Post
Topic
Board Service Discussion
Re: Why Ripple™ is against everything Bitcoin
by
misterbigg
on 16/05/2013, 18:45:53 UTC
XRPs are just stamps/tokens to throttle spammers

I believe it is clear that XRP is a currency. Specifically, one that is native to Ripple and a fundamental part of the design. This idea that they are "mere stamps" is a total fiction. Once Ripple is open sourced, XRP will be money the same way that Bitcoin is money. Although one obvious difference is the manner in which they are distributed.

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you expect the current supply of XRPs to last everyone on Planet Earth for their lifetime of transactions

Since the protocol allows the transaction fee and reserve schedule to change, even a dwindling supply of XRP will always be able to support any amount of transaction volume.

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why would you expect XRP's to appreciate in value at all?

XRP should appreciate for the same reason that any finite resource appreciates - because of increasing demand. Transaction fees and reserve requirements are only one component of the demand equation, and a less important one at that for the reason that the fees and reserves can be adjusted in real time to more closely reflect validator's actual costs of computational resources instead of being affected by speculators.

A much larger component for XRP demand comes from its utility in acting as a "reserve" currency for creating liquidity in order books. As new gateways come online, the combinatorial explosion of IOU pairs makes it impractical for liquidity providers to operate in all books. Instead, it is expected that these providers will instead provide conversions to and from XRP for selected IOUs. Ripple's pathfinding algorithm will then use these XRP "bridges" to allow exchanges between any IOUs.

This use-case is explained in the wiki:

Scaling Cross Currency Arbitrage

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What's the revenue (not asset) model for OpenCoin to make money?

It's already been stated by a principal from OpenCoin: "We hold XRPs and hope they go up in value."