Putting that aside however and thinking realistically, I don't see banks going anywhere in the short - medium term. As a speculator/investor, I'd like to play both sides so that I win either way or hopefully BOTH at the same time.
Ripple is the tech that banks need to remain somewhat relevant going forward in today's globalized economy.
There is something very strange going on with Ripple.
Its features are entirely incompatible with sound banking. So it can't be for banking. Whereas LN on Litecoin will be compatible with sound private fractional reserves in alignment with Nash's ideal money concept (with the failure mode being long-term when Bitcoin becomes controlled by one whale due to concentrating effect of fungible finance).
I wonder if Ripple is a bet on corrupt fiat system finding a way to force all public funds and banks into a system which self-destructs? Some people seem to think Ripple is more compatible with governments and laws?
I really can't find any logic in it at all except that speculators will buy anything that the other dumb speculators will associate progress even though it isn't.
I'd be very wary of holding Ripple as it appears to me to be an extremely volatile greater fool speculation (raping) tool. Ripple is having its 2nd hump adoption (similar chart pattern to LTC).
And I think that is the utility of Ripple. It is way to separate more fools from their capital. So get on board and join the musical chairs raping party. Just pray you get out in time.
I have thrown the question out on XRPChat
https://www.xrpchat.com/topic/3551-ripples-fatal-defects-would-like-to-hear-an-expert-rebuttal-please/Ripple Consensus Ledger (RCL) is not difficult to understand.
- RCL is about trustlines and IOUs
- Every account on RCL can issue an IOU. E.g. I can issue USD.roborovskii or EUR.roborovskii or XAU.roborovskii, basically anything except XRP which is the reserved native token.
- Another person may also issue IOUs, but theirs would be seen as USD.anotherperson, EUR.anotherperson, CNY.anotherperson, etc.
- Note that on RCL you may not see USD.anotherperson, but the actual account address (USD.rxxxxxxxxxxxxxxxxxxxxx)
- Nobody needs to trust anyone blindly. This is where trustlines come in. Trustlines are simply how much you are willing to trust another party holding an IOU for you.
- E.g. You deposit 1000 USD into bitstamp through the usual banking transaction. You NEED to set a trustline to bitstamp on RCL for at least 1000 USD, or bitstamp will not be able to credit 1000 USD.bitstamp to your RCL account.
- Once you do that, bitstamp can then send 1000 USD.bitstamp to you.
- It is a common problem that new users forget (or do not know how) to set the trustlines. They deposit the money, and wonder why they have not yet received it on RCL.
- The main misunderstanding (or ignorance) in that written piece of garbage, is that you could receive anyone's IOU (e.g. USD.scammer). This is not possible if you do not have a trustline setup to trust 'scammer'.
- E.g. If you had the 1000 USD.bitstamp deposited earlier, and you want to pay your friend through RCL 10 USD, you will NOT be able to send him the 10 USD.bitstamp if he does not have a trustline setup to bitstamp.
- Maybe he only has a trustline setup to gatehub. In this case he can ONLY receive USD.gatehub
So this problem of sending your friend USD who has a different trusted gateway; is where the magic of rippling occurs:
- On RCL there are market makers, there would be a currency (or IOU) pair that trades between USD.bitstamp and USD.gatehub.
- Ideally this would be 1:1 being the same currency, but not always. For the following example, let's say it's an ideal 1:1
- When you send your friend 10 USD.bitstamp on RCL, he would receive 10 USD.gatehub through the rippling process that the market makers help to bridge.
- If you had a friend in Japan who only trusted JPY.MrRipple, sending him 10 USD.gatehub would bring out an option for him to receive 1115 JPY.MrRipple.
- This again is bridged by market-makers trading the pair USD.gatehub : JPY.MrRipple
To sum it up, you cannot receive an IOU that you do not have a trustline setup to. What the sender CAN see are the available routes and IOUs that you can receive (that you have existing trustlines with).
The written piece is by someone who is ignorant of how RCL works, and criticizes through his boneheadedness. This is a common trait of "bitcoiners" you see on Polo and elsewhere.
I am following the lead of banks who are testing and backing Ripple. Perhaps it will blow up on them, but that remains to be seen.
That idiot who replied to you didn't understand what MP wrote.
MP is stating that when I deposit $1000 in a bank and get IOU back (which I can trade a la the gold certificates of private banking in the 1800s), then I expect to be paid an interest rate and I expect that bank to make a statement as how many IOUs they will issue relative to reserves they have in the vault. Ripple does neither.
And MP also states correctly that Ripple places all those who receive IOUs from the same entity on equal footing, which the idiot who replied to you didn't seem to grasp. The reason this is bad, is because then I can't sue that issuer without a class action lawsuit. And large players can't negotiate for seniority in a default liquidation scenario.
In other words, Ripple has none of the features required for private banking to function correctly.
I would be happy if you posted my rebuttals there.
Perhaps banks think they will like Ripple because they can use it just as settlement layer and have their own side agreements on the aspects which Ripple doesn't enforce:
Fundamentally, Ripple has a much better chance of getting regulated and being brought to a major market, like NYSE or BATS, than bitcoin because it is more centralized. There is also a lot of banks around the world that are looking at ripple as a form of real-time gross settlement. To banks, a system like Ripple has a lot of advantages over bitcoin . Banks really aren't interested in "alternative money" like Bitcoin and other cryptocurrencies , they're interested in the underlying distributed ledger technology, and that is exactly what Ripple is. They WANT more control over the system, they don't want to give up control to miners who are securing the network based on the price of the currency, they like distributed ledgers because they can actually give banks more control over their back-end systems, bitcoin will probably never be used for this, and as such, Bitcoin and Ripple should be seen as completely different technologies. Some people like to say Ripple has no value because it is centralized, or because the fundamentals are so different from Bitcoin , but that is simply not the case. It is just valuable for different reasons and big Banks definitely see the value in Ripple, while they've been pretty cold towards Bitcoin . This sets the stage for Ripple to have a pretty massive long-term bull-run now that all the weak hands are out of the market and new money is flowing into cryptocurrency .
See also:
https://www.quora.com/Does-Ripple-have-a-chance-of-disrupting-the-banking-industryhttp://bitcoin.stackexchange.com/questions/40530/why-banks-are-trying-consensus-algorithms-like-ripplehttp://www.cnbc.com/2016/06/22/banks-trial-ripple-blockchain-to-make-international-money-transfers-like-sending-an-imessage.htmlhttps://ripple.com/insights/how-banks-use-ripple/The problem for Ripple is what is the fungible unit of transfer? So banks are going to transfer XRP? Then how can they do fractional reserve banking because Ripple doesn't allow transferring XRP minted by a private bank, unlike Lightning Networks which is in theory could if users blindly trust the centralized hubs.
Ripple would only be useful for trades between banks on their mutual trust of their own USD.chase, EU.sandanter, etc..
I expect Ripple to collapse as the sovereign debt crisis goes into defaults probably next year.
So some soon to be non-existent banks like Ripple. Who cares.