Let me try again:
XRP is not an IOU
.with Ripple, instead of your IOU's being trapped and controlled by a central entity, you can move them freely
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.
Sounds like it involves IOUs to me.
and that's a good thing. XRP, however, is not an IOU. It's an asset that exist within the network and stored without counter-party risk.
Exactly. Ripple does involve IOUs which means there is counter-party risk. If I hold a Ripple IOU for $100,000, then that $100,000 is at risk.
The statement that "xrp has no counter-party risk" is disingenuous. No one really cares about xrp, they care about losing the value stored in the IOUs (which you admit do have counter-party risk).
If digital hawala networks prove useful, we could have iRipple, youRipple, heRipples and sheRipples. Xrps on any particular xrp ledger seem to me to be essentially valueless. The point of these kinds of networks is a means of exchanging IOUs between trusted parties.