Quote from: zachcope on March 11, 2014, 06:59:38 PM

Quote from: ~Coinseeker~ on March 11, 2014, 05:05:18 PM

The simplest way to understand the benefits of Ripple to Bitcoin, is to just look at Gox. If Gox had been plugged into Ripple, users would had flexibility over their Gox IOU's. While an exchange closing is never going to have positive results, those IOU's could have still been moved into other currencies, like Bitstamp.BTC or XRP and then moved into any other currency where liquidity exists. This is much like what Bitcoinbuilder did, except you don't need a central clearing house to move your IOU's. Instead, Gox users have taken a total lost because they prefer centralized exchanges over distributed exchanges. Why? IDK...maybe a few more need to fail before people finally get it.

So you prefer contagion, bail outs and collusion when a large gateway/exchange goes down?
The incentives in Ripple push bail outs, debt and encourage other holders of Gox IOUs to turn a blind eye to Gox's trouble's, giving them more credit lest a default leads to loss of Gox IOU values throughout the system. This is what many critics of Ripple have said for years.

Bitcoin related businesses can never be too big to fail.
Ripple businesses can be too big to fail.

This is a strawman.

Had MtGox been a Ripple gateway, it would still have failed all the same, except that until it did, its debt would have remained liquid and cryptographically provable. Liquidity of debt allows risk avert holders to sell the troubled asset at a discount to interested parties having different withdrawal options, willing to bet on a recovery or planning to take the legal route to recover the funds. Cryptographic provability of the balance guarantees that the exchange cannot cook his books and claim that he owes less than he really does.