Quote from: ~Coinseeker~ on April 18, 2014, 07:11:53 PM

Quote from: kgo on April 18, 2014, 07:09:31 PM

Quote from: twiifm on April 18, 2014, 07:01:37 PM

That's exactly what he's talking and why Ripple is intriguing. Currently to send money across distances you need a clearing house. You are correct that Hawala does this without a clearing house & Ripple is a digital version of Hawala.

The reason why you want this is because people use different local currencies. If my Chinese supplier only accept RMB as payment and if I want to use BTC how can the transfer take place? Either there is a clearing house that takes my BTC and gives him RMB or something like Ripple.

But why use an IOU/promise-to-pay (XRP) when I can use an asset/commodity (BTC)?

XRP is not an IOU. It's a deflationary, math-based currency, just like Bitcoin. It prevents ledger spam and acts as a bridge between two currencies. Say BTC -> XRP -> YEN. And you don't have to necessarily use it, if there's a cheaper path.

An IOU is just a balance that you have with a 3rd party. If you go to your Bitstamp or Cryptsy account, it will display how much BTC, USD, etc you have with them, right? That's your balance and that balance is an IOU. They "owe" you, X amount. It's just an IOU that is trapped in a central entity. (Well, of course Bitstamp is the largest Ripple gateway, so you can have access to your Bitstamp IOU's within Ripple.)

So again, with Ripple, instead of your IOU's being trapped and controlled by a central entity, you can move them freely into other things of value or even pay someone with them. Which just means, you're transferring that balance, to someone else. In Ripple, an IOU is not a means by which you can buy something now, and pay later. It's a representation of actual assets you own. When you exchange those IOU's, the asset balance is transferred to the new owner. The IOU simply determines who now owns that balance.

Wow. So, not only is ripple rubbish, but it actually may be counterproductive to bitcoin adoption in that it acts as a bandaid to the fiat system.