Re: Ripple

On 11/19/2013 03:01 PM, Arthur Britto wrote:
> 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).
> 
> 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).

Ah, I see. The flaw in my thinking then was assuming that the
transaction fee was fixed at 1 XRP. A variable amount based on consensus
makes much more sense, thanks. :)

I can now see that we're talking much longer timeframes for the Ripple
network than I had originally thought.

> 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.

The reason I suggested a short-term self-destructive currency was for
the mobile device/low-powered use case. You could have your other
devices (laptops, desktops, etc.) do the proof-of-work and store it w/
your XRP Ripple account. Your mobile device could then use the pooled
XRP before they vanished out of existence to do a transfer. I do admit
that it's a more complicated solution, and it doesn't address the "XRP
as a unit of direct exchange" and "XRP as a motivation for Ripple Labs
to make the network successful" use cases.

> 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.

True, but then the proof-of-work would just be raised to the level that
it's no longer profitable to operate those botnets. The only thing you
get to do by operating one of those botnets is to spam the network, and
I don't quite understand how one could gain financially from that,
except in really contrived situations like high-frequency trading.

In any case, proof-of-work isn't a replacement for the current XRP
scheme w/o it also being able to address the "XRP as a unit of direct
exchange" use case.

Ultimately, I think humanity will settle on "energy" as the unit of
direct exchange since that's the only really stable currency over the
long term. Tying a proof-of-work to energy generation or consumption
seems like a better solution than XRP and Bitcoin mining, I was just
curious if you guys had gone down that path yet or not.

What I'm hearing is that the creators of Ripple were practical in the
design of XRP. XRP is a "good enough" solution with some nice
side-effects for the initial creators, forex traders, and reduction of
code complexity.

-- 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/

Received on Wednesday, 20 November 2013 19:39:00 UTC