Topic: Why Ripple has failed. - page 3. (Read 10936 times)

We definitely wouldn't want to do that because that would make us more of a central authority than we ever want to be. But perhaps a way to have your wallet provider be able to recover your secret wouldn't be a bad idea. We could make it opt in. Ideally, we wouldn't want your wallet provider to be able to do it alone, but if there's something you have to give them for them to be able to recover, then if you lose that you're again cut off from your account.

Thanks for the response
1. A way to retrieve your account from ripple would be a good thing, I can contact a bank and get account access, I can contact an exchange and get account access but I cannot do this with the ripple wallet. If there was a worst case scenario and if I lost everything I would like another way to retrieve the account.

2. Giveaway idea easy, just give it away, people will be more likely to try something new if it is easy like post your wallet address and boom there it is. The rest of the community does not feel ostracized either.

Sorry to hear about that. Our wallet scheme has been improved significantly since then, but it is still a bit non-intuitive. One thing I should emphasize -- the client strongly urges you to write down your account secret. (It's a string the client generates that starts with an "s".) So long as you have that secret (and nobody else does), your funds are safe. You can always create a new wallet with the same secret.

Also, if you have any suggestions for better giveaways, we'd love to hear them.

ripple has failed ages ago

My Ripple story


1. Created wallet, then unable to login.

2. Create new wallet same username, made sure to write down password

3. Going great, got a giveaway 1000XRP

4. Password no longer works, I had written the password down and used it before

5. Create wallet again, same username no more XRP all lost

6. Contact the Ripple team, no response for weeks

7. Advised by Ripple team nothing they can do

8. Wait for next giveaway, all giveaways for US bank account only and jump through hoops to obtain

9. Still no XRP

10. Another giveaway only for US bank accounts and jump through hoops to get it. (http://us7.campaign-archive2.com/?u=97b8ad365e32a6560b749f60c&id=402e387e6c&e=c3961035c9)

11. From the first day, months ago that I saw ripple, I have tried to work out how to trade it, it still is confusing and the most difficult to trade.


Hope no-one else has been through all this

I'm pointing out that, based on Quantplus's criteria, bitcoin also could have been considered a failure when it was at a similar stage of development.

You are aware that (I) this is an anecdote (ii) Bitcoin's history was exceptional and (iii) Occam's razor points to a different conclusion?

http://www.bitcoincharts.com/charts/mtgoxUSD#czsg2010-09-01zeg2011-03-01ztgSzm1g10zm2g25zvzcvzl

Bitcoin had similar volume when it was new, severely undervalued, and not really ready for mainstream use.

Edit:

Also, at the the time, bitcoins were traded mostly on Mt.Gox (Magic the Gathering Online Exchange) and you were considered foolish if you actually thought it was a good idea to buy them.

We're not claiming Ripple is "more secure" than conventional payment systems.

We have yet to see a case where someone had a balance decrease when they didn't either place an offer or sign a transaction to authorize that decrease. If that ever happened, everyone would know it because balances are public and transactions are public. I definitely agree that protecting the private keys used to sign transactions is a huge issue for any crypto-currency system. We've been working on improving the way we do that, but I agree that there's lots more work to be done. This is a huge issue for both Bitcoin, Ripple, and pretty much any other decentralized crypo-currency system that gives people access to irreversible payments.

Keep flogging that Silly Straw Man, baby.

In decades of banking and trading in Canada and USA well into 7 figures...
I have not lost a single penny... or lost any sleep over the security of my assets.

Meanwhile, people whose money disappears on Ripple are writing Github tickets...
And being told they had "bad passwords". What fun.

https://ripplecharts.com/markets

Looking at the stats there has been no progress since May...
It's Bitstamp and nothing else...
Your big US Gateway is doing $2,300 is business/day.

Open sourcing without achieving anything close to "critical mass"...
Seems like a desperate move to save the Network to Nowhere.   

That's pretty much the only way to provide an electronic payment system for fiat currencies. Ripple is "less broken" than existing payment systems for fiat currencies because users can exchange balances with each other without needing the permission of any central authority.

Woot. Mission accomplished.

OutputQuality is a dead end, but if "tfSetNoRipple" makes it so "your IOU's will never be implicitly exchanged", then that could definitely be a fix, but as vinniefalco (aka MrBiggs) says, this aligns with the "new Ripple" and doesn't mesh with the idealist fantasy that was the original Ripple, which is what my OP was all about.

I had virtually no respect for Vinnie until I read that conversation, thanks for pointing that out.

Well then the majority of Ripplers are wrong.

I agree, but the problem with the way Ripple exists now is that they take the risk unknowingly.

Edit: And I also don't like calling it a risk. Accumulating less valuable IOU's in Ripple in which Liquidity Providers exist is about as risky as getting wet by being thrown into the Atlantic.

So if I get you correctly, your reasoning is that 1:1 "rippling" of IOUs (e.g. I trust A.BTC and B.BTC and can end up with either of them) is bad, since one would better need to make an explicit market order to trade IOUs than to implicitly exchange them.

I fully agree on this, this is also the most discussed bug report in the ripple client about this issue (https://github.com/ripple/ripple-client/issues/748). Ripple in its classic idea (everybody is a gateway) would probably die out if this was not enforced or change (evolve?) to its current state where IOU issuers are relatively rare and realtively well known and established entities.

There are remedies against that though:
Partially: setting OutputQuality to something else than 1:1 and keeping a low balance to limit potential losses and earn a small fee in the mean time - doesn't protect against catastrophic failures.
Fully: setting the tfSetNoRipple flag on your trust lines (https://ripple.com/wiki/Transactions#TrustSet_.2820.29) so your IOUs will never be implicitly exchanged. You can still act as liquidity provider, but only via explicit market orders, not implicit trust line rippling. As this is already possible for quite some time, and only VERY few people use this possibility, there is either the option that it is too complex to do this (one could fork a "no-rippling" client though) or that the majority of Ripplers actually disagree with you on this threat.

Anyways, as I said, it is possible to use Ripple without this for yourself - and if others take that risk knowingly, it is their problem frankly.

The reason there could be fluctuations in value absent any external pressures is because value is subjective, and people have preferences that change from day to day.


I do enjoy your criticisms Sukrim, you are a very reasonable person. You may have thought I slunked off because my argument was defeated and I was trying to save face. Alas, I do not have such self respect, and also I'm not wrong. I was just distracted by the craziness over at Just-Dice, and learned several terms I'd never even heard before; Variance and Kelly criterion. Good times.

So your counter argument, you'll correct me if I'm wrong, is that users in ripple all have contracts with the Gateways that distribute the IOU's that users trade among themselves. Therefore, there is no contractual, or calculation problem because the users already made agreements with the Gateways that they like, and can even charge interest depending on the riskiness that they perceive in a particular Gateway.

Alright, that's cool. Again, the problem is not the relationship between a particular user and a Gateway, the problem is in between users as Liquidity Providers. I can give you two problems that can't be solved as long as Liquidity Providers exist.

The problem of changing markets.
Gateway A --> Group AB <-- Gateway B

Group AB is a group of people who all agree to transact with IOU's from A and B. They have all extended trust lines to A and B.

So far so good.

The problem arises among the relationships in Group AB. There are indeterminate trust lines extended every which way determined by the trust each person has with their immediate neighbor.

The abuse arises when something happens to Gateway B, and the network begins dumping those IOU's in exchange for Gateway A's more valuable IOU's.

Unless a user is paying extremely close attention, his account is going to accumulate less valuable IOU's without any notification to him.

In that way, the most trusting people in the system get stuck with IOU's that are less valuable.


Why does this happen?
Because the value of IOU's cannot be accurately automated along liquidity providers. As value changes, IOU's are dumped on the gullible/most trusting, who can't react fast enough.


Propagation of Inappropriate Trust
Trust in the real world is often extended irrationally. Often friends, family, and boobs garner more trust than intelligence, experience, and discipline.

For example, a businessman might trust his drinking buddy with $3, and the businessman's boss in ripple trusts the businessman for $10. The drinking buddy could borrow, through the businessman, $3 from the boss.

Notice that it doesn't matter at all that all three of them trust the Gateway (bank), that's not relevant.

These are small amounts, but when these bad debts are rampant through the system, the only solution is to either not trust anyone, or else make the trusted amounts so small that it's not too painful when the inevitable defaults occur.

If the argument to fix this is to reduce the trust lines to tiny amounts and let people borrow from huge amounts of people in order to do exchanges, then as soon as the amount that can be transferred in this way reaches any substantial amount, someone is going to game the system and run with the booty.

As a result, the trust lines have to be useless in order to not be dangerous.

Note that it's true that trust lines will shrink in response to this. The businessman will probably cut trust from his drinking buddy if it becomes a problem, but that doesn't counter my point, it reinforces it. The trust lines have to be short in very small amounts, or not exist at all in order to avoid ending up trusting someone that isn't really trustworthy, because it's very hard for a casual user to extend trust lines appropriately.

Edit: Technically speaking, as Sukrim points out, you can't do this because a user can't be a Gateway. (Trying to follow all these caveats is enough to give a person a migraine.)
Suffice it to say, the problem still exists, but instead of borrowing, the drinking buddy might transfer something that is less valuable through some kind of knowledge advantage (insider or otherwise). It gets complicated...

Why does this happen?
For the same reason I lined out in the opening post. The value of IOU's is different depending on who is getting the IOU.
There is not enough information in consecutive parties to issue IOU's appropriately.

Hey, Ripple Labs is the new Fed! They and sub-banks (Gateways) issue currency / IOUs, while Ripple Labs can play Federal Reserve and set Ripple-affecting variables like account reserve requirements, trust line requirements and transaction fees!

In my view the whole concept of supporting debt/transactions through trust is majorly flawed.

Why create a system that is based on IOUs and trust?....."faith"?....."credit"?  <--- The last two words are use by the U.S. govt when making promises they can't keep based on IOUs.

We already have that type of broken system...it's called the Federal Reserve System.

Meaning you don't have to look at the numbers, the FDIC doesn't really have to have anything at all, and they still can guarantee all the deposits? So there is no risk, just because they up till now have not defaulted? So you crossed the atlantic in an armchair with party balloons, and since you made it, there were no risk at all?

Not quite. There is some discount of the value associated with the risk that the bank may default in some way. But there's also a convenience premium -- that's the reason I'm having the bank hold the money in the first place. For convenience, so long as the bank is sufficiently reliable, we "pretend" that the risk discount equals the convenience premium and value the balances at face value because that makes life easier for everyone.

It's much the same as people not weighing individual silver coins and just honoring them at face value so long as they didn't show obvious signs of tampering. If nobody else weighs coins, then you don't need to.

From what I understand, no one has ever lost a single dollar due to a bank failure, thanks to the FDIC.  Love it or hate it, consumer confidence is key and this provides exactly that.

lol