Re: Ripple

On Tue, Nov 19, 2013 at 11:48 AM, Manu Sporny <msporny@digitalbazaar.com>wrote:

> On 11/18/2013 04:08 PM, Evan Schwartz wrote:
> > 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, so let's split the requirement of XRP into two parts.
>
> 1) As a bridge currency
> 2) As a network attack prevention mechanism
>
> This email concerns the second item, which is as a network attack
> prevention mechanism.
>
> The most concerning downside about XRP that I can see is that there are
> a finite number of them (100B XRP, IIRC?). The probability that Ripple
> will last more than 30 years as a financial network is slim (not having
> done the math, but I'd imagine that ~3B transactions per year is being
> conservative wrt. the transaction volume that will happen over the
> network if it becomes popular). I do realize that many of these
> transactions may be rolled into one to support pseudo-anonymous
> transactions, but if Ripple is successful, maybe many would not choose
> to roll the transactions into one and may eat to the XRP space at an
> accelerated pace?
>

The transaction fee is set by network consensus and can be lowered. There
should be enough XRP to last for thousands of years. The greatest loss of
XRP happens due to lost funds (lost passwords).


> All that to ask, did the creators of Ripple consider a proof-of-work and
> a self-destructive short term currency as the attack prevention mechanism?
>

Proof-of-work was considered. In particular, proof-of-work is poor for
mobile devices. The current mechanism is exceedingly simple. Adding another
currency would be more complicated.


> That is, whenever you submit a payment to the network, you have to do a
> proof-of-work for the network to accept it as a valid transaction. You
> can cache these proofs-of-work up to one day in advance (that is,
> "cached XRP" once created, vanishes from existence in a day if it goes
> unused). This lifts the 100B XRP limit while providing a network attack
> mitigation technique.
>

Proof-of-work could likely be used in someway. But, it is possible for bad
actors to easily generate proof-of-work through hijacking web site client
machines to do the work via JavaScript and through botnets.

-Arthur