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LegendaryActivity: 1064Merit: 1001 Ripple explained for Bitcoiners! May 20, 2013, 05:10:44 PM

Last edit: May 21, 2013, 05:48:55 PM by misterbigg #1 Quote from: Micon on May 19, 2013, 07:50:42 PM I want this on record that I cannot understand Ripple. With Ripple, I only generate questions, not answers.

Micon it's nice to see your questions and legitimate complaints expressed in a civil fashion. I totally agree with you that Ripple is hard to understand at first. Perhaps the easiest way to understand Ripple is to recognize the similar ways that you already accept IOUs and currencies. I'll use MtGox as an example:







Imagine you wire some money over to MtGox because you want to buy Bitcoins. A few days after you wire the money, the balance appears in your MtGox account and is visible when you log into their site. Now you look at the order book and decide to place a few orders. Eventually they execute and you are left with both a USD balance and now a BTC balance. Both of these balances are visible on the MtGox website. At this point you decide that you would like to have your dollars and Bitcoins so you go to their Withdrawal page and first ask them to wire you the remaining USD balance to your bank account, and then have them send your Bitcoin balance to your wallet address. An hour or two later the bitcoins appear in your wallet, and hopefully a few days later your bank account shows the dollars.



Ripple functions almost identically to this example! Using Ripple to perform these actions would look like this:



You choose a Ripple gateway that you trust (right now Bitstamp is the largest gateway but that will change as more appear). You open an account at the gateway then you wire some dollars over to the gateway. A few days later the balance appears in your gateway account when you log into their site (bitstamp.net for example). Now you "withdraw" the dollar balance into Ripple. Logging into your Ripple wallet client (



What's the difference between this and MtGox? Imagine if you had a $100 balance at MtGox and you could transfer that balance not just to any other MtGox user but to any user in general. That's the power of Ripple! If you are holding IOUs from a gateway, Ripple's decentralized system allows you to send those IOUs to anyone who will accept them in a cryptographically secure manner. You can use those IOUs to trade in the built-in distributed order books to receive BTC IOUs, exchange them for other currencies like Euro IOUs, or anything.



As long as you trust the gateway to redeem those IOUs back into whatever they are supposed to represent (like dollars or Bitcoins), then the balances in the Ripple system are as good as the money they represent.



Can you lose money? Yes. You don't hold actual Bitcoins in your Ripple wallet, you hold a gateway's promise to pay bitcoins later. If the gateway defaults you can lose up to the entire amount of their debt that you hold. This is no different than having a BTC and/or USD balance at MtGox, and they freeze your account or otherwise refuse to redeem your balance.



A lot of bitcoiners might complain that having to trust a gateway is the very problem that Bitcoin is intended to solve, and to a certain extent they are right. However, this overlooks the fact that it is impossible to completely avoid interacting with the fiat money system. Rather than thumbing its nose at the banking system and asking for a fight, Ripple plays nicely with it to the extent that it can. It provides tremendous functionality. You do have to find a reputable gateway for IOUs to have value.



Quote How the pre-mine work? what is an xrp, in reality? who got 50B xrps? so they hold all the Ripple "debt" ?

"XRP" (often confusing called "Ripples") is a crypto-currency that is built into the Ripple system. Like bitcoins there can only ever be 100 billion of them, and they are divisible to many decimal places. Unlike bitcoins, they are not mined. Instead, the "genesis ledger" (this is similar to Bitcoin's genesis block) was created with 100 billion XRPs sitting inside an account whose private key is owned by the founders of the Ripple system.



Ripple uses XRPs to pay for transaction fees. The XRPs used to pay for transactions are destroyed (this might seem counter intuitive but trust me its the right thing to do). XRPs are also held as reserves in your account to allow you to do certain things. For example, in order to even create a Ripple account you need 50 XRPs to sit in there. XRPs used as reserves cannot be sent to any other account, but they can be used for transaction fees. Essentially once the XRPs are used as reserves they are "stuck" or "sequestered", unless the network decides reserve requirements should be lowered because they are too expensive.



OpenCoin states that 20 billion XRP is held by the founders of the software, with the other 80 billion going to OpenCoin. Out of this 80 billion, a full 50 billion will be given away to promote the usage of the system (in other words, to make new account creation essentially free for a time). The remaining 30 billion will be held and sold from time to time by OpenCoin in order to fund its operations. Holding and selling XRP is the only way OpenCoin can make money.



Because XRPs are sequestered as reserves, OpenCoin can give away a lot of them without causing the price to drop, since reserves cannot be sent to other people or used to buy IOUs.



Quote so the initial friends of opencoin get most of the initial rights to issue trust (debt) ?

XRPs are different from IOUs. XRPs are not debt. Anyone with a Ripple account can issue IOUs. The trick is getting people to accept your IOUs. Realistically speaking, only IOUs from a gateway will have any significant value or liquidity. Gateways are corporations with legal standing, and should be licensed and fully regulated in their jurisdiction. This is why you can hopefully trust their IOUs. Gateways also need to hold customers' funds on deposit.



It seems Bitstamp and WeExchange were very interested in operating as gateways early on, while other exchanges were not. I see no evidence that OpenCoin is restricting companies who want to get on board. Quite the opposite, it would seem to be in their best interest to have as many gateways as possible. The more gateways, the better, because there are that many more ways to get money into and out of the system. Compare this with Bitcoin, where MtGox is the bottleneck and lifeblood of almost all the Bitcoin businesses. If MtGox was to close down it would disrupt Bitcoin significantly for a while. With Ripple, having many gateways allows many points of entry; Once you have deposited funds in a gateway they can be used anywhere, not just in MtGox' order book.



Quote How do I sell 1 btc for USD? Is this possible with ripple?

Yes it is possible:



1) Open an account at a gateway (Bitstamp.net for example)

2) Deposit your BTC at the gateway

3) Withdraw the BTC as a BTC IOU in Ripple

4) In the Ripple client send a payment to yourself in USD

The client will show you the price, you can accept it or cancel

5) Deposit the USD back into the gateway

6) Withdraw the USD from the gateway to your bank account



Quote It seems way too complex and not needed in any way.

Complex yes. And very much needed!



Quote there is not a second bitcoin IMO...it seems to me that Ripple is trying to be bitcoin

Ripple is definitely not trying to be Bitcoin. Instead, it is trying to take concepts that we are already familiar with like exchanges holding our fiat money and cryptocurrency for us, and make it more explicit and functional using a decentralized cryptographically secure accounting system.

Micon it's nice to see your questions and legitimate complaints expressed in a civil fashion. I totally agree with you that Ripple is hard to understand at first. Perhaps the easiest way to understand Ripple is to recognize the similar ways that you already accept IOUs and currencies. I'll use MtGox as an example:Imagine you wire some money over to MtGox because you want to buy Bitcoins. A few days after you wire the money, the balance appears in your MtGox account and is visible when you log into their site. Now you look at the order book and decide to place a few orders. Eventually they execute and you are left with both a USD balance and now a BTC balance. Both of these balances are visible on the MtGox website. At this point you decide that you would like to have your dollars and Bitcoins so you go to their Withdrawal page and first ask them to wire you the remaining USD balance to your bank account, and then have them send your Bitcoin balance to your wallet address. An hour or two later the bitcoins appear in your wallet, and hopefully a few days later your bank account shows the dollars.Using Ripple to perform these actions would look like this:You choose a Ripple gateway that you trust (right now Bitstamp is the largest gateway but that will change as more appear). You open an account at the gateway then you wire some dollars over to the gateway. A few days later the balance appears in your gateway account when you log into their site (bitstamp.net for example). Now you "withdraw" the dollar balance into Ripple. Logging into your Ripple wallet client ( http://ripple.com/client ) you will see that you hold a USD balance from your gateway. You look into the BTC/USD order books inside the Ripple client and place a few orders. Shortly after, they execute and you are left with a BTC and USD balance showing. Now you decide that you want to cash out so you "Deposit" the BTC and USD from Ripple back into your gateway account. You log into your gateway account through their website and you can see your BTC and USD balance. You go to the Withdrawal page at the gateway and first ask them to wire you the remaining USD balance, and then have them send your Bitcoin balance to your wallet address. An hour or two later the bitcoins appear in your wallet, and hopefully a few days later your bank account shows the dollars.What's the difference between this and MtGox? Imagine if you had a $100 balance at MtGox and you could transfer that balance not just to any other MtGox user but to any user in general. That's the power of Ripple! If you are holding IOUs from a gateway, Ripple's decentralized system allows you to send those IOUs to anyone who will accept them in a cryptographically secure manner. You can use those IOUs to trade in the built-in distributed order books to receive BTC IOUs, exchange them for other currencies like Euro IOUs, or anything.As long as you trust the gateway to redeem those IOUs back into whatever they are supposed to represent (like dollars or Bitcoins), then the balances in the Ripple system are as good as the money they represent.Can you lose money? Yes. You don't hold actual Bitcoins in your Ripple wallet, you hold a gateway's promise to pay bitcoins later. If the gateway defaults you can lose up to the entire amount of their debt that you hold. This is no different than having a BTC and/or USD balance at MtGox, and they freeze your account or otherwise refuse to redeem your balance.A lot of bitcoiners might complain that having to trust a gateway is the very problem that Bitcoin is intended to solve, and to a certain extent they are right. However, this overlooks the fact that it is impossible to completely avoid interacting with the fiat money system. Rather than thumbing its nose at the banking system and asking for a fight, Ripple plays nicely with it to the extent that it can. It provides tremendous functionality. You do have to find a reputable gateway for IOUs to have value."XRP" (often confusing called "Ripples") is a crypto-currency that is built into the Ripple system. Like bitcoins there can only ever be 100 billion of them, and they are divisible to many decimal places. Unlike bitcoins, they are not mined. Instead, the "genesis ledger" (this is similar to Bitcoin's genesis block) was created with 100 billion XRPs sitting inside an account whose private key is owned by the founders of the Ripple system.Ripple uses XRPs to pay for transaction fees. The XRPs used to pay for transactions are destroyed (this might seem counter intuitive but trust me its the right thing to do). XRPs are also held as reserves in your account to allow you to do certain things. For example, in order to even create a Ripple account you need 50 XRPs to sit in there. XRPs used as reserves cannot be sent to any other account, but they can be used for transaction fees. Essentially once the XRPs are used as reserves they are "stuck" or "sequestered", unless the network decides reserve requirements should be lowered because they are too expensive.OpenCoin states that 20 billion XRP is held by the founders of the software, with the other 80 billion going to OpenCoin. Out of this 80 billion, a full 50 billion will be given away to promote the usage of the system (in other words, to make new account creation essentially free for a time). The remaining 30 billion will be held and sold from time to time by OpenCoin in order to fund its operations.Because XRPs are sequestered as reserves, OpenCoin can give away a lot of them without causing the price to drop, since reserves cannot be sent to other people or used to buy IOUs.XRPs are different from IOUs. XRPs are not debt. Anyone with a Ripple account can issue IOUs. The trick is getting people to accept your IOUs. Realistically speaking, only IOUs from a gateway will have any significant value or liquidity. Gateways are corporations with legal standing, and should be licensed and fully regulated in their jurisdiction. This is why you can hopefully trust their IOUs. Gateways also need to hold customers' funds on deposit.It seems Bitstamp and WeExchange were very interested in operating as gateways early on, while other exchanges were not. I see no evidence that OpenCoin is restricting companies who want to get on board. Quite the opposite, it would seem to be in their best interest to have as many gateways as possible. The more gateways, the better, because there are that many more ways to get money into and out of the system. Compare this with Bitcoin, where MtGox is the bottleneck and lifeblood of almost all the Bitcoin businesses. If MtGox was to close down it would disrupt Bitcoin significantly for a while. With Ripple, having many gateways allows many points of entry; Once you have deposited funds in a gateway they can be used anywhere, not just in MtGox' order book.Yes it is possible:1) Open an account at a gateway (Bitstamp.net for example)2) Deposit your BTC at the gateway3) Withdraw the BTC as a BTC IOU in Ripple4) In the Ripple client send a payment to yourself in USDThe client will show you the price, you can accept it or cancel5) Deposit the USD back into the gateway6) Withdraw the USD from the gateway to your bank accountComplex yes. And very much needed!Ripple is definitely not trying to be Bitcoin. Instead, it is trying to take concepts that we are already familiar with like exchanges holding our fiat money and cryptocurrency for us, and make it more explicit and functional using a decentralized cryptographically secure accounting system.

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LegendaryActivity: 1064Merit: 1001 Re: Ripple explained for Bitcoiners! May 20, 2013, 05:59:08 PM

Last edit: May 21, 2013, 04:11:21 AM by misterbigg #2 Just The Facts



I've made this a moderated to prevent repetition of baseless accusations. To be clear, here are some well established facts about Ripple:



1. Ripple is a payment and accounting system, not just a cryptocurrency.

2. Ripple is beta software and not ready for the general public!

3. XRP is Ripple's built in currency, and it is used for important things.

4. Only 100 billion XRP can ever exist, and OpenCoin starts out with all of them.

5. Transaction fees, paid in XRPs, can be lowered or changed through consensus.

6. Ripple server is closed source but will be open sourced soon. The client is open source now.

7. OpenCoin says their plan to make money is to "hold XRPs and hope they go up in value."

8. Ripple founders own 20% of all XRP.

9. OpenCoin plans to give away 50% of all XRP to fund new accounts and promote the system.

10. OpenCoin will sell the remaining 30% of all XRP to finance operations and repay investors.

11. As long as OpenCoin holds most of the XRP, they can influence its price.



You do not need to invest large amounts of money in XRP or hold a significant amount of XRP in order to benefit from Ripple!



Investing in XRP is risky as fuck!



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Full MemberActivity: 236Merit: 100 Re: Ripple explained for Bitcoiners! May 20, 2013, 06:19:22 PM #3 Let's take an example of two gateways, Bitstamp and Foobit.



They both issue IOUs denominated in bitcoin. Does Ripple have an order book for BTC <-> USD or is it really Bitstamp-BTC-IOU <-> USD, and then a separate order book for Foobit-BTC-IOU <-> USD?



If I have this right then ripple isn't really a decentralized exchange, it's a common interface to many exchanges. You still cannot put in a single Bid order for 10 BTC and expect more than 1 gateway to see it?

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LegendaryActivity: 1064Merit: 1001 Re: Ripple explained for Bitcoiners! May 20, 2013, 06:27:24 PM #5 Quote from: zeroday on May 20, 2013, 06:23:47 PM Thanks for the explanation. This makes things clear.



You're welcome.



Quote It seems that XRP is centralized fully controlled by single entity "currency" which looks like a "pyramid" scheme where early XRP holders, who get it for free from OpenCoin corporation, do their best to promote this "currency" and make it popular and gained in price. Don't you agree?

I fully disagree. This is the definition of a pyramid scheme:



Quote A pyramid scheme is a non-sustainable business model that involves promising participants payment or services, primarily for enrolling other people into the scheme, rather than supplying any real investment or sale of products or services to the public.

If Ripple did not offer anything useful then yes I would think it was a pyramid scheme. A few of the alt-coins could be considered pyramids. But Ripple is not just a simple coin, it is a decentralized system for tracking balances, self-issued credits, and making payments. Therefore it is not a pyramid scheme.



The XRP currency will go up in value not because it is promoted by people, but because it serves a useful function. Just like Bitcoin.

You're welcome.I fully disagree. This is the definition of a pyramid scheme:If Ripple did not offer anything useful then yes I would think it was a pyramid scheme. A few of the alt-coins could be considered pyramids. But Ripple is not just a simple coin, it is a decentralized system for tracking balances, self-issued credits, and making payments. Therefore it is not a pyramid scheme.The XRP currency will go up in value not because it is promoted by people, but because it serves a useful function. Just like Bitcoin.

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LegendaryActivity: 1064Merit: 1001 Re: Ripple explained for Bitcoiners! May 20, 2013, 06:36:05 PM

Last edit: May 20, 2013, 06:46:14 PM by misterbigg #7 Quote from: jmw74 on May 20, 2013, 06:19:22 PM Let's take an example of two gateways, Bitstamp and Foobit.



They both issue IOUs denominated in bitcoin. Does Ripple have an order book for BTC <-> USD or is it really Bitstamp-BTC-IOU <-> USD, and then a separate order book for Foobit-BTC-IOU <-> USD?

It's actually a little more complicated than that. If both gateways deal in both BTC and USD, then we have these order books



BTC.Bitstamp -> XRP

BTC.Bitstamp -> USD.Bitstamp

BTC.Bitstamp -> BTC.Foobit

BTC.Bitstamp -> USD.Foobit

BTC.Foobit -> XRP

BTC.Foobit -> BTC.Bitstamp

BTC.Foobit -> USD.Bitstamp

BTC.Foobit -> USD.Foobit

USD.Bitstamp -> XRP

USD.Bitstamp -> BTC.Bitstamp

USD.Bitstamp -> BTC.Foobit

USD.Bitstamp -> USD.Foobit

USD.Foobit -> XRP

USD.Foobit -> BTC.Bitstamp

USD.Foobit -> USD.Bitstamp

USD.Foobit -> BTC.Foobit

XRP -> BTC.Bitstamp

XRP -> BTC.Foobit

XRP -> USD.Bitstamp

XRP -> USD.Foobit



Each order book only goes "one way." To present the bids and asks the way we expect, the Ripple client combines two order books and shows them as bids and asks. For example, it would show USD.Foobit -> BTC.Foobit and BTC.Foobit -> USD.Foobit as a unified book.



Quote If I have this right then ripple isn't really a decentralized exchange, it's a common interface to many exchanges. You still cannot put in a single Bid order for 10 BTC and expect more than 1 gateway to see it?

Partly true. The main concept in Ripple is the notion of "rippling a payment". In laymans terms this means that Ripple uses an algorithm to compute a payment path that can involve changing between multiple currencies in any order book in order to get you what you want.



Even if you put a bid for 10 BTC in a particular order book, someone else who is not specifically looking in that order book can take your offer if their payment "ripples through" your bid (i.e. your bid is the best price at the time).



For rippling to work there needs to be liquidity in the order books. If you notice, in your simple example there are lots of books! A liquidity provider will typically not put offers in all the books. Instead, they will just put offers converting IOUs to and from XRP. Then the Ripple software will see a pathway between any currencies. For example a liquidity provider might place offers in these books:



USD.Bitstamp -> XRP

BTC.Foobit -> XRP

XRP -> USD.Bitstamp

XRP -> BTC.Foobit



Now consider what happens when you put up a bid for 10 BTC in the Foobit order book. Someone who has only Bitstamp USD can still take your offer by sending a payment to himself denominated in Bitcoins! It will take this path:



USD.Bitstamp -> XRP -> BTC.Foobit -> XRP -> BTC.Bitstamp



Here, someone with Bitstamp USD is able to take the Foobit BTC order and receive Bitstamp BTC, using liquidity in the 4 order books. There are costs associated with this, based on the spreads in each book. But since anyone can compete to provide liquidity the spreads will get really small.



This is what makes Ripple powerful, and also why XRP will be useful and appreciate.

It's actually a little more complicated than that. If both gateways deal in both BTC and USD, then we have these order booksBTC.Bitstamp -> XRPBTC.Bitstamp -> USD.BitstampBTC.Bitstamp -> BTC.FoobitBTC.Bitstamp -> USD.FoobitBTC.Foobit -> XRPBTC.Foobit -> BTC.BitstampBTC.Foobit -> USD.BitstampBTC.Foobit -> USD.FoobitUSD.Bitstamp -> XRPUSD.Bitstamp -> BTC.BitstampUSD.Bitstamp -> BTC.FoobitUSD.Bitstamp -> USD.FoobitUSD.Foobit -> XRPUSD.Foobit -> BTC.BitstampUSD.Foobit -> USD.BitstampUSD.Foobit -> BTC.FoobitXRP -> BTC.BitstampXRP -> BTC.FoobitXRP -> USD.BitstampXRP -> USD.FoobitEach order book only goes "one way." To present the bids and asks the way we expect, the Ripple client combines two order books and shows them as bids and asks. For example, it would show USD.Foobit -> BTC.Foobit and BTC.Foobit -> USD.Foobit as a unified book.Partly true. The main concept in Ripple is the notion of "rippling a payment". In laymans terms this means that Ripple uses an algorithm to compute a payment path that can involve changing between multiple currencies in any order book in order to get you what you want.Even if you put a bid for 10 BTC in a particular order book, someone else who is not specifically looking in that order book can take your offer if their payment "ripples through" your bid (i.e. your bid is the best price at the time).For rippling to work there needs to be liquidity in the order books. If you notice, in your simple example there are lots of books! A liquidity provider will typically not put offers in all the books. Instead, they will just put offers converting IOUs to and from XRP. Then the Ripple software will see a pathway between any currencies. For example a liquidity provider might place offers in these books:USD.Bitstamp -> XRPBTC.Foobit -> XRPXRP -> USD.BitstampXRP -> BTC.FoobitNow consider what happens when you put up a bid for 10 BTC in the Foobit order book. Someone who has only Bitstamp USD can still take your offer by sending a payment to himself denominated in Bitcoins! It will take this path:USD.Bitstamp -> XRP -> BTC.Foobit -> XRP -> BTC.BitstampHere, someone with Bitstamp USD is able to take the Foobit BTC order and receive Bitstamp BTC, using liquidity in the 4 order books. There are costs associated with this, based on the spreads in each book. But since anyone can compete to provide liquidity the spreads will get really small.This is what makes Ripple powerful, and also why XRP will be useful and appreciate.

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LegendaryActivity: 1064Merit: 1001 Re: Ripple explained for Bitcoiners! May 20, 2013, 06:41:40 PM #9 Quote from: zeroday on May 20, 2013, 06:34:51 PM since the most of XRP is in full possession by OpenCoin, doesn't it mean that market value of this currency can be easily controlled (manipulated) by this corporation?

As long as OpenCoin holds a lot of XRP, they can influence the price. They can't create new XRPs though, without approval of all the validators participating in the consensus process. Realistically, they can only manipulate the price until their XRP runs out. Then the price will be dictated by the market.



Is price manipulation so bad? They could hold a lot of XRP back and make it go up in value. This could make transactions and new accounts more expensive temporarily, but the validators will just vote to reduce the reserves and fees. So OpenCoin hoarding XRP does not affect users of the system very much.



They could give away tons of XRP, which is their stated plan. This might not affect the price much at all, since the reserves are "sequestered" in the account and cannot be spent except on fees.



They could sell XRP into the market. If they sell too much, the price could crash. Notice that OpenCoin is not recommending XRP as an investment! If you plan on buying a lot of XRP, you are exposed to what we call "flood risk:" that OpenCoin will dump large quantities of XRP and make the price drop. Will they do this? I don't know. It will certainly be against their best interests. Think of it this way: if you held 50,000 bitcoins would you put them on MtGox and sell them at market?



Another possibility is that OpenCoin will manage the price of XRP so that it grows slowly and in a sustainable way to prevent bubbles like what we saw with Bitcoin going to $266 then crashing to $50. People complain about Bitcoin's price stability all the time. With XRP's temporary central management, there is a solution. I don't know what they will do though.



Let's be clear:



Investing in XRP is risky as fuck!



As long as OpenCoin holds a lot of XRP, they can influence the price. They can't create new XRPs though, without approval of all the validators participating in the consensus process. Realistically, they can only manipulate the price until their XRP runs out. Then the price will be dictated by the market.Is price manipulation so bad? They could hold a lot of XRP back and make it go up in value. This could make transactions and new accounts more expensive temporarily, but the validators will just vote to reduce the reserves and fees. So OpenCoin hoarding XRP does not affect users of the system very much.They could give away tons of XRP, which is their stated plan. This might not affect the price much at all, since the reserves are "sequestered" in the account and cannot be spent except on fees.They could sell XRP into the market. If they sell too much, the price could crash. Notice thatIf you plan on buying a lot of XRP, you are exposed to what we call "flood risk:" that OpenCoin will dump large quantities of XRP and make the price drop. Will they do this? I don't know. It will certainly be against their best interests. Think of it this way: if you held 50,000 bitcoins would you put them on MtGox and sell them at market?Another possibility is that OpenCoin will manage the price of XRP so that it grows slowly and in a sustainable way to prevent bubbles like what we saw with Bitcoin going to $266 then crashing to $50. People complain about Bitcoin's price stability all the time. With XRP's temporary central management, there is a solution. I don't know what they will do though.Let's be clear:

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LegendaryActivity: 1064Merit: 1001 Re: Ripple explained for Bitcoiners! May 20, 2013, 06:43:55 PM #10 Quote from: BTC Books on May 20, 2013, 06:36:23 PM Moderated threads about something like Ripple - pro or con - are pointless.

I prefer unmoderated threads but the problem is that a small handful of bad actors and one scammer have taken it upon themselves to flood otherwise useful threads with repetitive noise. This thread is my attempt to explain Ripple to people who actually want to understand it. For the Ripple-bashers there are plenty of other threads for that.



Ripple is a complicated piece of software. It is nothing like Bitcoin, which is simple and can be explained a 9 page research paper. There are a lot of misconceptions about it. I would like to clear up those misconceptions.



For the most part I will not be deleting many posts. However, anyone who comes here and repeats things that have already been stated (see my Facts post) is going to have their post removed. Sorry about that!

I prefer unmoderated threads but the problem is that a small handful of bad actors and one scammer have taken it upon themselves to flood otherwise useful threads with repetitive noise. This thread is my attempt to explain Ripple to people who actually want to understand it. For the Ripple-bashers there are plenty of other threads for that.Ripple is a complicated piece of software. It is nothing like Bitcoin, which is simple and can be explained a 9 page research paper. There are a lot of misconceptions about it. I would like to clear up those misconceptions.For the most part I will not be deleting many posts. However, anyone who comes here and repeats things that have already been stated (see my Facts post) is going to have their post removed. Sorry about that!

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DonatorLegendaryActivity: 1120Merit: 1001 Re: Ripple explained for Bitcoiners! May 20, 2013, 07:25:06 PM #14 People please keep in mind that the creator of XRP pre-mined 100% of the coins. And Ripple will be an open sourced system. Your XRP are very likely to lose value in the future. 16SvwJtQET7mkHZFFbJpgPaDA1Pxtmbm5P

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LegendaryActivity: 1064Merit: 1001 Re: Ripple explained for Bitcoiners! May 20, 2013, 07:38:57 PM #15 Quote from: zeroday on May 20, 2013, 07:02:36 PM Thanks for honest answer.

You're welcome! That's what this thread is for. Honest facts without the zealous rhetoric.



Quote In other words, XRP is FIAT cryptocurrency backed by OpenCoin. It can be trusted as long as you trust OpenCoin.

No. XRP is a cryptocurrency. No one can take away your XRP, no one can create new XRP, and no one can prevent you from sending or receiving XRP. (Note, this all assumes that the source code is published).



You won't have to trust OpenCoin to be able to use XRP (after the source code is released). However, for as long as OpenCoin still holds almost all of the XRP they will have a lot of control over the price. This may make XRP unsuitable as an investment. But this won't interfere with your ability to use Ripple for its other useful features.



Quote You may freely use both USD and XRP in decentralized trades until issuing authority sees that their interests are affected by your business. Am I correct?

No. USDs in Ripple are IOUs. A gateway promises to pay you actual USD in the future when you redeem the IOU. But XRP are built-in to the system. Gateways do not issue IOUs. You will always be able to send and receive XRPs, and no one can take away your XRPs (once the source code is released).

You're welcome! That's what this thread is for. Honest facts without the zealous rhetoric.No. XRP is a cryptocurrency. No one can take away your XRP, no one can create new XRP, and no one can prevent you from sending or receiving XRP. (Note, this all assumes that the source code is published).You won't have to trust OpenCoin to be able to use XRP (after the source code is released). However, for as long as OpenCoin still holds almost all of the XRP they will have a lot of control over the price. This may make XRP unsuitable as an investment. But this won't interfere with your ability to use Ripple for its other useful features.No. USDs in Ripple are IOUs. A gateway promises to pay you actual USD in the future when you redeem the IOU. But XRP are built-in to the system. Gateways do not issue IOUs. You will always be able to send and receive XRPs, and no one can take away your XRPs (once the source code is released).

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LegendaryActivity: 1064Merit: 1001 Re: Ripple explained for Bitcoiners! May 20, 2013, 07:40:39 PM #16 Quote from: HorseRider on May 20, 2013, 07:25:06 PM People please keep in mind that the creator of XRP pre-mined 100% of the coins. And Ripple will be an open sourced system.

Thanks, I added that to the "Facts" section.



Quote Your XRP are very likely to lose value in the future.

Like I said, XRPs are a risky investment! But you do not have to invest in XRP to get the other benefits of the Ripple system.



I'm leaving this up since it is not a repetition up to now but anyone who repeats that "XRPs will lose value" or brings up the pre-mine will have their post deleted.

Thanks, I added that to the "Facts" section.Like I said, XRPs are a risky investment! But you do not have to invest in XRP to get the other benefits of the Ripple system.I'm leaving this up since it is not a repetition up to now but anyone who repeats that "XRPs will lose value" or brings up the pre-mine will have their post deleted.