Topic: Theymos: What the fuck is up with BFL and TradeFortress? - page 4. (Read 14360 times)

But then liquidity would be lowered on ripple and "it's the core point about ripple" and blah blah.


That's like asking the Federal Reserve to stop printing money for the bankers and actually distribute it to everyday people. Sorry, no, you don't have contacts within opencoin inc.

Also, why not reward the people providing liquidity with XRP as a transfer fee to offset some of the risk?

Why not have different levels of trust? Like say I have Mt.Gox and Bitstamp on my first tier, and I consider those equal value and provide liquidity for them. And then tier two could be my immediate family/friends I trust. And then lower tiers for other more risky people/gateways such as TradeFortress.

Is the system not compatible with this arrangement?

Let me be clear on what IS automatic - and shouldn't be.

I trust TF for 100 BTC - NOT automatic.
I trust Bitstamp for 100 BTC - NOT automatic.
Anyone else who trusts both can swap IOUs to me from one of TF/Bitstamp to the other - IS automatic and shouldn't be.


I explained this before.

Even aside from the issue of someone you WON'T repay there's the simple FACT that debts from different sources are often worth different amounts.  That depends not just on the degree of trustworthyness of the debtor - but also (and vitally) on the repayment terms of the IOUS.

Given counterparties who you trust equally, a debt of 1 BTC from one with a promise to redeem on request is, beyond doubt, worth more than a debt of 1 BTC from someone who promises to repay it in a year.  If I accepted IOUs for both debts then I'd (obviously) have built in a bigger markup when accepting the debt from the person who wasn't going to settle for a year.  Issuing a fixed-value IOU in return for a smaller amount of cash NOW is entirely reasonable.

Now ripple does NOT allow attachment of settlement terms to debts.  That leaves two alternatives:

1.  Settlement terms need to be agreed off-ripple.  This is what I assumed to be the case - and is why it is HORRIBLE for debts in the same currency to be considered of equal value.  The settlement terms define the value far more than the face value.
2.  All ripple BTC are to be immediately redeemable for 'real' BTC.  If this was the intent then the system is fucked beyond all belief - as there's not even a token effort to ensure issuers are even aware of that requirement, let alone comply with it.

Believing all debt in the same currency has the same value so long as the issuer intends to repay is just terribly naive and totally ignorant.  That the system not only treats them as equal value but offers no way to do otherwise is a huge flaw (yes - I'm aware there's apparently a way for the inner circle or maybe it's just a planned future way, but in a closed-source project that's not much use to everyone else).

If you believe someone won't repay then their IOUs have the same value as an IOU with no settlement terms : you can have no reasonable expectation of ever being repaid.  The lack of any settlement terms being propagated through ripple is a serious issue if the intent is to ever have debt being widely traded : even if users get the ability to price different debt they'll lack the information needed to do so.  That limits the usefulness of ripple to only debt issued by gateways that pass some quality control - which aside from being a limiting factor also means it has to remain centralised (if every man and his dog can create gateways and issue IOUs with no settlement terms then how do users decide which is trustworthy?).

There is the problem. You are forced to TRUST another party. Counter-party risk. No thanks.

WE have this with the existing federal reserve system. May as well use that.

Posts from two people, yeah.

It's really worthless continuing to have this discussion for you, because you are delusional about Ripple.

That post is mostly laughable, he does not seem to understand what he's talking about, and even if he does, I think a good case can be made that the flaws he perceives are not so.

For more discussion along those lines, see the posts in:

http://www.reddit.com/r/ripplers/comments/1f4jcy/ripple_the_definitive_discussion/

TF, i thought i was in you ignorelist, and i was pretty proud of it.
By the way, i won't answer your question as you refused to answer mine.

Your logic is flawed, you are obsessed by Ripple, I don't know why and i'm not interested in.

There are a lot of other methods to explain what you think is a problematic feature of Ripple, you could have done it with fake currencies, for example; but you preferred to put at risk the money of people who trusted YOU, not Ripple. Risking theyr money, and reputation of this forum and cryptocurrencies at all.
You really deserve a scam tag and i am very disappointed of the admins, which must be your good friends to let you act like that.

Then RIPple is totally broken. http://polimedia.us/trilema/2013/ripple-the-definitive-discussion/

This feature is exactly the whole point of Ripple.  Congrats for missing the core point - that only YOU can ensure that one IOU is one IOU is one IOU, and that the only way to do so is by having nurturing mutual trust, something that you have not shown a willingness to do.

I'm kinda curious what Ripple looks like without this feature. For two reasons. First, the OpenCoin guys don't seem like they get the fact that it's broken.. are they forced to defend it because Ripple is useless without this feature? Second, as a trader I obviously think it would be useful to trade Mtgox USDs for Bitstamp USDs, which doesn't rely on the broken feature. Can I just have that part?

LOL no, that's not a good feature, there has already being PAGES of discussions on why it's a bad idea.

Let's say a FDIC insured gateway pays 1% APR interest on your fiat. You can't trust anyone else, otherwise you would lose interest as obviously this is worth more than another dollar. Not all debt are equal in value.

Also, what you are saying is a contradiction, if people only trust few gateways the debt will not 'ripple' through the network. That only happens if people trust a lot. So, what do you mean again?

qxzn, you're right, but you watch the system from a trader perspective, and, for advanced users, there actually is a way to distinguish between different IOUs and trade them.

But a simply consumer should only be able to pay someone through a gateway (or many) which he believes to be trustworthy.
The problem is that this feature, in my opinion, is a strong point of Ripple, because it allows money to "ripple" through users and find a pathway to anyone you want to give your IOUs, in whatever currency you want.

A good example would be the Brazilian exchange which had a ~25% arbitrage profit. Guess what, 'hacked' a few days later.

Y'all are arguing semantics. The key point here is that, by default (and it's not adjustable in the UI), when you trust two gateways for the same currency, Ripple assumes that means you are willing to trade one for the other. This is broken. If I trust mtgox for 1000 USD and bitstamp for 1000 USD, it doesn't mean I'm willing to trade mtgox USDs for bitstamp USDs at a 1:1 ratio.

The fact that the OpenCoin guys continue to claim this is a good idea demonstrates that they have no idea how risk works.

Why do you think the price of bitcoin over the last couple of weeks between Bitstamp and Mtgox had a multiple-percentage spread? Understand this, and you'll understand why present-day Ripple is broken.

Ripple might still survive and be useful one day, but not until this is fixed.

Deprived, whether you like it or not, but it isn't automatic, they actually told Ripple to consider the two as equal in value by trusting TradeFortress.


exactly. He can't. Why should you trust someone for 1 USD if you know he's not going to repay that USD?

No - he did NOT tell them to do that.  And they didn't tell  ripple to consider the two as equal in value.

Ripple AUTOMATICALLY considers them as equal in value without any such request being made.  That's the problem - a shame you can't see it or won't accept or won't admit it.  Not only does ripple immediately consider them as being equal in value it also (without being asked to - and with no way to prevent it unless in the inner-circle) allows others to exchange your holdings of one for holdings of the other.

TF didn't explain to users the ramifications of extending trust.  But he didn't tell them to do anything to cause a change in the default behaviour of ripple.  As it stands ripple FORCES worthless BTC-denominated debt to be treated as equal value to redeemable BTC-denominated debt.

Or maybe you'd like to explain how a ripple user COULD extend trust to TF and NOT be forced by the software to accept his debt in return for other BTC debt?

I acknowledge you are taking the trust problem to another, "distributed" level, but I see too many negative incentives in extending lines of trust and exploiting its vulnerabilities, and this degrades the economy.

And honestly, introducing your own 100% premined crypto is the cherry on the cake. Sometimes Im amazed to see so many newbies praising Ripple, I wonder if they understood a) which problems Bitcoin was designed to solve and b) why it works.

More BS from OpenCoin about how ripple "benefits" Bitcoin, more at 11.

Except you get to choose precisely who you trust. In the conventional financial system, you have no such option and are pretty much stuck with your local currency and your local financial institutions.

Yeah, the problem is how we get from here to there. Ripple is like a bridge in that way. For example, one huge problem is the lack of systems that support hard fiat, particularly in the United States. Ripple can solve that.