
Ripple, the First True Bitcoin Competitor - rasengan
https://www.privateinternetaccess.com/blog/2013/02/vpn-accepts-ripple-the-first-true-bitcoin-competitor/
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GoWest
I've been playing with Ripple for a couple of weeks now, and I find the best
way to describe it is as a network that will finally enable freedom of banking
over the Internet.

Sure, we all log on to our online bank accounts, but they don't really let you
take your money anywhere. Ripple will be supported by a rapidly expanding
network of Gateways that will allow you to get money from your bank account
onto the Ripple network, and from there, an unlimited number of financial
options will be available to you.

You'll be able to spend your money with any merchant with a ripple account or
with a bank account tied to a Gateway. You'll be able to exchange your
currency for USD/EUR/CAD/GBP/JPY/BTC/whatever you want.

We'll finally be done with the archaic ACH network. $50 bank wire fees and 3%
currency conversion fees will cease to exist. We have an Internet, why not use
it to move money?

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speeder
So, ripple authors keep 20% of it all. That sounds kinda shady to me. Like
someone wanting to score a quick instabuck using the valuation.

~~~
oakwhiz
They could have made it a blockchain-based merged mining altcoin, then it
would be compatible with Bitcoin and far more accepted. The fact that they are
using a centralized issuance model should make you very suspicious.

~~~
networked
Do altcoins have any legitimate reason to exist? The whole "silver to
bitcoin's gold" shtick is terribly unconvincing.

~~~
nullc
They can be useful experimental platforms... also, the fundamental rules of
Bitcoin are fixed— changing how Bitcoin works could be rightfully argued as
theft from all the people who hold Bitcoin at the current moment.

If you wanted something like Bitcoin but with different properties, different
security, different inflation— an altcoin is the only way to get it.

Unfortunately, practically all altcoins have been almost identical to Bitcoin.

~~~
networked
What would be interesting deviations from the bitcoin model if breaking
compatibility wasn't an issue?

~~~
nullc
<https://en.bitcoin.it/wiki/Hardfork_Wishlist>

<https://en.bitcoin.it/wiki/User:Gmaxwell/alt_ideas>

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nullc
I don't know how anyone can call it a Bitcoin competitor.

Instead of a proof of work decentralized consensus ripple depends on a
consensus of _trusted servers_. In Bitcoin language ripple is distributed but
not decentralized.

Then multiply that out by the fact that its native currency XRP was all pre-
created and given to the founders and their org... people like to call Bitcoin
a ponzi scheme, but policies like this make me wonder if Ripple isn't a joke
designed to point out the comparative equality Bitcoin provides.

It might be more accurate to call it a paypal competitor but it retains the
Bitcoin scalability challenge of requiring global synchronization, so its
unlikely to be a great one.

~~~
JoelKatz
It is positioned to compete with other payment systems. As for scalability, it
uses data structures specifically designed for rapid synchronization. But
you're absolutely right that scaling it to thousands of transactions per
second will be a challenge.

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dfc
Is there any document that details how ripple works? Something like "Bitcoin:
A Peer-to-Peer Electronic Currency"[1]. I browsed the site and right now it
looks like a lot of individual wiki pages. Surely there is a defining
document?

[1] <http://bitcoin.org/bitcoin.pdf>

~~~
DennisP
I got these from someone on reddit:
<http://204.83.72.148/themusicgod1/doc/ripple/>

~~~
JoelKatz
Those are about Ryan Fugger's Ripple, not the new Ripple. The new Ripple does
include the peer-to-peer credit of the original Ripple. But there are major
differences. For example, the new Ripple is positioned initially as a payment
system competing with things like PayPal and checks.

~~~
utunga
snippet of email from Ryan Fugger Sep last year (2012) seems relevant

.. group would like to take over the Ripple project and call their system
"Ripple". They have offered me xx for this, which would give them ownership of
all Ripple software I've written...[and] ripplepay.com domains... I could
continue my work independently, but I would need to give it a different name.

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eof
Ripple appears to essentially be Hawala
(<http://en.wikipedia.org/wiki/Hawala>) in digital form.

I'm actually not sure of the necessity of XRP; since bitcoin, or any other
currency can propagate across the network.

~~~
wcoenen
I was surprised by XRP as well. Apparently they introduced it as an anti-DOS
mechanism, meaning that you have to destroy some XRP to do a ripple
transaction[1]. To me it would have made more sense if each of the accounts
involved in a ripple transaction could simply charge a transaction fee
nominated in the currency being transacted.

 __edit __: it seems that such transaction fees are possible[2]. Not sure why
XRP is needed then.

[1] <https://ripple.com/wiki/Ripple_credits>

[2] [http://bitcoin.stackexchange.com/questions/7590/does-
ripple-...](http://bitcoin.stackexchange.com/questions/7590/does-ripple-ever-
charge-proportional-transaction-fees)

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arcticfox
The key to the technology seems to be <https://ripple.com/wiki/Consensus>,
which is the problem Bitcoin elegantly solved. I like this solution as well.
But Bitcoin is relatively battle hardened (both theoretically and in the
field), and I trust the work I have seen done on the subject.

Is there some forum like bitcoin.stackexchange where I can ask/read
theoretical questions of Ripple?

~~~
nullc
> which is the problem Bitcoin elegantly solved. I like this solution as well.

Why do you like it? The ripple model depends on picking trusted servers which
cannot be controlled by the same party/common interests. The system cannot
automatically pick trusted servers because there is no electronic way to
determine independence, except the way that it currently works— fiat of the
developers: they hardcode the servers.

To me it seems that when encountering the fundamental problem bitcoin solved,
"How do you achieve a fair consensus when its cheap to make sibyls?" their
response was to completely punt on the issue.

~~~
JoelKatz
It's not cheap to make sibyls because you have to get people to trust you and
there's no easy way to do that.

There are simple ways to gather lists of likely independent servers. For
example, agencies you trust could publish such lists. You could pick three
such lists and only trust organizations that appear on two of them.

And if you betray that trust, it will nearly always be easily detectable in an
automated way. At that point, everyone will stop trusting you and you'll be
back at zero. By contrast, if you accumulate 51% of the mining power, there's
no easy way for people to take that away from you and make you start over.

~~~
nullc
> There are simple ways to gather lists of likely independent servers. For
> example, agencies you trust could publish such lists.

This isn't a procedure, it's a hand-wave. How do the agencies make their
lists? And why should I trust them? If I can trust the agencies, why don't I
just have them process all the transactions and then dispense with the
inefficient global consensus stuff? What happens when courts order the
agencies to direct people to processors who seize particular funds or block
particular traffic? When the agency servers are hacked?

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mtoledo
"... inventing a decentralized way to send and exchange non Ripple currencies
over its network. The latter enables two things which will truly allow Bitcoin
to flourish: 1) Most Bitcoin transactions can be done through the Ripple
network, only to be settled on the blockchain when absolutely necessary. 2)
True decentralized Bitcoin exchanges will now be possible via trading on the
Ripple network."

I still didn't quite get how does this work but the fact that the technology
enables you to do it besides the fact that it has its own currency is pretty
interesting.

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rheide
So rather than the opportunist/capitalist/democratic solution of bitcoin, we
have a benevolent dictator handing out 'money' to whoever would like to be on
the network?

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JoelKatz
You're looking at Ripple as if it were a currency rather than as what it is, a
payment system.

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glomph
FTA ' Ripple (XRP) is a new decentralized Bitcoin-like currency '

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JoelKatz
There are people who want to promote it that way, but that doesn't include the
people who designed and built it. Check out <http://ripple.com/>

~~~
nunyabuizness
But the point is that if they (XRP) come to have any monetary value at all,
the whole thing reduces to a ponzi scheme with benefits.

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Geee
How are the ripples exactly put in circulation? There's a giveaway on
bitcointalk.org, but that's it? Or people just buy them from OpenCoin?

~~~
JoelKatz
There will be giveaways of tens of billions of ripples. By the time the
giveaways end, there should be a plentiful supply.

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ElliotH
Claimed my 10,000. Why not? Not sure I see them having much value though.

