

Ripple - open source peer-to-peer payment system - tfaruq
https://ripple.com/wiki/Main_Page

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relix
It looks like it's basically Bitcoin but without the mining. An interesting
concept for sure.

If I understand it correctly: By paying a gateway, you get "ripples" in the
form of an IOU (The gateway owes you). This IOU can be exchanged at any other
gateway back to money. Meanwhile, your money is inside the system and you can
send it to other people in the system.

There's no inherent value to ripples, there's no money being created or lost.
It's just a means to transfer money around.

Am I right that gateways need to be trusted though? Can they accept e.g. $1000
dollar, give out gateway IOU's, and never return the money to anyone?

~~~
yebyen
I think that is the idea.

While bitcoins have "innate" value in the form of exchange value (not so
innate as it is actually fungible), the ripple is a new form of this without
any exchanges that I know of.

I would not take a ripple as payment for services, without a corresponding
contract that identified the sender as lendee, and terms for payment where
they would accept the ripples back over time in exchange for the contract
value.

In other words, we start by agreeing on the value of the ripples (you have
plenty, and you send me some in lieu of full payment), and if I trade them
away before you can repay me, you could think of it as your debt having been
assumed by a third party. I would keep them until you paid me back instead, so
I could send them back as a record of the debt being discharged.

Why one would want to do any of this instead of just writing a regular IOU is
an exercise for the reader. I guess it's something like a 'mixing service.'
They could have trade value one day.

