XRPs themselves were basically worthless, but it was required to interact with the ledger (you pay maybe 0.000001 XRP per transaction). The idea was that you pass a small amount on to friends and others interested in using it to create their wallet and start tracking IOUs, and you needed to have at least 20 XRP in your wallet.
Somewhere along the way all hell broke loose, Bitcoin got popular, crypto currencies in general got popular and XRP itself suddenly became worth something, the original concept got lost and everything seemed to go off the rails... That's when I lost interest.
I could go on... but... just my recollection...
If you are interested, it’s worth reading the articles “what is money” and “the credit theory of money” by Alfred Mitchell-Innes. He maintained that “credit and credit alone is money” and I mostly agree with him. Another good paper to read is “money is memory”. Oh and Knut Wisksell “interest and prices” is also very good. A lot of literature has been written on pure credit economies but it is difficult to find as it wasn’t ever a popular school of thought. I’m hoping for a revival though!
This stuff always sounded like it came from people who've never hired. Unskilled labor is not all equal.
> Satoshi’s concept was to use hashcash to both secure the ledger and issue currency. This was brilliant but antithetical to the no-currency concept, and re-ignited the debate
Satoshi's most important advancement was in making a currency and using it as its own rate-limiter by paying, in it, to publish.
Bitcoin's weakness is that computation isn't priced in BTC, so scripts had to be nerfed. Vitalik applied Satoshi's rate-limiting solution to computation and Ethereum scripts can now be allowed to grow arbitrarily complex.
Smart contracts seemed to me to be another sticking point that nearly killed the whole idea. Most people were looking for a better system of simple exchange, and smart contracts made that difficult. Now transactions became difficult to understand and fraught with error. Running a node meant trusting a fairly large code base you downloaded from an insecure Internet forum, and then let strangers run code on that. Before Script came into it, anybody could look at a shell script implementation and understand what was going on with all trusted components. For a long time it looked like Bitcoin would never release, and vulnerabilities in the early versions made everybody realize that they weren’t trusting a mathematical concept; they were trusting software written by some guy on the internet. Then there was the debate inside the smart contracts community about the halting problem and how it could be used to attack the network. This is probably practically solved with transaction costs alone, but I think it was a practical software engineering compromise do scripting without looping and backward jump instructions because they made the software much more complex and vulnerable to attack. Same with the block size, maybe even block time. This was all an experiment. By the time Vitalik started pushing for improvements, the Satoshi compromises had become canon. I spoke to him and he seemed to be in agreement with upgrading the protocol through miner consensus, but, by that point, an industry of rather unsophisticated mining operations had emerged, and they were not interested in changing anything. Briefly I lived with one of the biggest miners in the world, and he would ask questions and I would explain to him how transactions work etc. So Vitalik gave up on on-chain scripting and proposed an off-chain scripting scripting layer that would use a separate gas currency just for smart contracts with settlement on the Bitcoin blockchain. This was very important to distinguish itself from the rest of the already-defunct altcoins. But practically, I don’t know how it was supposed to happen. We have this now, but it’s been a long road. Is there any reason that Bitcoin doesn’t have Turing completeness, faster blocks, oracles, etc? Not really; but a fork would have been risk without reward, whereas a new token offers the ability to premine and speculate. One of the biggest learnings was how much speculation would dominate over anything non-financial, and how hard it would be to modify the Bitcoin experiment. Still, the use cases for smart contracts are very few, and Turing completeness itself is basically unnecessary. But to more directly address the point, Bitcoin has transaction fees already, and it would be simple to assume that a similar consensus on gas price would emerge and doesn’t need to be part of the protocol. To go further, the gas price itself doesn’t solve the problem of computational complexity because only the miner that wins the block actually gets the reward, while all others downstream are expected to verify it, but they have no incentive to do so, and frankly, today, most don’t. As an example, almost nobody boots up an eth node with verification from origin, and they would be greatly in the minority if they corrected a bug. Eth nodes boot to a trusted state handed to them. Most of the early eth discussions I was involved with implied doing this in snarks or some other provable computation in the initial discussions, but that never made it into eth. So no; that problem was never solved, although we are getting closer.
Yup. And still does. There was a huge sea change circa 2013(?) when everything became about currency and speculation. Every idea had to pivot to being its own coin, or including some useless utility token (a bit later) because that was 99%+ of the value to investors.
> Is there any reason that Bitcoin doesn’t have Turing completeness, faster blocks, oracles, etc? Not really; but ...
It feels like the first implementation couldn't have gotten it right if it aimed for too much more than Satoshi did. But technically, yes, BTC is a plausible base for this as much as anything else.
> debate inside the smart contracts community about the halting problem and how it could be used to attack the network. This is probably practically solved with transaction costs alone, but I think it was a practical software engineering compromise do scripting without looping and backward jump instructions because they made the software much more complex and vulnerable to attack.
Unbounded loops are an issue, but functional constructs (foreach) have 99% of the power and little of the risk. Ideally we'd have Satoshi take three months now and make v2, which would be BTC in spirit but with the lessons of the last ten years.
> To go further, the gas price itself doesn’t solve the problem of computational complexity because only the miner that wins the block actually gets the reward, while all others downstream are expected to verify it, but they have no incentive to do so, and frankly, today, most don’t.
This seems like where we need a mechanism that allows a script to be audit-executed, and if its outputs don't match expectations a deposit can be claimed by the auditor and the script will be marked as unreliable. If the precondition of the code is that it returns the correct public key, make sure that key works. If it doesn't you can claim the QA/Security prize - which can be set at whatever amount the script author wants depending on their belief in their code.
> Most of the early eth discussions I was involved with implied doing this in snarks or some other provable computation in the initial discussions, but that never made it into eth. So no; that problem was never solved, although we are getting closer.
Is there a specific blocker for this or just that the complexity is 1000x what is currently supported?
Bitcoin's lightning is in many ways the spiritual successor to the original Ripple idea-- a pathfinding network between pairwise relationships, but instead of IOUs, the parties use smart contracts to twiddle funds around in bitcoin payment channels without having to take the updates to the public network.
This fixes the big security weakness of Ripple while preserving the positive scalability properties. Unfortunately it also requires more complexity and limits flexibility somewhat.
Since you as a bank would only need your own fiat currency + XRP, you could materially cut down on additional costs from holding all the other accounts. When it comes time to convert currencies, because Ripple (XRP) transactions settle in seconds, the period you're exposed to market volatility is virtually zero, so you can move in and out of a position in XRP in exchange for whatever other currency you need almost immediately.
With XRP, you replace all those currencies with some amount of XRP. Because all member-banks use XRP when you need to transaction, say GBP to EUR (simple example), you would take your GBP, convert it to XRP, then use that XRP to buy EUR from another bank, that bank then can hold the XRP or chose to immediately convert it back to EUR through other banks. Like I mentioned previously, that whole transaction takes a few seconds, so you're effectively not subject to market volatility that could impact the transaction itself.
But I could more easily just use my GBP to directly buy Euros, with one less exchange rate and one less transaction in the process.
> that whole transaction takes a few seconds
For a bank, that's slow. But even if it wasn't, using an intermediate currency simply takes twice as long for each step.
In this scenario, the transacting bank would need to have (or want) to have GBP for them to sell Euros. While I agree this is a poor example, think of the more obscure conversions. Swedish kronas to South African rands, etc.
Anyway, I won't pretend XRP is a perfect solution. Just seems to me that it solves the edge cases of liquidity while doing so more cost effectively, which in turn benefits the consumer.
No new currency needed.
Though certainly I'd be pleasantly surprised if Raiden still pulls through on their plans at some point.
Speaking as someone who worked on Raiden's core team last year and spent a reasonable part of this year working on a project received a grant from the Raiden Trust , the last release is workable, but still requires a lot of elbow grease and knowledge of the protocol to get it running. End users will certainly have a better shot when the light client gets parity to the reference implementation and gets a mainnet release.
In any case, I just wanted to point out that Raiden is a project that is related to what OP asked about and that is still alive and kicking.
: https://hub20.io, a self-hosted payment gateway that integrates with Raiden and abstracts all its complexity from the users and node operators to enable fast and near-instant transactions.
So the thing is, isn't this kind of system (very similar to a concept I can only remember as Hawala) explicitly illegal?
> Hawala or hewala (Arabic: حِوالة ḥawāla, meaning transfer or sometimes trust), also known as havaleh in Persian, and xawala or xawilaad in Somali, is a popular and informal value transfer system based not on the movement of cash, or on telegraph or computer network wire transfers between banks, but instead on the performance and honour of a huge network of money brokers (known as hawaladars). While hawaladars are spread throughout the world, they are primarily located in the Middle East, North Africa, the Horn of Africa, and the Indian subcontinent, operating outside of, or parallel to, traditional banking, financial channels, and remittance systems. Hawala follows Islamic traditions but its use is not limited to Muslims.
> Some government officials[which?] assert that hawala can be used to facilitate money laundering, avoid taxation, and move wealth anonymously. As a result, it is illegal in some U.S. states, India, Pakistan, and some other countries.
The whole IOU system doesn't need crypto to work -- but you just can't set up the kind of clearing house/federation that you'd need in the US because it's illegal, I thought.
The similarity here I thought was the trading of IOUs -- this seems to be very similar to what hawala is/was.
Also, hawala is legal in most jurisdictions I believe.
Ethereum exists because Bitcoin isn't capable of running complex scripts.
Monero exists because Bitcoin is too transparent.
It'll eventually tank, but not until the insane FOMO ends. For example, the completely useless Dogecoin still has a $600M "market cap", and at one point popped over $2B.
Ethereum was explicitly created because Bitcoin doesn't support decentralized applications or really anything beyond sending tokens between humans. Vitalik tried to work on the Bitcoin codebase but was shunned and was forced to start a new project.
Do you include ethereum here? if so you are woefully misinformed.
I would have hoped for the community to collude and vote/bid its price up to give the SEC a big "ha" and also cover the costs of lawsuits.
After all crypto is one place where markets can be manipulated and the proceeds put to good use.
For years I've told loved ones, friends, and anyone with a passing interest in the nascent space to avoid Ripple like the plague.
A blockchain is just an incredibly inefficient way to store those messages, giving them an explicit ordering in case they don't have internal IDs, and to establish ordering between users. All of that can be done with a simple 'index server' that doles out ordered message IDs, without the blocks, the mining, etc.
Banks don't even need the currency. Banks just settle their debts in their local currency and they trust enforcement to the courts and bailiffs. This is what Ripple had right, in the beginning. They only need a messaging layer.
Or you can ignore the nuances and complexes, say fuck it, and support a system that disables power that good organizations do need to manage bad actors - instead of turning the clock back and making the world a "free for all" - making tools like the Magnisky Act unenforceable, along with other unavoidable pitfalls that pro-Bitcoiners ignore, scoff at without rebuttal, or glance over without serious thought. Regulatory capture is real and it needs to be addressed always - and if you work from founding principles and are honest with yourself you'll come to the conclusion that centralized organizations are a necessity to fighting "evil"/bad behaviour with good, responsible, trustworthy people
The argument then goes into nuance of where the debate continues as to how conservative or liberal you are - how "small" or "big" the government is, e.g. what decision making power or function does or should government have, e.g. Universal Basic Income/UBI - the Freedom Dividend as Andrew Yang calls it - would arguably be more of traditional Conservative/Republican leaning - giving $1,000/month to individuals for THEM TO DECIDE what to do with the money vs. some bureaucratic government agency spending that money themselves making broad-vague decisions, almost always influenced by regulatory capture and industrial complexes manipulating the system via influencing politicians and the population via propaganda of various forms: "tobacco is good for you" - says your doctor, "fat is bad for you" says the sugar and health industry, "MDMA/mushrooms are bad for you" - says big pharma industry who can't patent those medicines, etc.
Edit: LUL - imagine a person actually had to put the effort into writing a qualitative response instead of getting a dopamine hit from a single click to ignore/avoid engaging.
No, you can't; that's rather the problem.
In my last comment I highlight the main policies necessary for a big shift to be able to occur:
"Until there's a strong enough impetus and they start to learn the game to understand it: I'd considered Andrew Yang a normal person, who published a book called The War On Normal People before running for President this last election.
More people like him will come to light, especially once policy proposals he's made like Freedom Dividend/UBI, Ranked Choice Voting, Democracy Dollars, Journalism Dollars get implemented to break apart the two-party system."
- from https://news.ycombinator.com/item?id=25509841
More people like him will come to light, especially once policy proposals he's made like Freedom Dividend/UBI, Ranked Choice Voting, Democracy Dollars, Journalism Dollars get implemented to break apart the two-party system.
Problem with Ripple is creation of new XRPs, they had full control over that.
A decentralized system is a distributed system that still works _when nodes are owned by multiple different (even competing/malicious) parties_.
See the Byzantine Generals Problem.
Losing a means to convert to/from fiat currencies would drive away the vast majority of BTC traders, and possibly cause something of a bank run upon the announcement of SEC action against them.
I mean, let's be real here, the vast majority of BTC transactions aren't for goods or services.
I don't get it, how does "controlling much of mining" allow them to control the market? It does give a bunch of bitcoin to play around with, but it costs money (electricity, manufacturing costs) for them to mine them, so depending on their margins they'll be less impactful than a whale who loaded up on cheap coins a few years ago.
That wouldn’t eradicate Bitcoin or anything, but it would make it far less useful than it is currently, and have a significant impact on its value. It would also be a pretty bad idea, because the power of US sanctions is largely derived from demand for USD, and political volatility puts downward pressure on that demand, so you generally don’t want to waste it on frivolous sanctions.
A government which participates in international banking coalitions or treaty groups can use those relationships to go after transactions internationally, too. Think about how drug cartels have secret bank accounts frozen, and then about how Bitcoin is designed to make that easier by giving the authorities a full list of your activities which is trivially extended to every partner. Once you’re on that list, everyone you know will be getting pressure to turn on you.
Now think about a major government: they can not only use normal law enforcement but also control the exchanges themselves with things like anti-money laundering laws. Someone might choose to blow off demands from a small country or a pariah state like Iran but if the US or EU decided to act everyone involved is now facing things like not being able to fly internationally or do business with most major companies. Since they have no upside to resisting and it’s trivial to block Bitcoin transactions, anyone in those jurisdictions is unlikely to risk that protecting a stranger in a different country.
Decentralized P2P exchanges exist(bisq/hodlhodl), and shutting down centralized exchanges would force people to use those as the on/off ramps.
The best way for regulators to fight bitcoin imo is to slowly assimilate it into the legacy finance infrastructure to the point that it becomes similar to gold reserves, something only central banks and large institutions hold, while the public might only hold IOUs. Similar to what paypal is already doing.
You can't have it both ways. If you're centralized, you must be regulated as such.
They absolutely are suing XRP.
As far as I can see they're delivering on their promises.
The problem cryptocurrency industry doesn't understand is when you work in finance you are heavily regulated. You cannot just work with "decentralized" systems and call it a day. Every action you do is answerable, everything is questioned and scrutinized.
Having someone like Ripple and XCurrent as an intermediate as a regulated company helps solve a lot of problems. Since Ripple itself is regulated it's easy to justify to regulators. Ripple is also answerable when transactions delay happens.
For Etherereum / Smartcontracts who do you contact for support when transactions SLAs aren't being met?
I'm no expert though, there may be other SEC rules that are more relevant.
In general, crypto technology is valuable for it's ability to replace capricious monopolies with distributed implementations built on federated protocols run like a constitutional democracy.
We can of course expect established monopolies and governments to retaliate in every way possible in an attempt to maintain power.
Only in America. Most other countries have this under control.
> In general, crypto technology is valuable for it's ability to replace capricious monopolies with distributed implementations built on federated protocols run like a constitutional democracy.
No, in general crypto technology is valuable because it can avoid laws created by constitutional democracies. Its a back door for money launderers and illegal payments.
> We can of course expect established monopolies and governments to retaliate in every way possible in an attempt to maintain power.
Exactly we voted for this government to enforce some rules, if cryptos are a way to avoid the rules, it will be made illegal.
Also maybe it’ll be made illegal in some countries, but if others work as fertile grounds for crypto, they will leak into all others eventually. Specially if their advantages are too good to pass.
It's also valuable for that, but I argue it has greater value in legal transactions that currently must operate through said gatekeepers who impose extralegal restrictions.
If they were branded as a security that would not automatically declare them to be a currency. It would put them in the category of equity securities (with the owners having rights accordingly as equity owners). USD holders are not regarded as having an equity ownership stake in the currency for example.
It is not strange, the SEC sends what are called Wells Notices to companies and reporting companies often announce the receipt of them
Ripple is not a reporting company and doesnt have an asset to report on, and coming to an agreement with the SEC on staying that way has hit an impasse, for them to announce this
> Looks like the Ripple/XRP team is sinking to new levels of strangeness. They're claiming that their shitcoin should not be called a security for public policy reasons, namely because Bitcoin and Ethereum are "Chinese-controlled". [Two relevant screenshots of the document enclosed in tweet]
Announced three days ago. Public comment period ends right after New Year's.
The bankers are loaded with Bitcoin now (with Bitcoin having gone fully mainstream on Wall Street), so maybe it's time to eliminate/weaken some of the perceived competition.
Or, because Bitcoin is at $22,500 and they'd like to tarnish the crypto market a bit if they can, cast it as a shady place, drive down institutional interest via scandal and government prosecution. It's a plausible serious competitor to fiat currencies in the coming decades. The ideal scenario for the major central banks - they who rule fiat - is that Bitcoin goes to zero.
The clowns that run this world frequently view gold as a problem, a threat, and they work hard to suppress its value. They also occasionally get caught doing so. If they can figure out a good way to do it, they may assault the value of Bitcoin, directly or indirectly, given the chance.
Who has a vested interest in not seeing fiat currencies weaken as the central financial instrument of every major economy? Pretty much everyone that controls everything today, the entrenched.
And one other very plausible reason: this is being fired off just before an administration switch-over, because the people that have pushed for it may think it'll get lost in the shuffle, as the new administration will have its own priorities it will want pursued (such that this could get pushed down the list or neglected). It often happens in government right before admin switch-over, it's why all the anti-trust cases were rushed and fired off right before the presidency changes hands.
How do you feel about the theory of BTC acting as a controlled opposition to gold?
I find it interesting that the same CNBC commentators who slam gold promote BTC as "digital gold". If gold is so useless in their eyes, why is intangible "digital gold" being pushed? Despite the anti-establishment veneer of BTC, it is accepted and promoted by the MSM. Gold is still derided.
There's a parallel with the captured, walled-garden Internet. BTC's lack of usability, Mnuchin's words on self-hosted wallets all point to this so called disruptive technology being captured. Similarly, platforms like PayPal taking an interest in BTC point in the same direction.
Looks more and more like a steppingstone, positioning of goal posts towards CBDC.
As for what this SEC lawsuit would mean to them, your guess is as good as mine. The price of XLM has dropped a little  and actually tracks XRP reasonably closely .
Primary risk seems to be de-listing from 200+ crypto exchanges
ETHE the grayscale Ethereum trust has skyrocketed lately and has about 285 Million shares outstanding.
On January4th an additional 1.05 Billion shares come free trading as their 6 month lockup expires.
Oh and its currently trading at a 200+% to its net asset value.
Its conceivable Ethereum itself could double and ETHE could still drop 50%.
That makes two which is, checks definition in dictionary, a few:)
I'm not exactly sure what you want me to respond to:)
20 meg PDF = guilty as charged.
XRP is currently down 9.55% for the day and will surely tank further.
I don't think this is likely to send a signal that the US is "anti-crypto", though I'll have to see the litigation to know for sure.
When ripple was created many people in the cryptocurrency space had or were considering doing something similar and many reached the conclusion that what ripple went on to do would be unambiguously unlawful.
More enforcement can actually send a very positive signal: Lack of enforcement goes on to create a lemon market where bad conduct flourishes. It's extremely difficult to be in business against someone that can bring in billions in funding with almost no real obligations by deceiving unsophisticated members of the public. The lack of enforcement also sends an ambiguous signal that maybe more legitimate efforts will be prosecuted but just haven't yet because they haven't gotten around to it as evidenced by the lack of prosecution of many of the more obviously sketchy efforts.
I don't think they've deceived anyone. It takes <2 minutes of research to figure out that it's a network of financial institutions approved by Ripple controlling their network, as well as their supply schedule details/distribution. Anyone who buys XRP should be expected to figure this out for themselves. The government shouldn't waste tax dollars and resources babying irresponsible people who don't take the time to figure it out before buying.
I can't believe I'm defending Ripple. I think anyone who buys XRP is making a very unwise decision, precisely because the government does ridiculous things like this all the time.
I wish the government wouldn't do things like this and Bitcoin had no use case. But alas, governments will continue to suck.
That may be true today-- years into it, due to a lot of people exposing themselves to enormous amounts of harassment just to get the message out.
It certainly hasn't always been the case.
Could you share the text of an email someone sent you that shows what they weren't aware of?
>It's extremely easy for people to fall down the rabit hole of only reading content authored by people pumping it.
I also don't even deny this. But it doesn't excuse the irresponsible decision to buy something without understanding the most critical aspects of what it is and how it works. We should expect people to be responsible when investing, and to be able to do proper research for themselves, and to let them lose their money when they fail to do so. We don't need to waste tax dollars babying and protecting irresponsible investors.
From the article: SEC officials have declared Bitcoin and Ether to be currencies, as they are decentralized in their management, but have left the door open for others to qualify as securities, especially at the time of their issuance.
So not really. The US needs to evolve to the new world.
If a currency crisis arises and the market is frozen, cryptos will not be on the first lien right to trade for Fed assets (whatever that currency might end up to be) or even continue trading, depending on the decisions of the Fed. Hell, I don't expect the issued currency (cash - which the long tail of people are still using) will have that right...since the Fed board members aren't going to be running around with palettes of cash when buying goods either.
BTC has been struggling to push higher for a few days with bearish moves. I'm still a long term bull but I just pulled 100k out, should get a nice discount as it breaks down toward 20k. (I'll average in at anything below 21.)
> Who is the SEC protecting?
JP Morgan and the US e-Dollar.
Or FedCoin as George Hotz called it recently in a Lex Friendman podcast .
P.S.: I thought this was an entertaining podcast, George is a funny guy.