Exchanges hold the REAL ASSETS, of their clients. Let their clients trade them. Then later distribute them back to their clients. Only one entity must be trusted in this case; the Exchange.
Where as on Ripple there are at a minimum of two Gateways that must be trusted, and that's at a minimum, to get the real underlying asset cleared and home. And that's in the best case situation. If one extends any trust elsewhere on the Ripple Network then suddenly one can be held fully liable for any of those trusted and their failure to own up to those IOU's.
Nope, this is plainly wrong - there are gateways (like Bitstamp) that issue several currencies e.g. USD and BTC. Also you are NOT going to be out of money if some other gateway you don't have anything to do with fails. You probably misunderstood how Ripple works, if you trust a gateway that has no trust lines to ripple to other gateways (and why should they?!) this is a closed ecosystem to trade. The advantage of Ripple is that you are free to open it for you, e.g. you can easily trade for other balances and you are not locked in to the one you first used.
Gateways also hold the REAL ASSETS of their clients, that's all they do - they let them use these assets (to be traded or transacted) on Ripple instead of forcing them to use their own (mostly) closed source opaque trading engine, that's the only difference to a Bitcoin exchange and that does not have to do anything with how the assets are represented.
Ripple can be maybe more easily understood as a competitor to BitPay: You trust a gateway (e.g. BitPaygateway) in a single currency (e.g. USD) and set up a way to deposit/withdraw this (e.g. you tell them your bank account). If someone wants to pay you, you will receive USD by BitPaygateway, not the BTC (or EUR or LTC or...) the person used to pay you. To pay you, in BitPay the payer has to trust BitPay with her BTC ("Pay 0.01 BTC to this addresss to send x USD to $Merchant: 1asdfg...") and also accept their market rates. In Ripple she only needs to own a balance that can somehow be traded for BitPaygateway USD and can optionally set trading offers herself if she doesn't like the current market situaion and thinks someone might rather take her offer. To make this trade you don't need to trust BitPaygateway for USD by the way...
Anyways, as I said, Ripple is not that easy to understand and there is a lot of misinformation around. Your understanding is simply wrong (or only partially correct, to put it in kinder words). If you want to talk about facts, the ones you stated above are simply not true. You do not have to trust any gateway to trade on Ripple. You do not have to trsut more than one gateway to deposit/withdraw anything on Ripple. You cannot be defrauded for more than you trusted a fraudilent entity (in Bitcoin terms: Even though pirateat40 had probably a debt of several million BTC but only a few 10k in "real" BTC, this did not affect the amount of BTC people had displayed at MtGox at that time) and Bitcoin exchanges do trade, transfer (in some cases), issue and redeem IOUs. Ripple gateways only issue and redeem them, they are traded and transferred on Ripple.
Sukrim, Wait just a minute: I must trust BOTH Bitstamp and SnapSwap, for instance, to clear a trade from BTC to USD. So that equals 2, not merely one exchange. Thus doubling my risk, from my objective point of view.
I have no dog in this game.
I have no agenda.
It doesn't matter to myself if Ripple succeeds or fails.
But it would aid everyone if we could really lay out what the risk are, and compare.
This is before I start trusting others, such as friends, family, associates, business contacts, or anyone else for certain amounts of "trust".
This isn't anything compared to merely trusting one entity. Such as any of the exchanges that offer fiat to crypto exchange services. And visa versa.
I am not confused. Your using deflection and more to twist things around.
Fact is: I must trust in two gateways. Not just one. And that's at a minimum. Before I dare to trust anyone for say 1 btc, who could then default on their IOU and then myself see my own btc taken from my gateway where I transfer it to later on, and then SURPRISE, because I trusted a friend, or whoever, for 1 btc, and they defaulted the rippling wave comes back to haunt me instead. Because I trusted another person.
I can't believe this tread has marched down such a deceitful path.
I leave you all now. But I was extremely compelled to lay out the facts as best I know and can determine them so that others don't get involved without understanding the finer points, and the level of risks involved.
Yes, it may work out fine. But so far I only trust in Bitstamp, and not a fiat exit agent (what Ripple terms is a Gateway). So far I don't trust any other Gateway besides Bitstamp. And until other Gateways earn that trust over time, and without many complaints from users I wont tread into these waters. I would like to do so. But the risks are not the same, their in fact higher. Every time we add another risk on top of an existing one we are then that much more at risk, of losses.
It's sad to see that there is no agreements in this tread except for two opposite, and diabolically opposing statements.
But the proof is in the very framework of Ripple, versus the traditional Broker/Exchange service.
Ripple wants to act as a railway, but without enough trusted gateways. It's as simple as that. And why it's not yet succeeding at capturing major interest and involvement. Except of course from mainstream sock puppets and shills, plus some others of course.
It's very interesting. But I still pass. 1+1 = 2, but please, I know, you will claim that's not true either.
Give up. Your not even laying out why I am mistaken, but instead doing anything but that.
Example:
Sukrim stated: "...Nope, this is plainly wrong - there are gateways (like Bitstamp) that issue several currencies e.g. USD and BTC. Also you are NOT going to be out of money if some other gateway you don't have anything to do with fails..."
What does that even mean??? So why even bother with 'rippling my btc's to Bitstamp if I already have a Bitstamp account? In other words: if I want to sell some btc but don't want to have the long wait for a bank wire, and the costs of that, then I must instead use another gateway such as Snapswap, to exit to usd. And that means trusting two gateways, not merely one. So it's you that are wrong here. Maybe you didn't understand, but then it doesn't seem that you desire to do that. But instead sling mud at anything and anyone that has objections or criticizes things concerning Ripple. Maybe it would be best to sell some ripple so you could be more objective yourself. Or if your in Ripple's employ then maybe slow down and try to understand what and why others are stating what they are, and then go from there.
Lastly: the "...Also you are NOT going to be out of money if some other gateway you don't have anything to do with fails..."
IF I understand correctly, and IF I had trusted them for whatever amounts, and then they IOU that amount elsewhere, and then don't pay that amount. Well at some point later, I may have to pay it for them, if they abuse that trust amount I extended to them. But if that isn't true, well it would be news to most that have spent a great deal of time trying to understand what many of us are now fed up to the max with.
On top of that we now are subject to abusive behavior from two here in this tread, including suddenly yourself. The point is that Ripple just lost my interest, completely. I may not be the brightest bulb, far from it in fact. But it's difficult to cheat or con an honest person who does their due diligence.
Where as your not even warning anyone anywhere of the risks due to these finer points about the IOU trust model wrapped around Ripple's Network, and instead downplaying them, and here, in a fraudulent way by stating it's the same as anywhere else, when in fact the risks are higher. Not to mention telling me I am all wrong when in fact you and your pal were just rooted out as what is in the eye's of the beholder...
I am done with the thread now, and this entire topic. Maybe Ripple 2.0 will work for myself, but not the current system and my current two gateways that are required for fast to and from fiat to crypto.