Re: Worried about Mt Gox? What does this price fall mean for BTC and its clones?
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.
No, you do not have to trust both to trade, in fact you don't need to trust any of them if you only want to trade. Also you can choose to use a different issuer for BTC or USD (e.g. DividendRippler or SnapSwap for BTC or Bitstamp for USD and BTC if you just want to pay 0.2% on Bitstamp trades).Please outline what exactly you want to do - if you want to deposit BTC and withdraw USD, you once need to trust the gateway you deposit BTC at until you got the BTC on Ripple, then you need to make a trade for USD you think you can withdraw (no trust in Ripple needed for that and outside Ripple only due diligence needed and likely some AML documentation) and then you somehow need to withdraw the USD you got - however that gateway you chose handles this. It can be the same you used for BTC or something else.
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Fact is: I must trust in two gateways.
No. I can buy for example LTC.DividendRippler for XRP right now without ever trusting anyone on Ripple for LTC. I can then withdraw these LTC to any LTC address that I enter in DividendRippler and will have them credited on the LTC block chain within the hour. All without ever trusting anyone.Quote
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.
On one hand it's your own fault if you trust unreliable individuals (like the stunt TradeFortress pulled off), however nowadays trust lines are set to "NoRipple" by default, so this won't work any more.Quote
But the proof is in the very framework of Ripple, versus the traditional Broker/Exchange service
"Traditional exchange": Deposit money, get IOU, sell IOU on internal market, get different IOU on internal market, withdraw different IOU, receive other money/asset in hand/wallet.Ripple gateway: Deposit money, get IOU on Ripple, sell IOU on global open Ripple market, get different IOU there (potentially from a different gateway), withdraw different IOU (potentially to the different gateway), receive other money/asset in hand/wallet.
The only difference is that you can choose the issuers of your IOUs, they do not HAVE to be the same as on "traditional" exchanges so you have more freedom of choice there. If you want to reduce risk by e.g. only using Bitstamp IOUs like you would do if you would trade on Bitstamp internal anyways you can do that. In your example (trading BTCUSD) you can for example trust Bitstamp for BTC and USD (they issue both) and trade, or if you like SnapSwap they also issue BTC and USD, so you can use them for both sides as well. If you would like to use the XAU gateway in Singapore however because you are a gold bug and want to spend your BTC from Bitstamp there, you can do that too.
Just because you CAN choose, does not mean you HAVE TO choose.
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What does that even mean??? So why even bother with 'rippling my btc's to Bitstamp if I already have a Bitstamp account?
If you are happy to trade on Bitstamp feel free to do so by all means! Again, Ripple is closer to BitPay than Bitcoin, so if you would like to be pay stuff in BTC and be paid in BTC, Ripple will enable this. Once a gateway enables for example PayPal incoming and outgoing payments, you can pay any PayPal merchant using your BTC on Bitstamp. So far you can pay any BTC address. Not that interesting for Bitcoin bulls, if you however would like to keep USD on your account but buy something on bitcoinstore.com, you can do that.Quote
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.
I got my XRP for free in giveaways, so why should I sell them to be able to be more objective? Also I'm not employed by RippleLabs, if that's what you're hinting at and as I already wrote, I'm far more invested in BTC than XRP anyways (and again: I do not recommend or endorse anyone to buy XRP beyond a single USD).Quote
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.
You seem to confuse Ripple with the older "community credit" version from villages.cc or Ryan Fugger's initial ideas. The current implementation would allow for something like that if you jump through a few hoops. It would be easily detectable though and likely illegal to do that for the gateway in western jurisdictions. Definitely not worth it to pull that off after getting a MSP license... Also anyone you deposit BTC at could make a run - why do you act as if gateways would be suddenly trying to steal from you left and right who have to stay far more honest (as they can be audited via a public ledger) than any random Bitocin service out there? I can tell you down to the Satoshi how many BTC DividendRippler has to have. Do you know the total balance of all accounts at MtGox? Should you know that before doing business with them?Quote
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...
Please tell me again that the "assets deposited" at whatever exchange reflink you were pushing are not the same thing as assets deposited at any Ripple gateway... 
If that exchange were running on Ripple it would work completely the same, just with a cryptographically verifiable open order book that can't be manipulated at will by the exchange owner.