Re: Ripple

So, as much as I might personally like to continue this vein of
conversation, I think we're straying farther into the economics of XRP than
I can really speak to.

The way the system stands now is that there are 100 billion XRP, that's all
there'll ever be, and it's not in our or anyone else's power to change that
now. Ripple Labs plans to distribute more than 50 billion of those through
giveaways and promotions. All of the software is open source so anyone is
free to create a different network governed by different rules.

That being said, we think that the Ripple network as it stands now offers
the potential to federate different payment systems, facilitate easier,
cheaper, and faster flows of money than has ever been possible before, and
all while keeping the state of everyone's balances secure and preventing
spam.

If anyone is interested in watching the talks that myself and some of the
others at Ripple Labs gave at the Money2020 conference explaining various
parts of the Ripple network you can find them here:
https://ripple.com/blog/ripple-developer-conference-2013-replay/

   - Chris Larsen, the CEO, gave a general
overview<https://www.youtube.com/watch?v=oGribd0RnFc>
   - I gave a technical overview<https://www.youtube.com/watch?v=Siim2SmLFLc>
   - David Schwartz, the chief cryptographer, gave a talk about architecture
   and advanced users <https://www.youtube.com/watch?v=NtmPy-0gxWI>
   - and Stefan Thomas, the CTO, gave a talk about the future focus of the
   engineering team <https://www.youtube.com/watch?v=-aDiI9e4KoE>

If anyone has more questions about the technical setup of the network or
how it might be used in conjunction with the work this group is doing, I'd
be more than happy to try to take a stab at them.

Evan


On Mon, Nov 18, 2013 at 4:39 PM, Joseph Potvin <jpotvin@opman.ca> wrote:

> RE: If there weren't some fixed amount of XRP in the system from the
> beginning, how would you propose making it appear and disappear?
>
> The same way you developers made the XRP appear: "poof". There they are!
> Welcome to fiat money. The same way my mortgage company created the CAD$ to
> finance my entitlement to a house: "poof". They pretended they "lent" me
> money that they had prior to issuing the mortgage. And I pretended to go
> along with the gag. But before the loan, those CAD$ simply did not exist.
> Same with any loan, credit card, or line of credit, from a fiat-based
> financial institution. Fiat money is conjured into existence.
>
> RE: Who would control that and determine what "as needed" means?
>
> An algorithm could conjure XRPs into and out of existence in any
> proportion needed to facilitate the velocity of Ripple transactions.  What
> do you think Ben Bernanke et al have been doing?
>
> RE: Also, what exactly would be the benefit from pegging the value of XRP
> to something outside of the network? How would that make it a better unit
> of account than if it's just a digital currency whose value in terms of
> other currencies is just set by the market?
>
> (a) I haven't see a "unit of account" use case for XRPs.  I do see a
> "medium of exchange" use case in web payments.
> (b) The "set by the market" is what I was asking you about earlier. It's
> not really a market in its own right. Even A3, the flesh and blood person
> would really just make guesses that combine what my A1 algorithm and A2
> algorithm were linking to. While there is a supply and demand market for
> currencies, its operation is completely overwhelmed by the speculative
> market that operates for the most part in an opposite way than the supply
> and demand market. It's certainly not anything like the markets for copper,
> or car repair services or bananas.
>
> RE: The use case for people holding XRP is the same as the reason people
> are holding (and buying copious amounts of) bitcoin. It's an asset that may
> rise (and fall) in value
>
> And in both cases, those are pure speculation plays.  I propose that XRP
> has a use case other than speculation, and to the extent it's given a
> speculative character, that's an unnecessary and even possibly a flaw
> that's harmful to the operational advatanges of Ripple. Suppose some
> community takes the free/libre code and sets up Zipple, which maintains
> just enough ZRPs to handle the variable transaction need for web payments,
> but otherwise maintains no stock of ZRPs?  Say the operator earns its
> income on a transaction fee modelled on the Tobin Tax.  Would that be less
> useful to the transacting parties in web payments?
>
> Joseph Potvin
>
>
>
>
> On Mon, Nov 18, 2013 at 7:09 PM, Evan Schwartz <evan@ripple.com> wrote:
>
>> If there weren't some fixed amount of XRP in the system from the
>> beginning, how would you propose making it appear and disappear? Who would
>> control that and determine what "as needed" means?
>>
>> Also, what exactly would be the benefit from pegging the value of XRP to
>> something outside of the network? How would that make it a better unit of
>> account than if it's just a digital currency whose value in terms of other
>> currencies is just set by the market?
>>
>> The use case for people holding XRP is the same as the reason people are
>> holding (and buying copious amounts of) bitcoin. It's an asset that may
>> rise (and fall) in value, our intention is to focus on making the payment
>> highly useful but some people may get into it just to speculate on XRP.
>> We're envisioning that more people who are holding XRP will be using it to
>> facilitate exchanges between XRP and all of the other currencies on the
>> network.
>>
>>
>> On Mon, Nov 18, 2013 at 1:52 PM, Joseph Potvin <jpotvin@opman.ca> wrote:
>>
>>> Thanks Evan. It's certainly an interesting "thing". Please permit me to
>>> pursue the XRP a little further to be clear about what sort of thing it is.
>>> Money has three essential use cases: (1) a medium of exchange, (2) a
>>> unit of account, (3) a standard of deferred payment (requiring that it
>>> be a stable store of value). It seems to me that XRP has only one
>>> defensible use case, which is to be a hyper-efficient medium of exchange
>>> for web payments. I see no use case at all for it being treated a unit of
>>> account (hence my quip about saying it might as well be declared equal in
>>> value to a banana), and I see no use case for it being treated as a store
>>> of value (also why I chose the banana, which has a well-known short
>>> half-life).
>>>
>>> Why is the XRP not designed to just appear and disappear as needed, like
>>> a synthetic element in the periodic table. What's the use case for anyone
>>> or for Ripple Labs to "hold" any XRPs?
>>>
>>> Borrowing from someone else's thought: If XRP currently trades for ~100
>>> XRP per 1 USD then 50 billion XRP retained by Ripple Labs and its investors
>>> is currently valued at 500 million USD in "goodwill". The only use case I
>>> can think of for that is to make Ripple Labs and its investors really happy
>>> as long as it lasts. I'm not against anyone making a bunch of money on
>>> creativity and carrying risk, but that's a separate matter. Is there any
>>> use case in that big stock of XRP from the perspective of the parties to
>>> web payments?
>>>
>>> Joseph Potvin
>>>
>>> On Mon, Nov 18, 2013 at 4:08 PM, Evan Schwartz <evan@ripple.com> wrote:
>>>
>>>> ripplescam.org actually hasn't posted anything since Ripple was open
>>>> sourced in September. The fact that the rippled code wasn't immediately
>>>> open sourced seems to have been the main gripe there.
>>>>
>>>> The purpose of having XRP in the network as an asset is twofold: first
>>>> it helps bridge between different currencies and second it's used for very
>>>> small transaction fees that help prevent people from spamming the network.
>>>>
>>>> Right now the transaction fees are worth something like .0000001 USD so
>>>> most users won't notice them much, but it adds up quickly if you're trying
>>>> to spam the ledger or the network with junk transactions. In order to do
>>>> transactions on the network you need to be holding some XRP, so it needs to
>>>> be a "holdable" asset.
>>>>
>>>> When you "pay" the fee though we're not collecting that money, rather
>>>> it is being destroyed by the network (which has the effect of slightly
>>>> raising the value of everyone's XRP, so you're paying your fee to all of
>>>> the network users). This is why the fee currency needs to be internal to
>>>> the network so it can actually destroy some amount. If you go to
>>>> https://ripple.com/graph/ you can see in the top left how many total
>>>> XRP there are still in the network.
>>>>
>>>> Does that make sense?
>>>>
>>>>
>>>> On Mon, Nov 18, 2013 at 11:42 AM, Joseph Potvin <jpotvin@opman.ca>wrote:
>>>>
>>>>> RE: Ripple Labs isn't playing a hoarding game but
>>>>>
>>>>> I don't have any opinion on that at this point, but some people think
>>>>> it is: http://ripplescam.org/  (Sorry if posting that link seems
>>>>> aggressive. That's not my intent. It's out there and shows up in searches,
>>>>> so I'm just being forthcoming.)
>>>>>
>>>>> RE: "The value of 1 XRP matters to currency traders, Ripple Labs, and
>>>>> anyone else holding XRP as an asset. "
>>>>>
>>>>> That seems entirely unnecessary to me, and a "bug" in the current
>>>>> business architecture of Ripple. Why permit the holding of XRPs at all? In
>>>>> the grand scheme of things, what's the value added from their persistence?
>>>>> I still advocate for 1 XRP = 1 banana, compared with the XRP's current
>>>>> design. (To see where I'm actually coming from, see:
>>>>> http://www.bengrahaminvesting.ca/Outreach/2009_Symposium.htm and
>>>>> http://www.theglobeandmail.com/globe-investor/investment-ideas/commodities-as-a-global-currency/article1346127/
>>>>> ...although even more I prefer an "Earth Reserve" base, which I and some
>>>>> colleagues are working on.)  Meanwhile the private consortium aspect of The
>>>>> Fed is hardly something to be replicated -- the more successful Ripple
>>>>> becomes, the more suspicion and "divergent" interests it will attract. It
>>>>> fear it would become the monetary instantiation of The Peter Principle.
>>>>>
>>>>> In any case, the value of a BTC or an XRP is nothing more than brand
>>>>> loyalty, what the accountants call the value of "goodwill", since any
>>>>> number of parallel currencies just like them can be created.
>>>>>
>>>>> Joseph Potvin
>>>>>
>>>>>
>>>>> On Mon, Nov 18, 2013 at 1:56 PM, Evan Schwartz <evan@ripple.com>wrote:
>>>>>
>>>>>> Q1: What is it about the A's role, and about the B's role that
>>>>>>> positions all the A's as currency price makers, and all the B's as currency
>>>>>>> price takers?
>>>>>>
>>>>>>
>>>>>> Only that the A's have put out offers on the books. Anyone can create
>>>>>> an offer and it'll be treated equally to anyone else's. In practice we
>>>>>> expect that certain users will use the system primarily for currency
>>>>>> trading so you'll see a lot more offers put out by those but as far as the
>>>>>> system is concerned all accounts have the same potential functionality.
>>>>>>
>>>>>>
>>>>>> Q2: In this model, what are the criteria and information sources that
>>>>>>> A1, A2 and A3 are assumed to use when offering their preferred amounts of
>>>>>>> EUR to buy those USD? Anything and everything available to them, correct?
>>>>>>>
>>>>>> Yes. They have access to the same network data about existing offers
>>>>>> as everyone else.
>>>>>>
>>>>>>
>>>>>>
>>>>>> Q: Can a machine register to and participate in Ripple? Or do all
>>>>>>> Ripple members need to be flesh&blood people. Is it possible for a machine
>>>>>>> to join Ripple as if it were a flesh&blood person, and if it did, would the
>>>>>>> Ripple system or team know or care?  Today, what's the proportion of
>>>>>>> machine accounts to flesh&blood accounts amongst Ripple subscribers?
>>>>>>
>>>>>>
>>>>>> People can definitely create bots that trade on Ripple. I'm not sure
>>>>>> it would be possible in any system to stop this from happening and I'm also
>>>>>> not entirely sure that we'd want to. Modern currency trading seems to be
>>>>>> more of a machine's game but what we're hoping for is that any human or
>>>>>> machine traders on the network will facilitate very cheap exchanges between
>>>>>> currencies, which will let basic users do cross-currency payments at a
>>>>>> fraction of the cost and time it takes now.
>>>>>>
>>>>>>
>>>>>> Okay, and this order book is determined by all the offers from A1, A2
>>>>>>> and A3, however that plays out. Correct?
>>>>>>>
>>>>>> Yes.
>>>>>>
>>>>>>
>>>>>> Q: How does an EUR→XRP rate and an XRP→USD rate play into all of
>>>>>>> this?  Here's what I presume, correct me if I'm wrong...
>>>>>>>
>>>>>>> RE:  Transactions can and often do take multiple paths to get the
>>>>>>> best rate
>>>>>>>
>>>>>>> A path is a series of trades underway at a given time, correct, such
>>>>>>> as USD→CAD with CAD→EUR to get a USD→EUR trade.  And where a suitable path
>>>>>>> can't be found, the Ripple algorithm will insert XRP. Correct? XRP always
>>>>>>> fills in gaps.
>>>>>>>
>>>>>> In order to do a USD -> EUR trade the system will look at direct USD
>>>>>> -> EUR paths, USD -> XRP -> EUR paths, and I believe some more indirect
>>>>>> ones as well. XRP is meant to fill in those gaps so that you don't actually
>>>>>> need people trading on all of the possible pairs of currencies.
>>>>>>
>>>>>>
>>>>>>
>>>>>> Q:  Does the value of 1 XRP matter?  As mere gap-filler, I don't
>>>>>>> think so.  XRP is just grease. Am I wrong?  In what context does the value
>>>>>>> of 1 XRP really matter?
>>>>>>
>>>>>>
>>>>>> The value of 1 XRP matters to currency traders, Ripple Labs, and
>>>>>> anyone else holding XRP as an asset. For anyone using the system to make a
>>>>>> payment the value of XRP won't really matter because their money isn't "in"
>>>>>> XRP for any real period of time like it would be with Bitcoin if someone
>>>>>> made a payment USD -> BTC -> EUR outside of the Ripple network. Payments
>>>>>> are either executed in atomic time or they'll fail if the rates have
>>>>>> changed dramatically between the time when a price was quoted and when the
>>>>>> user decided to execute it.
>>>>>>
>>>>>>
>>>>>> Q: Why not set the purchasing power of 1 XRP to the tangible market
>>>>>>> price of 1 banana?
>>>>>>>
>>>>>>> The 100 billion XRP's would thus be valued at about a dozen
>>>>>>> container ships of bananas
>>>>>>> http://www.bloomberg.com/news/2013-05-29/maersk-s-8-4-billion-bananas-add-to-ship-profits-freight.html
>>>>>>> I jest, of course. But my fundamental point here is that if XRP were tied
>>>>>>> to something tangible, RippleLabs would be trusted not to be playing some
>>>>>>> sort of massive hoarding game. XRP would be understood to be just grease.
>>>>>>> ...or bananas.
>>>>>>>
>>>>>> Ripple Labs isn't playing a hoarding game but we are hoping that the
>>>>>> price of XRP, and thus the 25 billion XRP that the company is using to
>>>>>> sustain itself, appreciates in value. I think most of the people in the
>>>>>> company would agree with Jeffrey Cliff's earlier comment. We only make
>>>>>> money if the network we've built and are continuing to improve provides a
>>>>>> useful service for people.
>>>>>>
>>>>>>
>>>>>> Is this "end user" a price taker?  I'm always interested in the price
>>>>>>> makers.
>>>>>>>
>>>>>> When I say end user I'm generally talking about price takers / people
>>>>>> trying to make payments
>>>>>>
>>>>>>
>>>>>> More questions?
>>>>>>
>>>>>>
>>>>>> On Mon, Nov 18, 2013 at 3:30 AM, Joseph Potvin <jpotvin@opman.ca>wrote:
>>>>>>
>>>>>>> Hello Evan, Thanks for this!
>>>>>>>
>>>>>>> RE: If you want to see all of the outstanding offers for any
>>>>>>> currency pair you can do that directly in the client.
>>>>>>>
>>>>>>> So, I see in my UML mind a stickman, whose role is labelled: [Fill
>>>>>>> in blank, referred to here as A]. There's another one: [Fill in blank,
>>>>>>> referred to here as B].  Let's say A1, A2 and A3 each want some USD, and
>>>>>>> each is offering their preferred amounts of EUR to buy those USD.  Let's
>>>>>>> say B wants some EUR, and so...
>>>>>>>
>>>>>>> RE: the path finding engine will search direct and indirect paths
>>>>>>> for the rate that is best for the initiator.
>>>>>>>
>>>>>>> So the path finding engine discovers that A2 is offering B the best
>>>>>>> rate.
>>>>>>>
>>>>>>> Q1: What is it about the A's role, and about the B's role that
>>>>>>> positions all the A's as currency price makers, and all the B's as currency
>>>>>>> price takers?
>>>>>>>
>>>>>>> Q2: In this model, what are the criteria and information sources
>>>>>>> that A1, A2 and A3 are assumed to use when offering their preferred amounts
>>>>>>> of EUR to buy those USD? Anything and everything available to them,
>>>>>>> correct?
>>>>>>>
>>>>>>> Now, the following observation is not meant in any way to challenge
>>>>>>> Ripple. It's only meant to acknowledge the environment within which Ripple
>>>>>>> and all the A's and all the B's have to live, for the time being. This is
>>>>>>> the $5.3 trillion / day forex ecosystem dominated by top predators:
>>>>>>>
>>>>>>>
>>>>>>> http://www.bloomberg.com/news/2013-10-04/swiss-regulator-probes-alleged-foreign-exchange-manipulation.html
>>>>>>>
>>>>>>> http://www.usatoday.com/story/money/business/2013/11/15/foreign-exchange-trading-investigation/3573499/
>>>>>>>
>>>>>>> http://www.theguardian.com/business/2013/oct/30/barclays-cooperating-investigation-manipulation-currency-markets
>>>>>>> "Treasury's War" by Juan Zarate
>>>>>>>
>>>>>>> http://www.publicaffairsbooks.com/publicaffairsbooks-cgi-bin/display?book=9781610391153
>>>>>>> "Currency Wars" by James Rickards
>>>>>>>
>>>>>>> http://www.us.penguingroup.com/nf/Book/BookDisplay/0,,9781591844495,00.html
>>>>>>>
>>>>>>> In this ecosystem, then, I'm wondering from where it is assumed that
>>>>>>> A1, A2 and A3 get their information to offer their preferred amounts of EUR
>>>>>>> to buy USD? Let's structure this directly:  Let's say that A1 and A2 are
>>>>>>> machines running unique forex algorithms, and leave A3 as a flesh&blood
>>>>>>> person. So A3 is somebody who "watches the forex market" and reckons that
>>>>>>> some amount of EURs for USD is a good bet this afternoon.
>>>>>>>
>>>>>>> Q: Can a machine register to and participate in Ripple? Or do all
>>>>>>> Ripple members need to be flesh&blood people. Is it possible for a machine
>>>>>>> to join Ripple as if it were a flesh&blood person, and if it did, would the
>>>>>>> Ripple system or team know or care?  Today, what's the proportion of
>>>>>>> machine accounts to flesh&blood accounts amongst Ripple subscribers?
>>>>>>>
>>>>>>> Let's focus on A1 and A2 machines. What are the most important data
>>>>>>> feeds that each machine's algorithm might be coded to draw upon in order to
>>>>>>> generate their EUR-for-USD offers at any given moment?  Let's say A1 is
>>>>>>> designed to statistically interpret the WM-Reuters spot rate
>>>>>>> http://www.wmcompany.com/pdfs/026808.pdf and is able to project it
>>>>>>> correctly by a few hours 60 per cent of the time. And lets say A2 is
>>>>>>> designed as "a news-trading algorithm. The computer will not be interested
>>>>>>> at all in long-term value considerations. It will look at semantic
>>>>>>> relations in news announcements"
>>>>>>>
>>>>>>> http://www.lgt-cm.com/shared/.content/publikationen/$verwaltung_publikationen/sciene/The-self-organization-of-markets-LGT-working-paper-v2-1_en.pdf
>>>>>>>
>>>>>>> RE: "Regarding the order book and exchange rates, the order book is
>>>>>>> public and is one of the pieces of information the system uses consensus to
>>>>>>> determine."
>>>>>>>
>>>>>>> Okay, and this order book is determined by all the offers from A1,
>>>>>>> A2 and A3, however that plays out. Correct?
>>>>>>>
>>>>>>> Q: How does an EUR→XRP rate and an XRP→USD rate play into all of
>>>>>>> this?  Here's what I presume, correct me if I'm wrong...
>>>>>>>
>>>>>>> RE:  Transactions can and often do take multiple paths to get the
>>>>>>> best rate
>>>>>>>
>>>>>>> A path is a series of trades underway at a given time, correct, such
>>>>>>> as USD→CAD with CAD→EUR to get a USD→EUR trade.  And where a suitable path
>>>>>>> can't be found, the Ripple algorithm will insert XRP. Correct? XRP always
>>>>>>> fills in gaps.
>>>>>>>
>>>>>>> Q:  Does the value of 1 XRP matter?  As mere gap-filler, I don't
>>>>>>> think so.  XRP is just grease. Am I wrong?  In what context does the value
>>>>>>> of 1 XRP really matter?
>>>>>>>
>>>>>>> The system is not designed for XRP hoarding, like BTC hoarding is
>>>>>>> done and even encouraged. It seems to me that XRP does what economists do:
>>>>>>> "Lets assume that this in-between trade did exist to complete the path."
>>>>>>> Then act as if it does. I don't mean to criticize -- it's a clever thing to
>>>>>>> do. But some have expressed concern that Ripple Labs is hoarding all the
>>>>>>> XRP, and that they will increase in value. So how about this:
>>>>>>>
>>>>>>> Q: Why not set the purchasing power of 1 XRP to the tangible market
>>>>>>> price of 1 banana?
>>>>>>>
>>>>>>> The 100 billion XRP's would thus be valued at about a dozen
>>>>>>> container ships of bananas
>>>>>>> http://www.bloomberg.com/news/2013-05-29/maersk-s-8-4-billion-bananas-add-to-ship-profits-freight.html
>>>>>>> I jest, of course. But my fundamental point here is that if XRP were tied
>>>>>>> to something tangible, RippleLabs would be trusted not to be playing some
>>>>>>> sort of massive hoarding game. XRP would be understood to be just grease.
>>>>>>> ...or bananas.
>>>>>>>
>>>>>>> RE:  all the end user really needs to know about is the amount it'll
>>>>>>> cost them in the currencies they have to send some amount in another
>>>>>>> currency to someone else
>>>>>>>
>>>>>>> Is this "end user" a price taker?  I'm always interested in the
>>>>>>> price makers.
>>>>>>> Joseph Potvin
>>>>>>>
>>>>>>>
>>>>>>>
>>>>>>> On Sun, Nov 17, 2013 at 10:36 PM, Evan Schwartz <evan@ripple.com>wrote:
>>>>>>>
>>>>>>>> Hi all,
>>>>>>>>
>>>>>>>> I am one of the engineers at Ripple Labs. I've been with the
>>>>>>>> company for 3 months so I can speak to a fair number of these points but
>>>>>>>> for the nitty gritty details of how consensus works I'll bring our chief
>>>>>>>> cryptographer David Schwartz into the conversation.
>>>>>>>>
>>>>>>>> Regarding the order book and exchange rates, the order book is
>>>>>>>> public and is one of the pieces of information the system uses consensus to
>>>>>>>> determine. If you want to see all of the outstanding offers for any
>>>>>>>> currency pair you can do that directly in the client.
>>>>>>>>
>>>>>>>> When someone wants to make a trade or do a cross currency payment
>>>>>>>> the path finding engine will search direct and indirect paths for the rate
>>>>>>>> that is best for the initiator. If you want to see visuals of these paths
>>>>>>>> happening you can go to ripple.com/graph and click on a
>>>>>>>> transaction entry to see a visualization of the paths. Transactions can and
>>>>>>>> often do take multiple paths to get the best rate but all the end user
>>>>>>>> really needs to know about is the amount it'll cost them in the currencies
>>>>>>>> they have to send some amount in another currency to someone else. If you
>>>>>>>> take a look at the Send tab in the client and have a couple of different
>>>>>>>> currencies in your wallet you can see this functionality in action.
>>>>>>>>
>>>>>>>> Happy to try to answer any more questions you all have, I think
>>>>>>>> there's a lot of opportunity for collaboration between Ripple and this
>>>>>>>> group.
>>>>>>>>
>>>>>>>> Evan
>>>>>>>> On Nov 17, 2013 3:25 PM, "Joseph Potvin" <jpotvin@opman.ca> wrote:
>>>>>>>>
>>>>>>>>> Thanks,
>>>>>>>>>
>>>>>>>>> RE: it has an order book and the market determines the price
>>>>>>>>>
>>>>>>>>> How exactly?  And is the order book and associated process
>>>>>>>>> documented somewhere? I'd love to see the UML sequence or activity diagram,
>>>>>>>>> for example, but text will do.
>>>>>>>>>
>>>>>>>>> Is the general user experience that of a price-maker or
>>>>>>>>> price-taker? A currency "price maker" is asked to bid. A currency "price
>>>>>>>>> taker" is shown a rate as a fait-accompli.  And does the user make or take
>>>>>>>>> the intermediate XRP rate, or the destination currency rate?  (i.e. If Fred
>>>>>>>>> pays CAD to a vendor who wants to receive USD, he'd want to make or take
>>>>>>>>> the CAD-USD rate. The CAD-XRP then the XRP-USD rates would be invisible and
>>>>>>>>> of no concern to him.)
>>>>>>>>>
>>>>>>>>> Joseph
>>>>>>>>>
>>>>>>>>>
>>>>>>>>>
>>>>>>>>> On Sun, Nov 17, 2013 at 5:26 PM, Melvin Carvalho <
>>>>>>>>> melvincarvalho@gmail.com> wrote:
>>>>>>>>>
>>>>>>>>>>
>>>>>>>>>>
>>>>>>>>>>
>>>>>>>>>> On 17 November 2013 23:24, Joseph Potvin <jpotvin@opman.ca>wrote:
>>>>>>>>>>
>>>>>>>>>>> Melvin, Can you point to the specific documentation about how
>>>>>>>>>>> Ripple determines XRP inter-currency spot exchange rates with all the
>>>>>>>>>>> central bank currencies,and for BTC? And is there a documented policy for
>>>>>>>>>>> choosing the official source of exchange rate data for any other present or
>>>>>>>>>>> future alt crypto currency out there would be added to the Ripple portfolio
>>>>>>>>>>> of currencies?
>>>>>>>>>>>
>>>>>>>>>>
>>>>>>>>>> AFIAK it doesnt use a spot rate, it has an order book and the
>>>>>>>>>> market determines the price.
>>>>>>>>>>
>>>>>>>>>>
>>>>>>>>>>>
>>>>>>>>>>> Tx,
>>>>>>>>>>>
>>>>>>>>>>> Joseph Potvin
>>>>>>>>>>>
>>>>>>>>>>>
>>>>>>>>>>>
>>>>>>>>>>> On Sun, Nov 17, 2013 at 4:32 PM, Melvin Carvalho <
>>>>>>>>>>> melvincarvalho@gmail.com> wrote:
>>>>>>>>>>>
>>>>>>>>>>>>
>>>>>>>>>>>>
>>>>>>>>>>>>
>>>>>>>>>>>> On 17 November 2013 22:27, Fabio Barone <holon.earth@gmail.com>wrote:
>>>>>>>>>>>>
>>>>>>>>>>>>> I should do this as a homework, I apologize,
>>>>>>>>>>>>>  but I'm currently pretty busy.
>>>>>>>>>>>>>
>>>>>>>>>>>>> Would someone be so kind and answering these questions about
>>>>>>>>>>>>> Ripple:
>>>>>>>>>>>>>  - Is the code open source?
>>>>>>>>>>>>>
>>>>>>>>>>>>
>>>>>>>>>>>> Yes
>>>>>>>>>>>>
>>>>>>>>>>>>
>>>>>>>>>>>>> - Is the protocol they use openly documented,
>>>>>>>>>>>>>   as openly as bitcoin is?
>>>>>>>>>>>>>
>>>>>>>>>>>>
>>>>>>>>>>>> I can only answer this superficially as I've not written a web
>>>>>>>>>>>> ripple implementation (yet)
>>>>>>>>>>>>
>>>>>>>>>>>> But it seems to be yes: https://ripple.com/wiki/
>>>>>>>>>>>>
>>>>>>>>>>>> You only ever know after you've drilled down into every last
>>>>>>>>>>>> detail ... something I plan to do next year ...
>>>>>>>>>>>>
>>>>>>>>>>>>
>>>>>>>>>>>>>
>>>>>>>>>>>>> thanks
>>>>>>>>>>>>>
>>>>>>>>>>>>>
>>>>>>>>>>>>> 2013/11/17 Manu Sporny <msporny@digitalbazaar.com>
>>>>>>>>>>>>>
>>>>>>>>>>>>>> On 11/14/2013 04:30 PM, Andrew Miller wrote:
>>>>>>>>>>>>>>
>>>>>>>>>>>>>>> 2. But this doesn't work for public/anonymous networks.
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>
>>>>>>>>>>>>>> Why doesn't it work for public/anonymous networks? Link? This
>>>>>>>>>>>>>> is Web of
>>>>>>>>>>>>>> Trust stuff we're talking about, isn't it (chained trust
>>>>>>>>>>>>>> metrics)?
>>>>>>>>>>>>>>
>>>>>>>>>>>>>>
>>>>>>>>>>>>>>  3. Ripple, on the other hand, takes yet another approach.
>>>>>>>>>>>>>>> There's no
>>>>>>>>>>>>>>> global administrator, but nor is there a well-understood
>>>>>>>>>>>>>>> public
>>>>>>>>>>>>>>> competition. Instead, individual users are supposed to
>>>>>>>>>>>>>>> configure
>>>>>>>>>>>>>>> their clients to identify particular servers they have
>>>>>>>>>>>>>>> determined
>>>>>>>>>>>>>>> they trust.
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>
>>>>>>>>>>>>>> Isn't this a good thing? If you allow anyone to pick who they
>>>>>>>>>>>>>> trust, you
>>>>>>>>>>>>>> force cooperation in the system, don't you? The idea being
>>>>>>>>>>>>>> that for the
>>>>>>>>>>>>>> system to be useful, people need to coordinate and thus won't
>>>>>>>>>>>>>> pick
>>>>>>>>>>>>>> participants with whom they entirely disagree with.
>>>>>>>>>>>>>>
>>>>>>>>>>>>>>
>>>>>>>>>>>>>>  Here's where it gets really murky, and I can't figure out
>>>>>>>>>>>>>>> any set of
>>>>>>>>>>>>>>> assumptions that actually lead to robust functioning of the
>>>>>>>>>>>>>>> network.
>>>>>>>>>>>>>>> What if users entirely disagree with which servers they
>>>>>>>>>>>>>>> trust?
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>
>>>>>>>>>>>>>> Why would someone deliberately do this? If you have to pick
>>>>>>>>>>>>>> from 32
>>>>>>>>>>>>>> servers, why would you pick from 32 servers that are in a
>>>>>>>>>>>>>> completely
>>>>>>>>>>>>>> different trust set? It would be incredibly difficult to do
>>>>>>>>>>>>>> that in a
>>>>>>>>>>>>>> dependency chain based system, wouldn't it?
>>>>>>>>>>>>>>
>>>>>>>>>>>>>>
>>>>>>>>>>>>>>  Are they on two different networks or the same one?
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>
>>>>>>>>>>>>>> No idea.
>>>>>>>>>>>>>>
>>>>>>>>>>>>>>
>>>>>>>>>>>>>>  If an individual doesn't do their due diligence, and
>>>>>>>>>>>>>>> carelessly
>>>>>>>>>>>>>>> approves bad servers, are they individually affected or does
>>>>>>>>>>>>>>> it
>>>>>>>>>>>>>>> affect the overall network?
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>
>>>>>>>>>>>>>> I'd expect that in the worst case, the overall network
>>>>>>>>>>>>>> suffers. However,
>>>>>>>>>>>>>> the likelihood of this is in the 51% attack against the
>>>>>>>>>>>>>> Bitcoin network
>>>>>>>>>>>>>> category, isn't it?
>>>>>>>>>>>>>>
>>>>>>>>>>>>>>
>>>>>>>>>>>>>>  I really wish more people were looking into this rather than
>>>>>>>>>>>>>>> ignoring
>>>>>>>>>>>>>>> it, because I suspect it's not sound (although I haven't
>>>>>>>>>>>>>>> come up with
>>>>>>>>>>>>>>> a super clear explanation why not), and if the underlying
>>>>>>>>>>>>>>> assumptions
>>>>>>>>>>>>>>> aren't sound then does it matter if the frontend UI is great?
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>
>>>>>>>>>>>>>> Well, yeah, if the algorithm is broken then no UI in the
>>>>>>>>>>>>>> world is going
>>>>>>>>>>>>>> to save it. However, I don't think you've explained quite why
>>>>>>>>>>>>>> Ripple's
>>>>>>>>>>>>>> consensus algorithm is broken. Why is allowing individuals to
>>>>>>>>>>>>>> pick whom
>>>>>>>>>>>>>> they trust a bad thing (when the number of servers is large
>>>>>>>>>>>>>> enough)?
>>>>>>>>>>>>>>
>>>>>>>>>>>>>>
>>>>>>>>>>>>>>  Unfortunately the only set of assumptions I can think of
>>>>>>>>>>>>>>> that lead
>>>>>>>>>>>>>>> to this actually working is where every one essentially
>>>>>>>>>>>>>>> picks the
>>>>>>>>>>>>>>> same default list, and the servers on that list are actually
>>>>>>>>>>>>>>> trustworthy.
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>
>>>>>>>>>>>>>> I think the problem surfaces when a group of servers create a
>>>>>>>>>>>>>> trust set
>>>>>>>>>>>>>> that has no intersection with another set of servers. With
>>>>>>>>>>>>>> that said,
>>>>>>>>>>>>>> why would anyone do this? What's the attack?
>>>>>>>>>>>>>>
>>>>>>>>>>>>>>
>>>>>>>>>>>>>>  This is the "centralized" option, where the default list
>>>>>>>>>>>>>>> determines
>>>>>>>>>>>>>>> who participates, and no user has any incentive to deviate
>>>>>>>>>>>>>>> from the
>>>>>>>>>>>>>>> default list, either by adding some newcomer they
>>>>>>>>>>>>>>> individually trust
>>>>>>>>>>>>>>> or by removing default servers they don't trust.
>>>>>>>>>>>>>>>
>>>>>>>>>>>>>>
>>>>>>>>>>>>>> I thought that only a subset of the list needs to be trusted
>>>>>>>>>>>>>> for Ripple
>>>>>>>>>>>>>> to function, and all trust sets that all servers choose have
>>>>>>>>>>>>>> to overlap
>>>>>>>>>>>>>> by at least a small degree. Is that not true?
>>>>>>>>>>>>>>
>>>>>>>>>>>>>>
>>>>>>>>>>>>>> -- manu
>>>>>>>>>>>>>>
>>>>>>>>>>>>>> --
>>>>>>>>>>>>>> Manu Sporny (skype: msporny, twitter: manusporny, G+: +Manu
>>>>>>>>>>>>>> Sporny)
>>>>>>>>>>>>>> Founder/CEO - Digital Bazaar, Inc.
>>>>>>>>>>>>>> blog: Meritora - Web payments commercial launch
>>>>>>>>>>>>>> http://blog.meritora.com/launch/
>>>>>>>>>>>>>>
>>>>>>>>>>>>>>
>>>>>>>>>>>>>
>>>>>>>>>>>>>
>>>>>>>>>>>>
>>>>>>>>>>>
>>>>>>>>>>>
>>>>>>>>>>> <http://goo.gl/Ssp56>
>>>>>>>>>>>
>>>>>>>>>>
>>>>>>>>>>
>>>>>>>>>
>>>>>>>>>
>>>>>>>
>>>>>>>
>>>>>>> <http://goo.gl/Ssp56>
>>>>>>>
>>>>>>
>>>>>>
>>>>>>
>>>>>> --
>>>>>> Evan Schwartz
>>>>>> Developer + Technology Pioneer
>>>>>> Ripple Labs Inc.
>>>>>>
>>>>>>
>>>>>>
>>>>
>>>>
>>>> --
>>>> Evan Schwartz
>>>> Developer + Technology Pioneer
>>>> Ripple Labs Inc.
>>>>
>>>>
>>>>
>>>
>>>
>>>
>>> <http://goo.gl/Ssp56>
>>>
>>
>>
>>
>> --
>> Evan Schwartz
>> Developer + Technology Pioneer
>> Ripple Labs Inc.
>>
>>
>>
>
>
> --
> Joseph Potvin
> Operations Manager | Gestionnaire des opérations
> The Opman Company | La compagnie Opman
> http://www.projectmanagementhotel.com/projects/opman-portfolio
> jpotvin@opman.ca
> Mobile: 819-593-5983
> LinkedIn (Google short URL): http://goo.gl/Ssp56
>



-- 
Evan Schwartz
Developer + Technology Pioneer
Ripple Labs Inc.