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?
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.
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.
Is there any document that details how ripple works? Something like "Bitcoin: A Peer-to-Peer Electronic Currency". I browsed the site and right now it looks like a lot of individual wiki pages. Surely there is a defining document?
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.
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.
Did you read my comment? When I referred to a bunch of wiki pages I was referring to (among others) the page you linked to. Are you saying that page is on par with the bitcoin paper? That's a little flimsy for a specification. Are people supposed to refer to that page's wiki revision number and the fifteen other pages that are incorporated by reference/linking?
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?
> 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.
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.
> 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?
"... 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.
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.
I cannot see how this could ever bootstrap. As it is open source what is to stop me creating my own ledger and handing out all the free cash I've just created to people who want to come on my trusted network? (ps: I'll give you more imaginary cash than the founders will! ;) Who would ever pay real money for my imaginary cash? Am I missing something?
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.
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. 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. Not sure why XRP is needed then.