Quote from: smooth on April 19, 2014, 01:01:52 AM

Quote from: twiifm on April 19, 2014, 12:53:28 AM

I would say most people don't understand how banking works in general.

True, though they understand it well enough to use it, which is most certainly not true for ripple.

This is again, because the Ripple protocol is not a consumer facing product. It's like saying when you walking in the bank, there's just a computer sitting there with all the access to facilitate payments, on their proprietary software. How many customers would know how to do it? How many would even bother to try?

Ripple will really start making sense for people as more products and services are built, integrating Ripple as their backend. Many times, you may never know you're using a Ripple powered product. Just as you have no idea what goes on behind the scenes at PayPal or the ACH and Swift systems, or yes, even SEPA. Once you start having merchant tools for easy website integration, different payment networks integrating, the benefits will become crystal clear. But development takes time and Ripple Labs is not in the business of developing the entire infrastructure around Ripple.

As for bank integration, RL's has made great strides, although as was said, these active discussions can't be made public and for obvious reasons. But you can see the fruit of their labor in instances like this from David Andolfatto, Vice President at the St. Louis Fed.

Quote

This is why I am relatively bullish on the Ripple protocol. So, in short, we have the Fed doing what it does, we have the banks doing what they do (financing investments), we have Ripple-like services taking over a big part of the payments business from banks, and we have Bitcoin-like cryptocurrencies financing a relatively small fraction of transactions. Something like that, though I will have to think about it much more carefully. https://ripple.com/blog/5-questions-for-st-louis-fed-economist-david-andolfatto/

Lastly, there are still people in this thread who just don't under IOU's as it relates to Ripple. There's a disconnect here between:

1. IOU's as a means of credit. Meaning, you can buy now and pay later. (False)
2. IOU's as a representation of an actual asset balance. (true)

The latter is what you can utilize in Ripple. If you can't differentiate between the two, Ripple will never make sense to you. Furthermore, the counter-party risk is not in the IOU. The counter-party risk, is in the 3rd party who holds your assets. The IOU is just a liquid representation of that balance. Like when you go to the casino, your cash is exchanged for poker chips. The poker chip is an IOU backed by your cash. You can turn it in at anytime and get your cash or you can give it away or lose it to another player and they now have ownership over that cash, because they hold the chip. (IOU)

Same thing, you're just exchanging balances at 3rd parties. What's really going to be cool and when the power of Ripple is really going to become apparent, is when the federation of payment networks takes flight. Assume Paypal, Bank of America, HSBC, Bitsamp, and BTC-e were all gateways. Since you're able to exchange balances, your going to be able to do all kinds of things.

From your BoA account, you could directly pay any merchant that accepts Paypal. Direct balance exchange via IOU's, without central clearing in the middle.
Or, you could send direct from your Paypal account to BTC-e, without wiring money or having to buy BTC, pay the fee, then transfer the coins, wait an hour. You know the deal. Grin

You just exchange your Paypal balance for a BTC-e balance a viola, you have USD or BTC or NMC on BTC-e. And someone who had a balance on BTC-e, now has USD in Paypal. Confirmed and irreversible in seconds.

The possibilities are limitless. Now, we can move our balances around, like we do email. We can send email to any @email address, thanks to SMTP. Thanks to Ripple, we'll do the same with value because right now, a Paypal user can only send to a Paypal user. A bank of america user can only send to a BoA user, etc. It's like pre-SMTP email. When you really sit back and think about it, it's totally mind blowing that we're still stuck in these closed systems.