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Re: Stellar launches - Ripple-like decentralized ledger

From: Joseph Potvin <jpotvin@opman.ca>
Date: Thu, 18 Feb 2016 06:30:23 -0500
Message-ID: <CAKcXiSr+_2Ap_WBrsW2T-kP6Dp6xFvEQoBd-LzCtc4YUkO-XUg@mail.gmail.com>
To: Web Payments CG <public-webpayments@w3.org>
RE: "an open, neutral, cross-ledger interoperability protocol that the
world can standardize on"

Why not situate that as an IETF RfC?

Joseph Potvin


On Thu, Feb 18, 2016 at 5:26 AM, Melvin Carvalho <melvincarvalho@gmail.com>
wrote:

>
>
> On 18 February 2016 at 08:16, Adrian Hope-Bailie <adrian@hopebailie.com>
> wrote:
>
>>
>>
>> On 17 February 2016 at 21:00, Melvin Carvalho <melvincarvalho@gmail.com>
>> wrote:
>>
>>>
>>>
>>> On 17 February 2016 at 10:54, Adrian Hope-Bailie <adrian@hopebailie.com>
>>> wrote:
>>>
>>>> Much has changed since August 2014. This is some context from me in my
>>>> personal capacity.
>>>>
>>>> I now work for Ripple for starters, so I have a far better informed
>>>> opinion on the motivations for "self-mining" (funding the development of
>>>> enterprise grade distributed payments software by 80+ world-class engineers
>>>> for starters) and our relationship with our former co-founder and this
>>>> settlement than I did in August 2014. Let's just say that there are two
>>>> sides to every story and leave it at that.
>>>>
>>>> In the year and half since this thread began most observers would have
>>>> noticed Ripple's strategy change to be very focused on cross-border
>>>> settlement and distributed financial technology as opposed to last mile
>>>> payments and financial inclusion which appears to be the primary focus of
>>>> Stellar.
>>>>
>>>> I joined Ripple in April 2015 to focus on open payments standards as
>>>> the company had made the strategic decision that these were crucial to
>>>> fixing global payments.
>>>>
>>>> Many misunderstood this to mean Ripple wants to "make the Ripple
>>>> protocol a global standard" whereas the company had long since acknowledged
>>>> the scalability challenges with trying to standardize on a single ledger
>>>> (this was the beginnings of the research that lead to the development of
>>>> the Interledger Protocol).
>>>>
>>>> Many people are coming to that same conclusion now[1] and my hope is
>>>> that it drives them to support the development of ILP rather than stick
>>>> with their "one ledger to rule them all" mentality but unfortunately the
>>>> fact that ILP was invented by Ripple sometimes counts against it among
>>>> specific communities.
>>>>
>>>
>>> Regarding the linked article "Technical Roadblock may shatter bitcoin's
>>> dreams", are you implying that that bitcoin is the "one ledger to rule them
>>> all" or that something else e.g. ripple, is?  I'll not that this may also
>>> be considered inflammatory by the "haters" that you mention (of which im
>>> not one) :)
>>>
>>
>> Not at all. My point was that no single distributed ledger will ever
>> handle all of the world's transactions. i.e. The world should not be
>> standardizing on a single ledger but rather on a protocol for
>> interoperability between ledgers.
>>
>
> Got it.
>
>
>>
>>
>>>
>>> I pointed out about 2-3 years ago on IRC that ripple's ledger would
>>> struggle cope with the volume that was out there in terms of orders,
>>> trades, trust lines and transfers.  That now seems to be the consensus view.
>>>
>>
>> I'm not sure that's the consensus view. The Ripple ledger has not
>> struggled with any of the volume it has had to deal with to date. However,
>> Ripple have pursued a strategy of using the Ripple ledger for a very
>> specific purpose (rather than trying to put all of the worlds orders,
>> trades, trust lines and transfers onto it).
>>
>
> Yes, well transactions are one thing, and orders and markets are a whole
> other realm especially in the world of high frequency trading.  You'll
> likely run into a scalability wall if you are on a growth path, so this
> makes sense.
>
>
>>
>> To deal with the scalability issue that ALL distributed ledgers face
>> Ripple has proposed an open, neutral, cross-ledger interoperability
>> protocol that the world can standardize on.
>>
>
> Yes, love the concept, I think it's on the right lines.
>
>
>>
>>
>>>
>>> However, bitcoin itself does not suffer from the same problem, because
>>> it does one thing well, which is payments in a zero trust environment (ie
>>> no built in markets or trading).  Bitcoin is an incredibly sound ledger
>>> protected by a reconstructible transaction history and the largest
>>> distributed computing project on the planet.
>>>
>>
>> Again, I don't think that's the consensus view. Bitcoin does have scale
>> issues which was exactly the finding of the article I linked to. BUT, that
>> is not to say Bitcoin isn't well suited to dealing with some specific use
>> cases. As you put it, it does one thing well.
>>
>
> The nice thing about bitcoin is that it hasnt really changed very much.
> The best thing the devs did was to keep the technology the same.  Having
> run a fantasy football forum in the past, the first 'commandment' was 'thou
> shalt not tinker' -- meaning that most people have an insatiable urge to
> change thing, to improve them, when actually often the original concept was
> sound.  Bitcoin is quite sound and robust, there was a (imho nefarious)
> denial of service attack launched on it, by some that were possibly
> interested in its failure, but it withstood that attack.  Bitcoin is doing
> just fine.  It has an inbuilt mechanism to scale, namely the fee
> structure.  As the transactions become more congested (they are not yet at
> capacity) the market for fees kicks in, which are paid in bitcoin.  Bitcoin
> you might say is the currency used to make your payment faster.
>
> Eventually as the block reward keeps halving every 2 years it has to go
> this way anyway.  There's some that want to increase the capacity and some
> that want it to stay the same.  Its contentious because it's a marginal
> decision, and the decision making process becomes highly scrutinized.
> Satoshi predicted exactly this.  IMHO all very healthy.  Bitcoin can become
> the reserve currency of the internet and that's a huge thing that it didnt
> have before ie settlement in money that is widely accepted by merchants.
>
>
>>
>> There are now a huge variety of architectures and approaches to
>> distributed ledger systems (Bitcoin and Ripple are just two of them) but
>> that doesn't mean they are all in competition.
>>
>
> I've spoken to prominent members of the bitcoin community.  IMHO most dont
> like ripple, tho I wasnt in that camp, I was an early adopter, contributed
> some code and wrote one of the first explorers.
>
> The general feeling was that the ripple ledger was not as sound as bitcoin
> (that's probably true) and that it was competition at a time when bitcoin
> wanted to consolidate (probably also true).  I think the best point someone
> made was that most 'alt' coins didnt offer legitimate innovation but were
> mainly used for speculation, that's about right.  I do feel ripple offered
> innovation, though.
>
> My biggest issue with ripple was technical, and as an explorer author my
> question which no one could answer was whether the ledger was sound, ie
> whether it could be reconstructed from the transactions.  Im unsure it can,
> in which case the balances are somewhat arbitrary.  I'd like to understand
> that better.  This is also something I believe Jed raised.
>
>
>>
>> If we can accept that different use cases demand different
>> characteristics from their payment system and that different architectures
>> offer different combinations of those desired characteristics then we
>> should also accept that the world will eventually have a great number of
>> different distributed (and centralized) ledger systems all operating in
>> parallel and used for different things.
>>
>
> Agree.
>
>
>>
>> The Interledger Protocol proposes a way that this world can still be
>> highly interoperable and transactions can span multiple ledgers.
>>
>
> I like the concept here.  Im unsure if ILP is the, to use your phrase,
> "one protocol to rule them all", but im watching the evolution.  I intend
> to implement a number of inter ledger systems, of which ILP is on my list.
> I can then compare what works best.
>
>
>>
>> Anyone that considers standardization work to improve interoperability
>> (like ILP) competitive to their distributed ledger work is clearly taking a
>> position that their ledger will "rule them all". That was the point of many
>> of the comments made in the second article.
>>
>
> Got it.  So I think bitcoin is unique in that it is a robust ledger that
> can act as a central bank for the internet, offer settlement, be
> reconstructed from its transactions, be widely accepted by merchants in a
> zero trust environment.  None of its other competitors are anywhere close
> in comparison, and nothing is remotely on the radar that will challenge it
> at this time.
>
> Communication between ledgers is a great new topic.  But well are we not
> perhaps falling into the "one protocol to rule them all" trap, unless that
> protocol is quite low level, e.g. HTTP.  It's interesting, I look forward
> to the evolution.
>
>
>>
>>
>>
>>>
>>>>
>>>> As one of my colleagues once said: "Haters gonna hate." As an employee
>>>> I can confirm that one of the most prized values at Ripple is being
>>>> constructive (as opposed to intentionally disruptive). There are a lot of
>>>> people that believe working with, rather than against, the banks pits
>>>> Ripple as a direct competitor to Bitcoin and other similar technologies but
>>>> that's certainly not how Ripple views the world.
>>>>
>>>> As has already been pointed[2] out elements of the Bitcoin community
>>>> may have their own reasons for not supporting an open inter-operability
>>>> standard but I don't want to be drawn on that. The good news is that often
>>>> a good explanation if ILP will turn even the most ardent anti-Ripple minds
>>>> to the fact that ILP is a very good idea and deserves their support.
>>>>
>>>> The development of ILP and the promotion of it as a global, neutral,
>>>> open standard was Ripple's acknowledgement that our ledger will have a
>>>> specific use case but that the world will ultimately be filled with ledgers
>>>> (open, closed, distributed, centralized, etc) that all fulfill a specific
>>>> purpose and that what is required is a way for these to inter-operate.
>>>>
>>>> In an ideal world there would be representatives from all of the major
>>>> ledger vendors (both commercial and FLOSS, including Stellar) in the ILP CG
>>>> making sure that the protocol evolves in a manner that will ensure their
>>>> ledger is able to easily implement the necessary functions such as escrow
>>>> and crypto-conditions.
>>>>
>>>> The good news is that we have over 100 attendees already registered for
>>>> the ILP workshop next week (40+ in person) from a huge variety of
>>>> organizations including large silicon valley tech companies, global
>>>> payments companies, banks, blockchain/crypto start-ups, central banks,
>>>> universities and more. Ripple engineers are already assisting other
>>>> organizations to develop their own implementations of ILP so that the
>>>> protocol becomes a true standard and not just a specification published by
>>>> a standards body with a single implementer. ILP is gaining traction and we
>>>> (the ILP community) have an opportunity to be part of something truly
>>>> game-changing.
>>>>
>>>> I sometimes compare ILP and Ripple to SPDY and Google. SPDY/3 was
>>>> adopted as the first draft of HTTP2 with minor changes but not without some
>>>> push-back purely based on the fact that it was developed by Google
>>>> initially who had benefited from having control over a browser and a
>>>> significant server population.
>>>>
>>>> I think what many struggle to reconcile is why a commercial,
>>>> venture-backed entity like Ripple would be promoting something that could
>>>> ultimately be used by its competition. I mean, if ILP is an open standard
>>>> what's stopping other people implementing it and competing with Ripple's
>>>> commercial products? You could ask the same of the browser vendors at the
>>>> W3C. They are all co-operating on the development of open standards because
>>>> they believe they can win customers on their ability to execute. A rising
>>>> tide raises all ships.
>>>>
>>>> Personally, I have been a long time believer in open standards as an
>>>> enabler of better inter-operability in payments. That's why I started
>>>> OpenPayee and subsequently joined the Web Payments CG many years ago.
>>>>
>>>> It was sheer luck that I crossed paths with Ripple last April just when
>>>> they were looking for someone to advocate for open payments standards and
>>>> they have employed me to do this ever since.
>>>>
>>>> [1]
>>>> https://www.technologyreview.com/s/600781/technical-roadblock-might-shatter-bitcoin-dreams/
>>>> [2]
>>>> http://www.coindesk.com/bitcoin-bad-reputation-payments-standards-w3c/
>>>>
>>>> On 16 February 2016 at 21:28, Melvin Carvalho <melvincarvalho@gmail.com
>>>> > wrote:
>>>>
>>>>>
>>>>>
>>>>> On 1 August 2014 at 16:19, Adrian Hope-Bailie <adrian@hopebailie.com>
>>>>> wrote:
>>>>>
>>>>>> My theory is that Ripple have realised that they will not get wide
>>>>>> spread support given that their intermediary currency is mostly held by
>>>>>> themselves.
>>>>>> i.e. They invented a network that will make them rich if everyone
>>>>>> starts to use it.
>>>>>>
>>>>>> My hope is that the change of heart is because those involved in
>>>>>> Stellar genuinely want to use the technology for good.
>>>>>>
>>>>>> By the way they don't hide the fact that they have history with
>>>>>> Ripple (see Jed McCaleb's entry on the team page) or their indirect support
>>>>>> of Ripple (see the Bitcoin Program under their mandate).
>>>>>>
>>>>>
>>>>> For those that have been following this work, there has been a new
>>>>> development together with an announcement on Jed's blog
>>>>>
>>>>> http://jedmccaleb.com/blog/my-settlement-victory-with-ripple/
>>>>>
>>>>>
>>>>>>
>>>>>> The Bitcoin program is very interesting reading. (
>>>>>> https://www.stellar.org/about/mandate/#Bitcoin_program)
>>>>>> As I understand it they are encouraging people to buy Bitcoin over
>>>>>> the next 6 months and donate their XRP to charities for the best return on
>>>>>> whatever XRP they had on 24 May.
>>>>>>
>>>>>>
>>>>>>
>>>>>>
>>>>>> On 31 July 2014 21:51, Manu Sporny <msporny@digitalbazaar.com> wrote:
>>>>>>
>>>>>>> On 07/31/2014 03:11 PM, John Packel wrote:
>>>>>>> > Not a fork but a new project/company (non-profit, apparently).
>>>>>>> McCaleb
>>>>>>> > was a founder of Ripple's precursor and then left after a dispute
>>>>>>> with
>>>>>>> > the other founders. Several press stories about it last year.
>>>>>>>
>>>>>>> If it's not a fork, then why are all the main contributors to Ripple
>>>>>>> the
>>>>>>> main contributors to Stellar? Look at the frequency and magnitude of
>>>>>>> commits by author between stellard and rippled:
>>>>>>>
>>>>>>> https://github.com/stellar/stellard/graphs/contributors
>>>>>>> https://github.com/ripple/rippled/graphs/contributors
>>>>>>>
>>>>>>> I get that the code base is now managed by a non-profit and that the
>>>>>>> disbursement model is different than Ripple, but other than that, it
>>>>>>> looks like it's basically the Ripple protocol (even most of the
>>>>>>> codebase
>>>>>>> is shared).
>>>>>>>
>>>>>>> >From where I sit, and this is just conjecture again, it looks like
>>>>>>> Jed
>>>>>>> (or this new organization) is trying to resolve the long-standing
>>>>>>> "private entities own a significant amount of the pre-mined currency"
>>>>>>> criticism.
>>>>>>>
>>>>>>> -- manu
>>>>>>>
>>>>>>> --
>>>>>>> Manu Sporny (skype: msporny, twitter: manusporny, G+: +Manu Sporny)
>>>>>>> Founder/CEO - Digital Bazaar, Inc.
>>>>>>> blog: High-Stakes Credentials and Web Login
>>>>>>> http://manu.sporny.org/2014/identity-credentials/
>>>>>>>
>>>>>>>
>>>>>>
>>>>>
>>>>
>>>
>>
>
Received on Thursday, 18 February 2016 11:31:15 UTC

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