Topic: You guys gonna become paranoid about Ripple - page 8. (Read 18652 times)

The XRPs allow you to pay transaction fees. The idea is simply that they're not available in infinite supply so someone who wishes to clog the network with meaningless transactions (say moving IOUs back and forth between accounts they control) won't be able to congest the network forever. In periods of transaction overload, the Ripple network raises the required transaction fee, essentially auctioning off the available transaction slots. If an attacker wants to keep your transaction locked out, he must put more XRP behind each of his clogging spam transactions than you are willing to put behind your one important transaction.

Transaction fees are destroyed. XRP are used for transaction fees because they're the only currency Ripple can manage at the network level without requiring a central authority to hold or destroy them and with no risk that an attacker can put himself on both sides of the transaction fee payment.

Currently, the normal transaction fee in Ripple is set to 100,000 transactions to the XRP. (Just like in Bitcoin though, individual nodes can refuse to relay a transaction if they think the fee is too low or they are locally overloaded.)

XRP aren't really an altcoin   But I think it's the XRP which is the most confusing aspect of Ripple.  I get everything else so far, but I don't know what I'm doing with these ripples exactly--isn't that what the IOU's are for?

XRP are irrelevant.. hence why i never mentioned it. I got enough for a lifetime of Rippling.. why would I pay more than 1 satoshi for them?

My problem is the way in which XRPs are being distributed. I greatly prefer BTC's method of monetary expansion.

• Ripple is a settlement protocol
  
  Bob is my friend.  I have granted him $1 trust in Ripple.
  
  He can utilise this in two ways..
  1. I could sell him an apple and he sends me $1 ripple IOU.  He now owes me $1.
  2. Or maybe he ripples $1 from me, through him to someone else, he now owes me $1.
  
  I would know about the first one because something in the real world was exchanged and the ripple balance went to me. I might not know about #2 immediately but either way the result is the same.  Eventually Bob would pay back the debt at some later date.  At the end of the day ripple is just a settlement protocol, you owe, then you settle the debt back to zero.  You cant owe too much because peoples trust is not unlimited.
  
  Edit: Even if Bob never pays you back in Ripple, when the time comes where you have to pay him, you just say, i'll take it off your tab.. and send him back his IOU.
  
  
• We all need trust
  
  Trust is an integral part of advanced human society, you cannot survive without trust.  You trust your job pays your salary each month, you trust that the shop you ordered something from actually delivers, or that the item in the box is as it claims, or that the shop will refund the item if it doesn't. You have to trust other drivers to obey the road rules, you have to trust farmers have grown their food responsibly, you have to trust governments to do the right thing.  You have to trust your family will look after you in times of need.  
  
  Without trust you are on your own, I spose you could live in a cave with your own vege patch, pray that there is no natural disaster that destroys your water/food supply, cause you cant trust anyone else's food!
  
  We trust a million different things each day to operate as an advanced society.. Even Bitcoin has huge amounts of trust, we trust that the developers are honest with the software, and that the code reviewers are honest about their reviews, that the OpenSSL libraries have not been updated to created private keys that dont have a master key back door.  We cant check every part of everything all the time, there's just not enough time in the day.
  
  
• Bitcoin exchanges are gateways
  
  If you've ever used a Bitcoin exchange before then you are already using a Ripple style gateway.  They simply hold your balance (or at least say they do) and allow you to do your trades and cash out.  You have to trust that the exchange will honour their IOU to you at some point.
  
  Ripple will standardize the way gateways, banks, exchanges etc represent a balance (in the Ripple system), it will be a standardized protocol for settlements that is not run by any one organization, and will be free and open for anyone to use once they publish the source.  I trust they will publish the source, and if they dont, I wont use it.
  

I cant see anything wrong with Ripple, it compliments Bitcoin nicely, its another powerful tool to help take control of our own finances.  I'm quite surprised how many Bitcoiners have poo-poo'd the idea.

At the end of the day, Bitcoin spreads the money/debt risk over everyone who uses/holds it, where as Ripple focuses the risk on only those who you have trusted.  For short term, fiat money transfer, exchange (mtgox, bitstamp) deposits use Ripple, for long term savings use Bitcoin.

exactly

Actually, the comparison between these risks is not as simple as you make it seem, especially because you have to take into account not just the probability of the risk occurring but also the magnitude of the damage if it does. But all I was doing was disputing the claim that Bitcoin is zero risk.

I certainly agree that if you want to pay Bitcoins to someone who wants to accept Bitcoins, there isn't much of a reason to use Ripple to do it.

Streamlining and simplifying is critical to mass adoption, I agree. Bitcoin has had similar problems in the past, made great strides towards improving, and I think it has made a large difference.

:-) It will take me 10 min to teach him what is Bitcoin and how to withdrawn his money I'm sending (then 1 hour until transaction is confirmed 6 times). ... try this with Ripple:-) ... impossible

You really shouldn't be extending Ripple trust to your friends unless you've got real good friends. Social relationships and banking relationships don't often work together very well. To use Ripple, you probably want to have an account at a single gateway, and trust only that gateway. Your Ripple balance with them is like a bank account balance – they owe you money, but you have a "withdraw on demand" agreement with them, so you can turn that balance into "real" money whenever you want.

And you can't send money with zero risk with Bitcoin. There's no counterparty risk, but there's a huge exchange rate risk. Ripple lets you do Bitcoin-like transactions denominated in whatever currency you like, and the cost of that is letting a third party hold some of your money for a while. If you can't trust anybody at all, you can't use Ripple.

You are comparing the risk of a 51% attack with the counterparty risk?  That is insane!  A 51% attack is now pretty unlikely while someone NOT PAYING (counterparty risk) is a huge risk.  People fail on debts ALL THE TIME.

I believe the point is, if your buddy isn't using Bitcoin, or you're expecting payment from a person who isn't using Bitcoin, you could use Ripple with any currency

It's not zero risk. There's a risk that a 51% attack will devalue the currency. There's a risk that a speculative bubble will collapse and devalue the currency. There's a risk that Bitcoin will collapse and leave you holding something that's worthless. These aren't high risks, of course, and it may make perfect sense to take them. But it's not zero risk.

No, that's a misunderstanding of how Ripple works. You can only lose money if someone you chose to trust betrays that trust. Other people defaulting cannot harm you.

Payment paths only exist for the instant a payment is made. After that, it's just balances between people who have chosen to trust each other.

To use a check analogy, say you pay your landlord with a $400 check. He deposits that check in his bank. Now your bank owes you $400 less and his bank owes him $400 more. So he considers you to have paid him $400. But if his bank collapses, that doesn't harm you. He chose to trust his bank and his bank accepted the check. It's only if your bank collapses that you may be out money.

You gave him a $400 check that was acceptable to a bank he chose to trust. That ends your end of the bargain. Him getting the $400 from the bank that he chose to trust is his problem. And, of course, my bank paying his bank is his bank's problem, not mine or his. If his bank agreed to accept checks from my bank, then if that goes wrong that's their problem.

You can never wind up being owed money by anyone you didn't choose to trust.

I do not understand. I can send money directly to anybody in the world using Bitcoin with ZERO risk.  Or using ripple? I'll give $10,000USD to my fiend, he give them to his friend (then 6 other I never saw)... and if one of them is cheater I have lost $10,000 USD. This is Ripple ? If somebody buy me a coffee I can give him $1M ?

EDIT: I'm sorry I do not have so trustworthy friend.

That's how we're pitching it because we think that's the use case that appeals to the most people in the short term and solves expensive, real-world problems that people actually have today. Long term, people will use it however it best serves them and that's very hard to predict.

Okay I think I got it.

Bitcoin works like gold, where the more of it you have, the richer you are.

Ripple works like fiat, where the more of it you're owed, the richer you are.

Ripple only works with Bitcoin if you're literally expecting to be owed in Bitcoin.  Otherwise, they can work perfectly separate from each other, and you can still expect dollars or baht or pounds or SteveCoins, whatever your preference is.  Is this the point of Ripple?  To unify all the world's fiat currencies, whatever they may be, into one gigantic system of IOU?

_{Oh god please say yes}

I guess I don't understand why this particular issue is so confusing. Maybe I've done a bad job of communicating.

We're pitching Ripple as a payment system where most people extend "trust" only to a gateway. People using the system this way can make and receive payments and they don't ever owe anyone anything and their friends don't ever owe them anything. We believe this is the best use for Ripple for the most people in the short term. Ripple can provide numerous advantages over conventional payment systems such as irreversible payments, high-speed confirmations, cross-currency payments, low fees, and so on.

Yes, Ripple can also be used other ways such as to extend social/community credit to friends. But we're not expecting people to actually do that to drive the system. Personally, I think long term that may become Ripple's killer application and may change the way people think about money.

I don't get the rant.

If you don't want a system to pay in any currency/commodity pair by micro-loaning money by "rippling it" through a p2p social network, that is run by a slightly shady group of people who premined the coins and don't really know how to work the public or make their operation not seem shady - don't do it.

Easy as that.

Does this thread exist so JoelKatz can personally attend to your ideological issues regarding the role of debt in modern society and in the modern socialist government/banking system? IDK, probably not, but I'm just guessing. Joel will you be his shoulder to cry on about the local bank stealing the kids' scholarship money or whatever? I get it, debt's evil. Or banks are evil. Or the expectation of government bailouts causing banks to take unrealistic risks with loan money is evil. Or something. What was the point of that again?

As for ripple, if it doesn't take off due to trust or centralization issues, someone else will come along, frankenstein the concept with other features that work better, and launch a new one. Whatever. That's how the market works.

I would like a system where I can trade any currency or commodity pair electronically through a web where I only have to trust my closest friends (btw, DUH OF COURSE YOUR FRIENDS CAN BURN YOU, the idea being that you have more options for recourse being burned by a friend vs being burned by a random stranger on the tor network. And you have more options for determining eligibility for trust in regards to a known individual rather than a random anon from the internet. But folks, feel free to continue stating the obvious. **** YAAAWWWWNNNN ****** )
Whether Ripple is able to provide a system like this that meets my standards of decentralization, open source standards, etc... is to be seen. Right now things look a little iffy in the way that they've managed public opinion and the openness of their project. And there may have been a better way to distribute coins, lol... didn't they know their current method was going to have bitcoiners screaming "PREMINE! PREMINE! STAY THE F@@@ AWAY!" I mean, come one, people, THINK about how what you're doing appears to the BTC community with their tin foil hats and ron paul bumper stickers! Audience, hello?

Maybe they're hoping for a more mainstream adoption, i.e. the facebook type people who initially ignored bitcoin will be like "Hey I'll give this ripple thing a try, their website looks real nice and the concept is hard to understand so it must be hip and ironic," and once it takes off the bitcoiners will feel obliged.
Who knows.
Like I said, I'll stay at a safe distance, see what happens, see how the Ripple team shapes things (right now looks like they got some work to do ;-)). Hopefully someone else will come along, steal the concept, and launch it the RITE WAY.

why did Jed McCaleb sell mtgox right at the wrong time? he gave away a gold mine.  oops, sorry.  a Bitcoin mine.

he says it's b/c it was for security reasons.  no.  it's b/c he didn't understand the potential of Bitcoin.

now you expect me to believe in Ripple?  especially when he and the other founders are holding back 50 Billion XRP's for themselves?

since they didn't cost you anything, you should just throw them in a drawer somewhere and forget about them for 10 years.  if they happen to go up in value then you win.  if not, no harm done.

oh wait.  if you don't circulate them, then how will they go up in value?

i have alot of clients who happen to be estate attorneys.  we often talk about their work.

of course they're biased but the universal theme is that families should have an estate plan in place.  i believe them and have one in place for my family.  when it comes down to dividing the inheritance amongst siblings all kinds of problems can crop up which can tear apart relationships.  i certainly can believe it myself as when my parents passed away, i had a sibling who kept asking/justifying for more and more b/c he was in an inferior financial situation to the rest of us.

bottom line, no matter how much you think you can trust a good friend to perform on an IOU at one point in time, there can certainly come a later point in time (IOU's have time related counterparty risk) where that trust may no longer apply due to changing circumstances.  there needs to be a well defined plan in place to mediate disputes.  and it has to be legal.