Post
Topic
Board Altcoin Discussion
Re: Ripple or Bitcoin
by
JoelKatz
on 27/05/2013, 21:32:50 UTC
Yes. So it requires a gateway to honor the IOUs of another gateway, thank you. Got it.
Yes. This is one case where it might make sense for a gateway to extend trust to another gateway. And people evaluating the reliability of such a gateway should take into account the additional risk they're incurring. The gateway has to choose between keeping the profits in this path for itself while taking the risk or allowing market makers to take the risk, but also the profit. We don't know if anyone will actually adopt this business model. Personally, I think very small gateways may adopt this business model (because it's their only choice) and larger gateways may adopt it temporarily, until market makers come around.