Quote from: markm on February 22, 2013, 02:30:12 PM

So there probably should come a time when Ripple starts getting what we want done done in surprising ways whose details might involve obscure links between people none of whose direct trust line partners we even know or even know of.

s/Ripple/Facebook and you'll see that what you wrote is rampant digital utopianism. Those links (read: inferences) draw a picture of your financial profile in unprecedented detail. I'm sorry I don't share your glib outlook, but I'm simply not going to accept the potential welcome surprises of a few single digit percentage in transaction fees going "poof" in exchange for all my financial data INCLUDING personal credit-extension relationships-- which currently does NOT exist in digital form of any kind-- being available to a federation of third parties. It's hard enough trying to keep track of what the big three credit-rating companies know about me, and who they share it with, as well as banks and cc's. But that doesn't mean everybody should just willingly provide that and much more data to what will amount to the entire world.

Neither you nor I have any idea of the kinds of inferences that can be made with this data, or even with seemingly innocuous metadata (esp. when aggregated). At least with Bitcoin methods exist to mitigate problems one might run into with say, inferences between a BTC address and a forum posting-- you can't erase those associations, but you can easily start over. What does the Ripple userbase do when they read a study that details the negative consequences of showing everything to everyone, all the time, for little in return? Like Facebook, they'll be locked in to the relationships they've created within the network-- there's no way everyone in your trust network can just generate a new address or something. (And federation doesn't alleviate this problem-- see Diaspora.) Users would be trapped, just like they are in the current banking system, except that they've given even more power over to the new system in the form of comprehensive financial and social data. I think it's safe to say now that such data becomes the real currency of any network that claims to protect personal data by policy instead of by design.

Recently a friend of mine got a hacked email account where the idiot hacker claimed to be that person on a trip to Europe and needed thousands of euros. What happens when an account hack is paired with inferences from the financial trust network, and the hacker asks for a credit extension based on the data about how that contact has granted credit within the network as a whole? 1000s or Euros suddenly becomes a number that is a lot more reasonable to the recipient. There are probably much more nefarious uses to which the aggregate data can be put-- the fact that I even have to struggle to think them up is a good example of how nefarious the bigger problem of digital utopianism is.