Quote from: r.willis on April 16, 2013, 05:07:04 PM

https://bitcointalk.org/index.php?topic=148278.0

Quote

Vinnie: ...What's the OpenCoin business model?
Jed: ...we hold xrp and hopefully they gain value

(...)

Here's the thing: XRP will only have real value if Ripple is successful. As in, enough people need XRPs that they'll be willing to buy XRP, or that their gateways buy XRPs for them behind the scenes. OpenCoin can't just sit on their XRP, they have to work at it.

It's just like pre-paid phone minutes from TMobile won't be worth anything unless TMobile actually provides a working service, at a service level that is competitive.

Quote from: misterbigg on April 15, 2013, 10:36:07 PM

Of course, you guys objected to that because of the "wasted electricity" but unlike Bitcoin, Ripple's XRP production via proof of work would eventually end, with total power consumption dropping to zero (no more mining). After the source is released, anyone can make this change. The total power requirements for using proof of work to distribute XRPs using a stochastic process would be finite.

The point of XRP would be to reward the developers of Ripple, and the guys who run peers that actually perform transactions. The sort of "proof of work" you mention would just reward those who wastes the most electricity, and not those who actually make transactions happen.

Why don't we instead discuss what incentive people would have to run their own Ripple nodes? Perhaps those who buy Ripples from Opencoin and from people who got free Ripple handouts would be the people who have an economical incentive to run their own Ripple nodes? By contributing to the success of Ripple, their hoard of cheap XRP becomes worth more, and they can sell those XRPs to cover the cost of running Ripple nodes. This sounds good at first, but it wouldn't provide an incentive for latecomers to run their own Ripple nodes?