Quote from: bithic on January 29, 2014, 12:43:38 AM

Quote from: jl777 on January 29, 2014, 12:33:22 AM

Quote from: bithic on January 28, 2014, 11:54:07 PM

Quote from: jl777 on January 28, 2014, 11:39:03 PM

Quote from: bithic on January 28, 2014, 11:25:44 PM

Quote from: Anon136 on January 28, 2014, 11:23:27 PM

Maybe there are many nodes but their solution to the byzantine generals problem is the same one that has been used for thousands of years, central authority. If the ripple foundation was ever compromised than ripple would not be able to continue without them. That is precisely the problem that bitcoin solved and ripple unsolved.

Please expand?

I'm not a Ripple expert, but I believe the keyword is "distributed". Big difference. If they could claim decentralized, they would. My understanding is that all transactions on the Ripple network depend on trust relationships between gateways, which act as the authority.

Here's an article I found helpful when trying to understand Ripple:
http://blog.coinsetter.com/2013/04/29/virtual-currency-trading-wars-bitcoin-versus-ripple-xrp/

Gateways deal with all the govt regulations and the issuing of IOUs into the ripple network. Once in the ripple network, all the trades, etc. are done via consensus of distributed rippled servers. The gateways are not directly involved in ripple network transactions other than redemptions.

Not sure of the number of non-RL servers, but my guess is around 100 total rippled servers are running.

James

Ah, so the trust relationship is between the ripple servers. Got it. So, if the server operators (Ripple Foundation, governments, banks?) ever collude to come to a consensus that supports a dishonest transaction, there would be no way to prove otherwise, because the transaction confirmation depends on their consensus rather than a decentralized processing of the blockchain?

So the difference between Ripple and all truly decentralized cryptocurrencies is that all Ripple users have to trust the people who control the servers (i.e. the Ripple Foundation). A true crypto like Bitcoin or Nxt is entirely trustless in operation.

I think there should be an article on this in the Nxt wiki, because once our decentralized exchange comes out, a lot of people will be asking what the benefit over Ripple is.

No, you have it not quite right.

The trust relationships are purely between gateways and the customers. This is the way Ripple avoids darkNXT equivalent. Not only does an account have to be funded with a minimal amount of XRP (currently 20 XRP min), in order to accept a specific IOU, the user has to specifically set a trust line for that specific issue from that specific issuer with a specific maximum.

It is a real pain in the ass, but it pretty much eliminates any chance of ending up sending something to the wrong address.

So, once you get your acct funded and establish a trust line (just filling out a form from your wallet), then you can receive the IOU. You make a fiat deposit to your gateway, then the fiat is exchanged for the IOU.

Similar to NXT's Asset Exchange at the high level, with some very big differences.

a) In ripple anybody can issue any asset, I think three characters is the limit for Asset name. So in essence each asset gets variants, eg. BTC.bitstamp, NXT.peercover, etc

b) Ripple requires minimal XRP balance to do anything, including establishing a trust line or making a trade offer, so really 30 XRP is the practical minimum.

c) Ripple requires a trust line to be established before anybody can receive that issue. However, you can directly purchase it from the orderbook without any trustline

d) There is this thing called "rippling", which allows the ripple network to automatically convert IOU from one issuer to another issuer of the same asset, if you have it enabled. Pretty nasty if your USD.bitstamp gets rippled into USD.snapswap! USD.snapswap trades at 10% discount to USD.bitstamp. There is even an evil bot in ripple land that searches for hapless newbies that allow rippling between USD.bitstamp and USD.snapswap and automatically converts it. The bot makes an immediate gain of 5% to 10%

So, if anybody is afraid about ripple competing with NXT, rest assured, it can't. Ripple is designed for mass market consumers to exchange their local currency to another currency, across the world.

As far as the servers go, unless some entity gets control of 51% of servers, I doubt any funny business is possible. Everything is in a public ledger. Ripple is basically firstgen as far as immunity from 51% attack goes, eg. not immune at all. Very unlikely ripple would attack its own network as they need it to expand so they can continue to add the 48 billion XRP stockpile into the network.

Nothing is perfect and ripple is no exception. It does have a lot of corporate backing and it does have some utility, so it won't go away. I just don't see it growing by leaps and bounds. That being said, XRP value could easily double or triple or lose 50%, as it is not very liquid at all. Total daily volume of XRP trades are less than $250,000/day for all issues in ripple.

This is why I keep saying Ripple's function is to be a gateway of fiat <-> crypto, including NXT.

James

Thanks for the explanation James! Any thoughts on writing something on this for the wiki? You could use what you just wrote as the base.

I don't mind if anybody just takes what I write. There are bounties for writing for wiki, but since I was strongly advocating for marketing budget, I don't feel right working for bounties from that. Of course, if nobody writes articles that are needed, I would write whatever I can help with no bounty needed. I want more people to earn bounties as it will get more people involved.

I am hoping for my share of white paper bounty though.

James