

Ripple - P2P can cut banks out of the picture - TriinT
http://www.masternewmedia.org/news/2005/06/27/p2p_can_cut_banks_out.htm

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JimmyL
This seems like it would have a serious early-adopter problem, in that it
needs a pretty large network of people that somewhat know each other in order
for things to work. Specifically, if I join this service, I can't do anything
until someone who knows me joins, at which point we can then lend money to
each other. If a bunch of my friends join, then we have our own small complete
social graph - but we can't access the greater community until one of us is
friends with someone else who has a complete social graph that would act as
the bridge between us.

I also don't see what the incentive is for someone to join. Zopa/LendingClub
pays interest, Kiva is charitable, this is...what? And how do you get your
physical cash in and out of the system - would the service make deals with
banks (which would put them under more regulatory oversight), or...?

Lastly, this seems like it would be targeted by anti-money laundering laws
real quick. A way to transfer money electronically between people who know
each other, across trans-national boundaries with no government tracking of
the amounts in or out...what could go wrong, from the perspective of the Feds?

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joe_the_user
It's got more problems even than these.

Bernie Madoff ran on a "network of trust" _and he established a strong track-
record over the years_. The problem is that a monetary system requires more
than even sophisticated mutual trust. It requires knowledge that the
underlying processes are sound - _and most people can't understand that_.
That's exactly why Ponzi schemes constantly reappear.

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TriinT
Maddof was supposed to be an investment manager. Ponzi too. Ripple is just a
way of transferring IOUs. Investment and protocol design are entirely
different beasts.

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SwellJoe
Egads. That's the most obnoxious ad-laden site I've ever seen make it to the
front page of HN. I hope this isn't a trend. The obnoxiousness of the ads also
makes me assume that whatever this is must be a scam.

Here's the actual ripple site:

<http://ripple.sourceforge.net/>

~~~
kragen
I only saw a couple of "ads", and I would characterize them more as "navbars":
the "Be your own boss in:" text down the left side, and the "Learn more
about:" text below it.

But yeah, if I disable AdBlockPlus and tell NoScript to "temporarily allow all
this page" (twice) and then click on the Flash thing on the right that
FlashBlock and NoScript are both blocking, it is a little annoying.

Maybe get some extensions?

~~~
SwellJoe
I very rarely visit parts of the web that are obnoxiously ad-laden. No need
for extensions when the majority of my browsing is at sites that have a bit of
respect for their readers.

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DTrejo
This seems heavily related to "Optimal Account Balancing" from the other day:
<http://news.ycombinator.com/item?id=667088>

Edit: I would think that Ripple uses the math behind optimal account balancing
to power itself.

~~~
TriinT
You're right. Please note that both articles were submitted by me ;-) I have
been interested in reputation systems for a few years, and now I am interested
in combining debt and trust. It's a very difficult problem.

~~~
endtime
Are you involved with Ripple?

~~~
TriinT
No. I am more interested in the mathematical description of the system than in
actually implementing. To be honest, I don't think this problem is ripe for
implementation yet.

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tybris
I doubt it works. Lots of very smart researchers are looking at the problem of
decentralized trust / reputation / economics. It all works fine until people
start gaming the system in groups, which is further amplified by zero-cost
identity (another tricky problem by itself). The solution is generally to
introduce a central authority.

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ivankirigin
Payments is a regulatory problem first, and a distribution problem second.
Somewhere around issue 9 or maybe 11 is "we shouldn't have to rely on banks"

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pelle
I agree with the regulatory issues. Ripple is pretty cool though in that it
may be able to fly under the regulatory scope for a while.

I gave a talk last week at the Reboot conference about the regulatory issues
we face with financial innovation and how to solve them:

<http://www.slideshare.net/pelleb/agile-banking>

~~~
ivankirigin
the easiest way to solve them is to start a new country.

