Quote from: smoothie on March 26, 2013, 06:08:30 AM

It isnt about how much 1 person trusts a ton of people. It is the inter-trusting of different parties that are all linked together. Just because I trust B and B trusts C doesn't mean I trust C. And in fact if I know that B could be trusting known scammers or people I don't trust, the entire thing collapses because at some point B isn't going to want to trust A, D, F, G, H, J, K, ....Z.

I think you still don't understand how trust works in Ripple. For one thing, most people will wind up trusting just gateways, and gateways don't need to trust anyone to function.

Say there's a gateway that's a regulated financial institution, and you and I each trust that institution. First, all we're trusting is that their IOUs will retain value. We don't need to trust them to do anything. We don't have to be their customers. Now, you and I can pay each other by exchanging this gateway's IOUs. None of us need to do any business with the gateway, the gateway doesn't need to do anything (except maintain the value of its IOUs by performing redemptions for other people), and the gateway doesn't need to trust anyone.

And say you trust gateway A and I trust gateway B. Gateways A and B don't trust anyone. We can still pay each other so long as there's someone who holds IOUs from one gateway and accepts IOUs from the other gateway. All we've had to do is trust one institution that doesn't trust anyone else, and we don't have to do business with that institution or rely on them to do anything specific for us. All we're trusting is that they will continue to do business and thus their IOUs will hold value. And we only need do that for as long as it takes us to move money.

Similarly, the person in the middle who makes the exchange possible just finds that his gateway A IOUs turn into gateway B IOUs, two conditions he prefers equally anyway. Nobody has had to trust him at all because the IOU exchange is atomic and instantaneous.

And, of course, we all agree that if you trust B and B trusts C, you don't trust C. But that's fine, you don't have to. The system can act just as if you do even though C's default can never harm you.