Post
Topic
Board Altcoin Discussion
Re: Why has Ripple decreased so much in Market cap? Used to be second to Bitcoin
by
twiifm
on 18/04/2014, 23:01:21 UTC
Whether we are talking about MtGox, Ripple, TradeFortress, Bitstamp, Coinbase or bitcoins in cold storage, this is how I see things:

1.  If I am the sole controller of the private key to 25 BTC, then there is no counter-party risk.

2.  If I am not the sole controller of the private key for "my" 25 BTC, then what I essentially "own" is some sort of IOU and there must be counter-party risk.  I believe it is wise to ensure that I can measure what that risk actually is should I choose to use the third-party service.  

Correct me if I'm wrong but that Ripple IOU exists only to do the exchange.  So why is there counter party risk?

 
In the IOU.

Quote
Once the exchange is finished there is no risk.  

If you no longer hold the IOU and instead are the sole controller of the private key to 25 BTC there is no longer any counter-party risk.


Right..  But that risk only lasts for the duration of the exchange.  No?