Topic: Why Ripple™ is against everything Bitcoin - page 9. (Read 45561 times)

Most important, people should know.

I think this is the key. People are evaluating Ripple as if it is a new currency when in reality it's just a new accounting system.

An accounting system by itself doesn't do anything; Ripple can be most useful as a way for people to benefit from their existing business and trust relationships in a new way. Those that do not have either of those things already are not going to magically gain them just because Ripple exists.

This is not a problem if the amounts you grant in trust aren't excessive (that is you can afford to lose them) and if you only grant trust to people you trust in the real world. Gateways are just special users that are trusted by many people, like banks. Well, not many people here might trust banks and I would argue they should trust gateways even less.

Within Ripple, whenever you trade anything besides XRP, you have counterpart risk and vice versa. This is because Ripple can only do bookkeeping, and the "official ledgers" for fiat currencies are not stored in the Ripple system. This would be an argument for using XRP. On the other hand, you don't have exchange rate risk if you are trading in fiat.

For fiat payments, Ripple is "just" a distributed system for keeping track of who owes what to whom.

For example, if A trusts B for $10 and B trusts C for $10, then C could pay A through B. C's balance with B would be decreased by $10, meaning that C now owes B $10 more than before, or B owes C $10 less than before. Simultaneously B's balance with A would also be decreased by $10.

Assuming all balances started at zero, A would now be owed $10 by B instead of by C, which is an improvement because he didn't trust C, but does trust B. Similarly, C now owes $10 to B, which is also an improvement, because C can now expect shipment of whatever goods he was promised because A does trust B. B's total balance hasn't changed, because previously he had two zero balances, whereas now he has one for +$10 with C and one for -$10 with A. For B this is not immediately an advantage, because he doesn't gain from the transaction but does have to do work for it. However, in practice you would expect B to be on either end of some transactions too, and then someone would return him the favour.

All three parties will want to settle the open amounts to take care of the credit risk. They could do so immediately, or they could wait a while until more transactions have passed through the network and have partially canceled out. This would mean less work.

You lost your coins. Yes, they are only good as your issuer, hence why it's not as good as bitcoin, or heck, USD.

With Bitcoin, 1 BTC is 1 BTC. They're accepted in every BTC accepting site.

With USD, 1 USD is 1 USD. They're accepted in every USD accepting site.

With Ripple, 1 BTC-Bitstamp is 1 BTC-Bitstamp. You lose them when Bitstamp [gets hacked | by owners | raided by DHS].

what i dont get about ripple is when some one doesn't want to pay up...then what, and they were your trusted gate way...

am I understanding it correctly that you need to find another buyer for your XRP and thus need liquidity....but then the way I see it at the moment is you btc's/xrp's are only good with the issuer...eg bitstamp


this stuff makes your head spin!!!

The issue is:

1) without liquidity providers, the ripple IOU market will be very illiquid and sending IOUs will be very difficult to find paths
2) with liquidity providers, it is impossible for an algorithm to calculate the value of something, even with advanced contracts. everything has a different value to everyone depending on circumstances
3) with liquidity providers but allowing to user to specify the value, it's going to require too much micromanagement, and the default settings will still lead to either 1 or 2.

I think it is going to be a long time before Ripple will be used for real loans, if at all. I think the interesting use case is small reciprocal lines of trade credit with trusted associates in order to facilitate cash payments over a P2P network. This would provide us with liquid, (almost?) irrepressable distributed exchanges between fiat and crypto, which would only require small, secret and periodic cash settlements between trusted associates.

Thanks, now please answer my questions.

I think I answered these the last time you asked them: https://bitcointalksearch.org/topic/m.2131884

At least it is better illustrated.

I shudder. 4chan introduced me to ripple.
Tell me it isnt a scam again. I dare you.
On the bright side, it might assist some folks in making use of their obsolete USD. I hope.

LOL - Light reading compared to this thread.

In theory you should be able to review the 30 pages of this thread and get some answers to some of your points.
Alternatively, you might find the Voynich Manuscript a less opaque subject.

The first sentence on the ripple.com "Send money in dollars, euros, yen or Bitcoin. No added work or fees for foreign transactions." However how this works in practice is pretty much unexplained in the ripple.com or at least I could not find it.

Could someone write or draw a complete explanation how the currency exchange feature works. Lets say Alice is newcomer to ripple but she has yen bills in her pocket and wants to buy a computer from a webshop that wants to see no other currency than USD but has previously done business with a ripple gateway.

The explanation should cover the issues that what is the full set of what ripple-introduced currencies or IOUs are possible to be involved in the process and what choices Alice has to herself how to use the system?

The wiki does not clearly explain what are all the places that have any significance where XRP is used and for what? I heard from someplace that it funds all OpenCoin functions generously, but wiki says OpenCoin only gives them away for free and the only place they are ever used in the whole system is for silly small transaction costs. Somehow I don't think I understand. The same for various IOUs? Does the distributed ledger track all various IOUs or only XRPs? What is a role of user-IOUs? Do such things exist in the system?

What happens to the external currencies? Where does the yen bill end up to? Where do the dollar bills to the merchant come from? How does the gateway business operate in typical moneyflow? I mean what is the typical business of how a gateway connected to a very big merchant operate? How does some gateway that refuses to serve any merchants and only accepts ordinary people that typically want to deposit their paycheck in dollars to buy stuff from some outside rippleshop operate as money-flow in all different kinds of currencies/IOUs that a gateway should handle? For simplicity you could assume only one type of fiat money accepted per each gateway.

What exchange rates are used in each step? What mechanism sets them and where?
Where and by whom is what XRP is worth in dollars determined? How much is an 1USD-BobsGatewayIOU worth in dollars? Where do the gateways get their profit or cover their expenses fulfilling the promise on the first sentence of ripple.com that there are no fees.

What is the complete list of parties that Alice must trust in this example one transaction? Who are the parties that the webshop needs to trust? Who are the parties that either gateway needs to trust? I mean for example which entities could leave Alice with a headache if they do some oddity including suddenly disappearing or claiming they have been hacked and lost all data and funds to thieves? What information Alice has to make judgement about these entities? Is it expected and typical that people are able to make sound decisions based on that amount of information? The answer could include examples from bitcoin-world. Which entities in bitcoin-world are such that there is enough information some random person is able to make an informed decision on and just not guesswork that they seem to have operated for a whole year meaning they must be good? What improvements are planned for ripple? OpenCoin could be in a position to force a minimum standard to all players. For example information about are the gateways financially healthy? Has a gateway been recently sold to a price that is a fraction of the user funds they are storing to some strange person nobody has heard of increasing the chance they are soon experiencing a declaration of a hack and loss of the funds?

These from just the top of my head. I did try to find answers to these but no success so far.

They're actually a group.

Pathetic scammer gtfo

Here is the code, for that signature. Which I will gladly sponsor.