exists alongside it as an 'actual' currency like Bitcoin.  It's official purpose is to be used to prevent spam by anyone creating a transaction having to destroy some.

BTCs/yuan/USD/whatever in ripple, on the hand, can be created from nothing by anyone (as IOUs) - with ripple treating them as of equal value to ones of the same denomination created by anyone else.

This is a common area of confusion with ripple (IOUs/XRP) - in part because the official function of ripple is rippling IOUs but the only part that works properly/is easily usable is XRPs.  So all the talk/trading is of XRPs despite them being officially just a minor feature to control spamming (in reality the main aim of OpenCoin is to extract value from the 1 billion XRPs they printed - the IOU trading etc is just a necessary evil for them in making the XRPs have some semblance of use/value).

In practical terms: the person was given some XRP, the person took out some BTC. At some point somewhere there existed a conversion of XRP for BTC, via the IOU system.


Well thank you for that. Passed this along, we all got to enjoy one of those rare "holy shit!" MP faces. Apparently that's what he meant to say. Thanks!


Quoting this mostly so it doesn't get as quickly covered by the prattle of idiocy.